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In this episode of the IC-DISC Show, I sit down with Brian Schwam to discuss how Interest Charge Domestic International Sales Corporations (IC-DISCs) can help businesses save on taxes. With over 35 years of experience, Brian shares how IC-DISC has evolved since 1972 and why it remains a valuable tool for U.S. exporters. He explains how businesses, particularly in the aerospace industry's Maintenance, Repair, and Overhaul (MRO) sector, can take advantage of this incentive to improve their financial position. We walk through a hypothetical example to illustrate how an exporting business could benefit from IC-DISC. Brian explains how companies involved in manufacturing, repairing, or trading parts can qualify and why many eligible businesses overlook this opportunity. We also discuss the annual MRO conference in Atlanta, where industry professionals gather to share insights and best practices. This event highlights the ongoing impact of IC-DISC within the aerospace sector and beyond. Despite the clear benefits, many businesses hesitate to implement IC-DISC due to a lack of awareness or expertise. Brian talks about how our firm partners with CPA firms to integrate IC-DISCs into existing tax processes, making it easier for businesses to take advantage of these savings. He also highlights the underutilization of IC-DISC and why more companies should consider it as part of their tax strategy. We wrap up by discussing the upcoming MRO America's Conference in Atlanta, where exporting aviation maintenance companies can connect and learn more about IC-DISC applications. Whether you're new to IC-DISC or looking to refine your approach, this conversation provides useful insights for businesses considering this tax-saving opportunity.     SHOW HIGHLIGHTS In this episode, I discuss the intricacies and benefits of Interest Charge Domestic International Sales Corporations (IC-DISC) with tax attorney Brian Schwam, who has over 35 years of experience in the field. We explore the historical context of IC-DISC, including its origins in 1972 and the significant changes it underwent following international scrutiny and U.S. tax reforms, such as the 2003 Bush tax cuts and the 2017 Tax Cuts and Jobs Act. Brian provides insights into how IC-DISC can serve as a valuable tax incentive for U.S. exporters, particularly those in the aerospace industry's Maintenance, Repair, and Overhaul (MRO) sector. Through a detailed hypothetical example, we illustrate how companies can leverage IC-DISC to maximize export profits, highlighting specific benefits for pass-through entities and closely held C corporations. We address common apprehensions businesses face regarding IC-DISC implementation and discuss how collaboration with CPA firms can facilitate a seamless integration into existing tax processes. Despite the clear benefits, IC-DISC remains underutilized, and we emphasize the potential missed opportunities for businesses not taking advantage of this tax-saving strategy. The episode also covers upcoming industry events, such as the annual MRO conference in Atlanta and the ICDISC Alliance Conference, which offer valuable networking and professional growth opportunities.   Contact Details LinkedIn - Brian Schwam (https://www.linkedin.com/in/brian-schwam-b6026a3/) LINKSShow Notes Be a Guest About IC-DISC Alliance About WTP Advisors GUEST Brian SchwamAbout Brian TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hey, brian, welcome to the podcast. Brian: Thanks, dave, good to be here. Dave: So where on planet Earth are you calling in from today? It's hard to tell by looking at your background. Brian: Outer space. I am in the sunny South Florida. Dave: Okay. Brian: Breezy, south Florida, okay. Dave: Now are you a native of Florida. Brian: I am not a native of Florida. I spent 50 years of my life in the upper Midwest in Wisconsin. Okay, I had to move to Sunbelt. Dave: Okay, Now were you educated in the Midwest then too. Brian: I was. I'm a proud alum of the University of Wisconsin, both for an undergraduate degree in accounting and also my JD from the law school Okay. Dave: So you've and I take it and I've known you a while, so I think that's been several decades ago that your career was started. Is that about right? Brian: Several would be a good good approximation. Yes, I've been at this for 38 years. I know it doesn't look like it, right, okay? Dave: And so, and how long have you been involved in ICDISC? Then Most of that time 38 years, oh, 38 years in ICDISC. Then most of that time, 38 years, oh, 38 years in the disc, wow, yeah. So how does that do you know? Do you have any way to quantify that? Like how many you know ICDISC returns you've, you know, signed or reviewed or prepared, or Boy, it's a big number, dave. Brian: It's probably five figures. Okay, probably, so you know, somewhere north of 10,000 for sure. Okay, over that time period. Dave: Well, and that is why I'm glad that you are one of the founding members of the IC Disc Alliance with me that when I had a chance to partner up with you and some of your team when we created the IC Disc Alliance, I was really excited because in my book I pretty much knew all the players in the IC Disc space and once the famous Neil Block retired after 50 years to me you were without peer in the IC Disc space. Brian: So I really enjoyed collaborating with you through the years here in the ICDISC space, so I really enjoyed collaborating with you through the years. Dave: Thank, you for that, Dave. I hope to be able to follow Neil into that 50-year stratosphere. Yeah, that's big shoes to follow. So let's just talk a bit about the ICDISC. What the heck is it? Why does everyone use that silly acronym? Brian: Because what it really stands for is a mouthful. Dave: Okay. Brian: Discharged Domestic International Sales Corporation and that is what the ICDISC stands for, short right ICDISC. And I don't know if we'll get into. I'll get into what the IC stands for and everything. But basically this is an export incentive that's been in the Internal Revenue Code since 1972. Okay, in various forms. Initially it was an export incentive that just about any company could use, that was exporting goods that were manufactured, produced, grown or extracted in the US. It came under some fire from our trading partners and in 1984, it was transformed into the ICDISC. It started out just as the DISC in 1972 for the Boston International Sales Corporation and it, like I said, came under scrutiny. Our trading partners said hey, you're a, you can't have an exemption from income because you're not. You know you tax things differently in your country. This flies in the face of the other incentives you give your taxpayers. So they changed it into the ICDIS, which made it into, instead of a permanent tax savings, at least on its face, into a temporary savings where, to the extent a taxpayer saved tax and deferred income from tax, they were required to pay an interest charge to the IRS on that deferred tax. Hence the IC. Dave: Okay, okay. Brian: That rate changes every year. It's based on the one-year average TBLO rate as of September 30th annually. And at the same time they instituted something called the Foreign Sales Corporation, which was widely used by thousands of companies, and that came under attack and eventually became the extraterritorial income exclusion which was immediately attacked and eventually, a couple of years later, it just went away. In the meantime, the disk floundered for quite a number of years. In fact, in the year 2000 there were only 787 disks in existence. Dave: Wow, it seems like a shockingly small number. Brian: Well, the tax laws weren't real conducive to benefiting from the disk at that time. Then, in 2003, the Bush tax cuts brought in the concept of qualified dividend income and it took the disk off of life support and really put it on robust territory for pass-through entities, because they could now, to the extent that they could qualify and we'll get into that, to the extent they could qualify and to the extent that they could benefit it provided a 20% rate benefit between ordinary income and qualified dividend income, so it was a significant savings. Now that's been whittled away over time, where it's been reduced here and there. Various tax law changes and probably the largest or the next biggest reduction came in in 2017 with the Trump tax bill, the Tax Cuts and Jobs Act, which reduced the rate on qualified income on non-qualified income. So it reduced the rate on S-corp income partnership income in an individual's tax return to a 29.6% level, and so now the spread between the qualified dividend rate and the ordinary rate just isn't as great as it used to be. It's approaching 6%. So where it used to be 20, then it went to 15, and now it's 6. But it's still a permanent savings for these past three entities and it's not something that they should ignore, because it can save significant taxes, depending upon the level of export activity. Dave: Okay, and now to be clear, depending on a company-specific fact pattern, that spread could be greater. Right For a pass-through. It could be as high as what like? Brian: 13% or so For a pass-through it could be as high as what like, 13% or so For a pass-through business. Dave: It could be as high as 13.2%, okay, but in general we see that it and it could even be somewhere between that, depending on. Brian: Anywhere in between 5.8 and 13.2. Dave: And our experience has been that most companies tend to gravitate more toward the lower end of the savings than the higher end. Brian: Yes. Dave: Yes, okay. Now what about for a C-Corp? Brian: C-Corp is a different animal. Okay, a C-Corp can't use an disc to pay deductible dividends to its owners if it's a closely held C corp. This is not something that a public company can benefit from. But if a closely held business C corp is paying dividends to its shareholders and would like to be able to deduct those payments, rather than not being able to deduct those payments, using an ICDIS can transform the dividend into a deductible dividend. Now, it doesn't save the shareholders any tax, because they're paying tax on the dividend regardless of where it comes from, but it would eliminate the corporate level tax on the C corporation, so that benefit could be as high as 21%. Dave: Okay. Brian: Okay, another manner in which certain C corporations use the disc is to fund bonuses for shareholders and key employees, and then that saves the shareholders 17% tax the difference between a tax on a wage and a tax on a dividend, qualified dividend. So that's a 17% savings for the shareholder. In that case the C-Corp doesn't save any tax. They're getting a deduction either way wages or commission to the disk. And now that I've mentioned the word commission, that's probably a good segue into how does a disk earn income? Yeah, and what is its income? So most discs are what we call commission discs. They earn a commission when a operating business that's related to that disc makes an export sale of qualified export property. So let's dig down into that first. What's qualified export property? Well, that's property that has been manufactured, produced, grown or extracted in the US. So if I'm manufacturing in Mexico or Canada or China and I'm simply selling what I've made in those other countries, you know the disc is not something that's going to benefit that type of a business. Dave: Okay. Brian: It is there to spur US manufacturing, create US jobs, right in line with the America First proposition that's headlining Washington in 2025. Dave: Okay. Brian: So it should be on safe ground, everything that's going on there. So if a company has property that's been manufactured, produced, grown or extracted in the US and they sell it for export outside the United States and not to a US possession, then that sale can potentially generate an ICDIS commission that would be paid to the ICDIS. And keep in mind this ICDISC is not an entity that the outside world sees or understands or knows about. It's simply an entity that does business, if you will, internally with the operating company, so customers don't know about it. It's really transparent to the world. It's just there to help US exporters save tax. Dave: Okay, it's just there to help US exporters save tax. Okay, and the logistics of it. Like say a company has just for simple math, let's say they have $10 million of export, of qualified export revenue, and the ICDIS commission that's calculated to say 10% of that. Brian: Okay. Dave: So 10% of that would be a million dollars, and so walk me through kind of the that's correct and it accrues the deduction, assuming it's not a cash basis taxpayer. Brian: It accrues that deduction at the end of the year, the DISC accrues the income at the end of the year and then by statute the DISC does not pay income tax. So now we've gotten a deduction on one side, we have non-taxable income on the other side and then when the disc pays a dividend to its owners, that becomes a qualified dividend and is taxed at a lower rate. Dave: Okay, so then, effectively, that million dollars gets reclassified from being taxed at ordinary dividend rates to qualified dividend rates. Brian: From ordinary income rates to qualified dividend rates. Dave: yes, Yep, thank you for that. And where that shows up for a pass-through is going to be on the individual shareholders, k-1, right. That box up near the top that shows ordinary taxable income would basically go down. Let's say there was one shareholder, that number goes down by a million dollars. And then there's a box further down on the K-1 for qualified dividend income and that's where the number's being shifted to right. Brian: Right. Assuming the disc is owned by the operating company, which most of the time it is in the pass-through business context, then the ordinary income gets reduced on the K-1 and the dividend income will increase on the K-1, not necessarily in the same year, but that will be the result over time. Dave: And then that tax savings then will show up on the individual shareholders. 1040, right, because their ordinary income line is a million dollars less. The qualified dividend income line is a million dollars more, and that's where that arbitrage. Brian: They pay less tax if they're getting a distribution from the company to cover their taxes, which is often the case, the company doesn't have to distribute as much cash, therefore increasing the working capital of the business. Dave: Okay, well, thank you. Thank you for that. Now, what I want to drill down into a little more today is looking at the aerospace industry, specifically what's called the MRO space in aerospace. Do you know what MRO stands for? Brian: I believe, I do, I believe maintenance, repair and overhaul. Dave: That's my understanding as well. Brian: That's a significant area in the aviation space. Dave: yes, Okay, and I believe that there's a big conference in Atlanta in April with like something like 17,000 expected attendees. Brian: Yeah, just a small gathering. Dave: A small gathering. Brian: For sure. Yes, that's my understanding as well. In fact, I'll be there. Dave: Yeah, I believe we'll both be there, yeah we'll both be there A few of our colleagues. Brian: Yeah, so it's a one a year significant gathering of companies that operate in this MRO space, supporting airlines and other aviation companies, and basically MRO is important because it keeps planes able to fly. Yeah, and we actually have a booth there. Dave: Yeah, and we actually have a booth there. 1818 BC and it makes it sound like it's a date from a long time ago. But yeah, we'll be there and this will be our first year in attendance or exhibiting. And this has come from, in recent years, I'd say, a big ramp up in the number of MRO companies who we are helping with their IC disk. Is that right? Brian: Yeah, absolutely. In fact, one of the sponsors of the conference was a company I was doing some work with and I asked them if he thought it would be a good idea for us to attend, and it was a resounding absolutely that he thought that we could meet a lot of companies that could benefit from this ICDISC similar to his company. Dave: Okay. What are the elements in the MRO space or the characteristics of the companies that make them a good fit for the ICDISC, because my understanding is it's probably only one out of a hundred of like all the registered corporations in the US are really a fit for the disc. Brian: Yeah, so it takes a specific fact pattern to really benefit. So the companies in the service side of the business so let's say they're carpet cleaners or something to that nature they're not going to be able to benefit from the disk. But let's say it's a repair center and airlines will ship in parts to the repair center because they've worn out and they need it. They need a replacement part so that they can fly this plane. So what happens is maybe the repair center takes their part and repairs it, but they previously repaired another part that's identical and then to the customer and that plane gets back in the air right away. So in that scenario, even though it's a different part that's going back out versus what was coming in, that type of activity qualifies as long as what they're doing qualifies as manufacturing and that repair is occurring in the US. Dave: Okay. Brian: Then that type of a company could definitely benefit Other companies. I don't want to use this term, but it's kind of like horse trading. Sometimes companies will buy a surplus of parts, knowing that eventually they're going to be used by somebody and they hang on to these parts, or they find them from somebody who says I don't want these parts anymore, I haven't been able to sell them. So they take a flyer, they take a risk and they buy these parts and they hang on to them and maybe they sell them at a significant profit and maybe they don't. But there's that space as well that can benefit from the disc, and there's some misconception out there that some of the companies that are similar to what I just described can't benefit from a disc, and so, for example, if parts are obtained outside the US, they stay outside the US. They stay outside the US and they're repaired, recertified and resold. Those aren't going to qualify for the ICBITS. But sometimes parts are acquired outside the US and they're brought into the US, they're repaired, put it back into inventory in the US and then sold for export, and that activity does qualify for the ICs, and so it's very important to know where this refurbishment or remanufacturing is taking place. Dave: Okay and yeah, and there's a US content piece to it, right, like if they buy a part from China and all they do is they just put a little lubricant on it and throw it in a box. Brian: that may not qualify and then they export it. The test is what's the customer's value when that part comes into the US. So if it's a burned out hot engine part, for example, yeah there's no value or very little value and it comes into the US, its customers value is close to zero. It gets repaired, it's going to easily meet the content test and it's easily going to be considered manufactured in the US. It's rare, I think, that we'll find that somebody will buy a new part from outside the US just to inventory it here for export. Dave: Okay, yeah, because there's that it's a 50% US content test, right which? Is also, I think confusing on the surface if you don't really dive down into the rules, right, I mean, the layperson may find it. Brian: How do you know what's 50% US content? Well, the cost of good, I mean. Think of it the other way. The foreign content can't be more than 50%. And the foreign content is the cost, the customs value when it was imported. So if I'm selling something for $100, I imported it for as much as $49.99. That's going to qualify as long as I did something, you know, remanufactured it once it got to the US and once it got to the plus, more often than not, I think the value of those things coming in because they're used and worn and damaged parts, they're going to have a low customs valuation where there'll be no problem meeting that content. Dave: Okay, I can see that. Well, I find and my listeners tell me they really like kind of case studies, little mini of case studies, little mini, you know, client case studies On an anonymous basis. Do you have an example or two of some of the types of companies we've worked with, just to give people a flavor of them and, again, you know, being anonymous to you know? What company it is, but just a sense of like the sense of the size of the company, what the benefit might have been. Brian: The size is sort of across the board, right. So some of them are someone on the smaller side. They might have export sales between $5 and $10 million, and then some of them might have export sales of $100 million. It all depends on the size of their business and the benefits are kind of all over the map. Because we don't just do a simple calculation of the benefits. And the reason we don't is because in this industry what we find is there's a lot of margin variability in the companies that are exporting, and then a transaction-by-transaction analysis of the disk commission is what makes the most sense. That allows us to benefit from the margin variability, allows them to benefit from a higher disk commission and obviously then they're going to save more tax. And in some cases the commission grows by 10x by using the T by T. Sometimes it's two or three x, sometimes it's. You know, I've seen you know where it would have been zero because there was an overall loss in the company, but we were able to get a significant discommission with a T by T approach. So it's hard to pinpoint an exact number, but generally speaking it's 15 to 20, you know the commission ends up being 15 to 20% of sales. And if you look at the statutes, one of the statutes says oh, the commission can be 4% of sales, and another implies that it could be anywhere from 4% to 10%, but we generally see in this industry at least 15% on average. It's significantly higher. Dave: Yeah, and I'd like to drill down into that because I tell, and based on my understanding, we may manage more IC disks than any other organization of the country. I mean we I think our number is somewhere north of 500 companies now that we're helping out, and when I'm having these conversations, you know. So I'm, as you know, I'm more focused on the sales side. You know, and you and your team are more focused kind of on the technical aspect of producing these returns, and what I tell people is that our real value isn't being able to produce an IC disk return. Our value is the incremental benefit that the transaction by transaction calculation yields. That the transaction by transaction calculation yields. Because you know just about any any cpa firm you know most of them their software includes the ic disk return. You know, if they just go do a four percent calculation, it's a, you know, reasonably straightforward calculation. But we find that you know they're capturing only a fraction of the total benefit. Brian: That's true, and while I've seen a good number of interesting looking disc returns, I tend to agree that if you follow the directions, anybody can probably prepare a disc return. We do that as well. That's not where we add the most value. Where we add the most value, adding the value comes in unlocking the highest commission possible so that the tax savings are as great as possible. Yeah, and a lot of businesses that are high margin I'm sorry, low margin high volume businesses. When you look at the disc, on its face it looks like oh, there's not much benefit here, we're only making 2% or 3% of sales on our bottom line. So our disc commission would be 2% or 3% of sales. But, like I said, with the transactional approach, if the commission approach is 15%, well now we've taken the company into a tax loss which could potentially save additional taxes for the owners over and above that 5.8%, because now we're offsetting that loss against other income wages, interest, et cetera and being taxed just on the qualified dividend income of the disc. And so you can't just look at the overall margin or overall profitability of the company and project what that, what it's going to look like, Because they vary all over the place. Dave: Based on this transactional approach, yeah, and I would like to talk a bit about. Oftentimes, when I'm talking to a company that's considering a disk, oftentimes they've never even heard of it. Their CPA firm may not have even mentioned the idea. And they'll say, and they'll ask me hey, does this mean my CPA, you know, screwed up by not telling me about it. In my response, you know I try to be generous and I explain it that, look, you know, in our experience only about one out of 100 companies are a candidate. And so let's just say you have a large local CPA firm and they have 100, you know midsize corporate clients. Statistically we find that only one of them, you know, would be a fit for the disk. And your experience may be a little different, you know, feel free to correct me. And so when you think about it from the CPA's perspective, if there's a special part of the tax code and they only have one client that benefits, it's a difficult economic dynamic for the CPA firm to invest in a whole team and expertise to serve one client, right? Isn't that like part of the challenge that the and I know you've worked at a number of large CPA firms Is my understanding correct? That's part of the problem is just their clientele. There aren't enough of them. That makes it worth doing yeah. Brian: Yeah, I think that's a fair characterization. I might phrase it a little bit differently. I mean, there are thousands of CPA firms and they're all excellent generalists. This is not an area where you can be a generalist. Cpa firms often outsource R&D, tax credit work, cost segregation work. This, to me, falls right in that same category. You don't want to dabble in this, and if you're not sure what you're doing, you can get you and your client in trouble. Have good intentions, but if you don't execute it properly, it can be more of a headache than it's worth. And so, like most people, I think people gravitate towards what they know and understand, and things that they don't know and understand can look and sound scary. Dave: Yeah. Brian: So it's like, oh my God, an IC disc. I've never heard of that. I'm not sure I can bring that to my client because I don't really know what I'm doing. Well, I wish I knew somebody I could call to him. He's not a competitor right who could help me through this and help my client through this, and so that's really one of the reasons why we exist, because, as you stated, you don't want it to be a competitor that you call, and so, because we are so hyper focused on what we do and we don't do the things that I'll call the cpa's generalists, that the generalists do, we're an excellent partner because we're not looking to take away anybody's tax return or any of the other type of work that the CPA might be doing for that client. We just want to play in our space. Dave: Yeah, sometimes I'm sorry. Sometimes you know clients or potential clients will say, yeah, but you know our CPA firm does. You know all of our work. It's a one-stop shop thing and I'm afraid having you do the disc return and then doing the corporate return yeah, but our CPA firm does all of our work, it's a one-stop shop thing and I'm afraid having you do the disc return and then doing the corporate return it's just going to be a nightmare for you all to coordinate your efforts. It just sounds like too much trouble. What would your response be to that? Brian: My response is I work with over 500 companies. Generally we do the disk work for those companies. The regular mainstream CPA does everything else. We coordinate our work with that CPA and it's never a problem. We say, look, we're going to need X number of days to turn this around, so please have a draft of the operating company return by a particular date, and then they work towards that date. They give us the return, we get data from the company and we turn the number around so they can finish their tax return and then we go ahead and finish the disc return and I would say 99.9% of the time it works like we're all part of the same thing. Dave: Yeah, because really the CPA they prepare that final draft corporate return. They then pull two numbers from the disk return that goes into the corporate return and then they're done, basically right. Brian: And they're done and they can go ahead and finish up their disk return, I mean their operating company return and their state returns and everything. And then we just have to get the disc return done. And sometimes you know they file their tax return in april and you know the disc returns aren't due till september. So one might say, oh, you could just sit on them until september. But you know, we try to get them done at the same time. Sure sure Everybody can rest easy. But I mean we think of ourselves as a bolt-on resource to that CPA firm while we're working with that and we work with probably 50 to 75 CPA firms around the country in that role- yeah. It works well. I mean, you can talk to any one of them about what it's like to work with us, and I'm sure you'd get a glowing recommendation for how we work with them and for their clients. Dave: Yeah, no, I'm with you. So, as we're nearing the end here, the other thing that people find interesting you'd mentioned in 2003, there were 700 IC disks under 1,000. Yeah, 787. And then, according, if my recollection is correct, the most recent IRS stats that updated that were published, I think, in 2010. And I believe in 2010, there were like 2000 disks. Brian: Yeah, something like 1926. Okay, To be exact, and that number I'm sure has grown dramatically since then. I would guess there's somewhere between eight and 10,000 disks out there now. Okay, yeah. Dave: Yeah, now what's interesting? This is what people find interesting. I believe there's about 50 million business organization, you know business entities in the country, and so let's just assume that's the number, 50 million. Brian: I mean it's tens of millions. Dave: I'm certain of that. For some reason, I think it's 50 million. Does that sound reasonable? Brian: It does so let's think it's 50 million, does that? Dave: sound reasonable. It does. So let's say it's 50 million and on your average, you know we find around one out of a hundred. You know, maybe one out of 200 companies are fit for the disc. So if we run through the math, you know one percent of 50 million, I believe, is 500, 000. You know approximate companies that we think would benefit from a disc. Yet most recent stats, there's only 2000, you know, and maybe it's 4,000, 6,000, you know. Even, let's say it's 10,000 that exists now. So if you divide 10,000 by 500,000, what is that? Like 2%, I think, of the projected eligible company actually have a disc yeah, and people can't. They always are surprised by that and I usually tell them it might. And tell me if your numbers are consistent. I say about 100. One out of 100 benefit or could benefit. The ones who could benefit 90 percent of them have never heard of the disc, maybe 95%, and the 5% of the 1% who have heard of it, even once they hear about it, they usually haven't implemented it. Brian: Right. Then there's a percent that have implemented it. They're not getting out of it what they can. Dave: Right right. Brian: So it's so. There's a lot of missed opportunities by taxpayers and everyone's always trying to save some taxes. It helps fun, you know. It might help hire another employee might help, you know, if the savings are moderate and it's 50, 6070, 1000 of tax savings that still could pay for an employee to come work at the company. Why do? Dave: you think that utilization is so low? I mean because it'd be shocking if only 2% of the companies who did research and development took advantage of the RMD tax credit. Brian: I think it's just not well known. I mean it's very esoteric, it's been in the tax code for ages and ages and it just doesn't you. You know, there were so many years where it just wasn't relevant when you think that it's not something people think about. And then if you know, if you're a small exporter and you're exporting a half a million dollars a year a million dollars a year unfortunately it probably doesn't benefit you to have a disc and so maybe someone will look at it whether that size and they're like, oh yeah, it doesn't benefit you to have a disk and so maybe someone will look at it whether that size and they're like, oh yeah, it doesn't work. And then they grow and they forget that it might work once they've grown. So once a company hits about three million of export sales really should look at it again, because that's where it starts to have economic relevance that's where it starts to have economic relevance. Dave: Do you think some of it could be that? I mean, in general, public companies don't use disks, right? Brian: They just simply don't. Dave: Okay, and so I've found that oftentimes small to mid-sized privately held companies receive a lot of their sophisticated business knowledge from their Fortune 500 suppliers or clients. You know they'll hear from them about something and you know, like the payroll protection program during COVID, you know I suspect some of those might have heard about that from you know some of their large customers. Maybe that's not a good example, but you know that could be another reason. Right, there's just a dearth of knowledge that the CPAs aren't focused on it because the economics don't make sense. The large sophisticated public suppliers and clients don't use it, so they don't hear about it from them. Right, it's not really in the news, it's just. It just kind of flies below the radar screen, doesn't it? Brian: It definitely does, and that's certainly a reason why it's not as utilized as it probably could be. Dave: Yeah, and it seems like you know most of our, you know virtually all of our clients come as a referral from either an existing client or an advisor who we've worked with other clients you know, like a CPA or attorney or banker. So yeah, it's just a yeah, even though you know the podcast is called the Icy Disc Show. I don't get the sense that I'm ever going to. You know, reach Joe Rogan's audience size. It just seems to kind of fly below the radar screen. Brian: Yeah, and the potential audience is probably a little smaller than Joe's. Dave: Probably Well. So the last thing, the other thing people tell me they're surprised about the first year of the disk return. When they set up a disk is to get everything done. And we tell them the disk return's ready and they say, super good, and e-file it for me, like the CPA does the corporate and personal returns. And what is our response when they tell us to go e-file it for them? Brian: The response is unfortunately, the IRS doesn't provide for e-filing of disk returns and we'll need to send you a paper return. You're going to need to sign it and file it with the IRS and the unfortunate thing there is gosh, I don't know what percent of the time, but it's a growing percentage of the time the IRS loses the return Right and then sends a notice saying, hey, we never filed or whatever. And some of these disk returns are quite large. The fact that they because when you do the transaction by transaction analysis, there's a lot of paper that gets produced and filed and it's shocking to me that the IRS would lose those what they do. Dave: So it's interesting what they do. So it's interesting. I like to say that not only does the ICDISC fly under the radar screen of most everything, it even, in some ways, it's almost like it flies under the radar screen of the IRS itself. Brian: Yeah, and they put some things in place with regard to the ICDISC in 1984 and have never changed it. For example, if you're in the situation where you have to pay interest on deferred tax, which often occurs. First of all, a lot of times taxpayers don't realize it and they don't do it. Secondly, if they do it. It's so antiquated that the instructions to the form where you calculate the interest it says please staple a check to this form and mail it in. I mean, who does that in 2020, right? Nobody. People, businesses prefer to do things electronically to avoid checks being stolen, fraudulent activity, so on and so forth. But here the IRS is saying staple a check to this form and mail it to Kansas City, missouri. Dave: Yeah, and I guess it kind of makes sense that you know if there's only a few thousand of these disks in existence. In the same way, you can't expect the CPA firms to make it a heavy focus, I suppose even the IRS. You know there's a hundred other tax incentives or a thousand other tax incentives that are more highly utilized that you know they maybe are spending their time on. Brian: Yeah, as I like to say, the people at the IRS that understood the disc were working there in the 70s and 80s, OK, and they're long retired. Yeah, and they're long retired. There's really not a lot of bodies at the IRS that understand the DISC and certainly when you're doing a transaction by transaction study and calculating the commission on each individual transaction, there's nobody there that understands that. Dave: Nobody Well, and it's kind of the same thing outside the IRS, right? Nobody Well, and it's kind of the same thing outside the IRS, right? I mean I have this joke that nobody makes partner at a big four firm being the IC disk expert. Oh, that's true, so it even especially nowadays. Yeah, and so it seems like like the average age of IC disks experts is about the same as the average age of the average Fortran computer language programmer. It just seems like you know new people are not coming into the disk and there's just a dearth of knowledge all around. Brian: Right, right. And I myself learned COBOL, which is a choice between Fortran and COBOL, when I was in business school, both equally non-usable. Dave: Is it part of that? Because since the disk came on in 1972, it seems like since 1973, people have been talking about the IC disk going away. So is that maybe part of it? People think, well, why should I learn something if it's going away? Brian: Maybe part of it. People think, well, why should I learn something if it's going away? There's always been a fear that it's either going to go away or that there's a technical correction coming that the disk dividend is not a qualified dividend. But the bottom line is politically, I just don't see that happening. Dave: It stands for too many things that are positive for the US Job creation export sales for too many things that are positive for the US Job creation, export sales, us companies being more competitive in the global market. Brian: So it doesn't really lend itself to be repealed. What can be repealed are some of the tax rates. Some of the tax rates can change and that can change the benefits of the disc. The concept of the disc itself and what it stands for really is very consistent with our country. Dave: Yeah, wow, I can't believe how the time has flown by, brian. Is there anything else that you want to mention about the IC disc or the MRO industry? Brian: No, I can't think of anything specifically other than I'm looking forward to being there and meeting many of the attendees and other exhibitors that are there and spending some time with you and our colleagues in Atlanta. Dave: Yeah, it will be fun. So it's the ICDISC Alliance. If you want to look us up on the website for the conference or stop by 1818BC. We also have a LinkedIn page for the ICDISC Alliance, and so I'd love to meet with any of you who are going to be at the conference. Awesome, well, thank you very much for your time, Brian. This has been really useful. Brian: You're welcome. You're very welcome. Special Guest: Brian Schwam.

In this episode of the IC-DISC show, I speak with Tim Loney about his transition from airline industry professional to IT services entrepreneur. He shares his path from working at Continental Airlines through major mergers to establishing Solutions Information Systems, explaining how his experience with severance packages motivated his shift into entrepreneurship. We discuss the importance of business continuity planning, particularly for companies in hurricane-prone areas. Tim tells me about a Houston client whose facilities experienced severe flooding, highlighting how proper data recovery systems made a crucial difference in their ability to resume operations. Managing sensitive data is a key topic in our conversation, as Tim's company works with high-net-worth families, family office sectors, as well as companies in a variety of industries. He explains how word-of-mouth referrals have helped build trust with these clients who require careful handling of confidential information. The conversation turns to Tim's approach to business acquisition, where he focuses on purchasing IT firms from retiring owners. He describes his method of maintaining and growing these businesses post-purchase while sharing insights about how remote management tools have transformed IT services over the past 35 years.     SHOW HIGHLIGHTS I discussed Tim's career evolution from working in the airline industry with Continental Airlines and American Express to establishing his own IT services firm, Solutions Information Systems, in Houston, Texas. Tim shared insights on how his managed IT services company has established a national presence by utilizing robust remote management tools and enterprise-class processes. We explored the importance of business continuity and rapid data recovery, highlighted by a story of a Houston-based company that faced severe flooding and required effective disaster recovery solutions. Tim's firm specializes in managing sensitive data for high-income families in construction and family office sectors, emphasizing the importance of trust and credibility built through word-of-mouth referrals. We discussed Tim's strategy for acquiring small businesses from retiring owners, focusing on enhancing the value of these businesses post-acquisition to ensure continued growth. Tim reflected on his entrepreneurial journey from modest beginnings, emphasizing the significance of diversifying income sources and the evolving importance of data protection in the digital age. The episode concluded with an exploration of the evolution of office communication over the last 35 years, showcasing the technological advancements that have redefined the IT industry.   Contact Details LinkedIn- Tim Loney (https://www.linkedin.com/in/sis-tloney/) LINKSShow Notes Be a Guest About IC-DISC Alliance About Solutions Informations Systems GUEST Tim LoneyAbout Tim TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hey, good afternoon, Tim. Welcome to the podcast. Tim: Hi, Dave, good to see you. Dave: So where are you calling in from today? What part of the world are you in? Tim: I'm in Houston, Texas, just north of Houston, in the Tomball area. Dave: Okay. Tim: Up in our corporate headquarters for the company. Dave: Okay, and now are you a native Houstonian. Tim: I am not. I'm not a native Houstonian. I should be probably classified as a native Houstonian because I've been here for about 35 years or more. Dave: Okay. Tim: But my background is I migrated from Canada the day before my 21st birthday. Dave: Oh, you did. Tim: Yeah, I became a permanent resident here in the United States. And what caused you to want to do that? The economy was pretty bad in Canada at that time and I was working for a commercial airline that had gone through a severance package and they released me with my severance package and I said you know, maybe I should try another country, not just a job, but maybe another country. Dave: Okay, so when you came to Houston then did you stay in the airline? Tim: business I did. I worked for one of the large international airlines called Continental Airlines at the time, which has since been acquired by United Airlines. Dave: You know, to this day I can still tell a legacy Continental flight crew from a legacy United flight crew. Very different cultures, very different cultures, or, as I say, the Continental folks are nice and the United folks are not so nice. Tim: Correct, yeah, I was there during the heavy competition years between Continental Airlines and United. I was actually there in the process with Continental Airlines during a very large merger and acquisition of multiple carriers. We acquired Frontier, people Express and New York Air and put them all under the umbrella of Continental Airlines. So I was there during those years. Dave: Okay, so were you there in the late 90s. So were you there in the late 90s. Tim: I was there from 1985 to 1990. Dave: Okay, yeah, I was only asking because I'd worked at an executive search firm in the late 90s and we worked with Continental during their like, go forward initiative or move forward initiative. Tim: Yep the go forward plan with Gordon Blithoon. He was Yep. Dave: Yep, that was it. So then you left the airline business. What did you decide to go do then? Tim: So I left the airline business and I went to work for one of the largest credit card companies in the world called American Express. Dave: Okay, I think I've heard of them. Tim: Yep and because I had a lot of automation knowledge of how the airlines work. From an automation standpoint, American Express was interested in me and understanding the automation behind the airlines and travel agency systems and they brought me in to be a systems person for the airlines to help them in kind of standardizing a lot of procedures within American Express. Dave: Okay, well, that sounds like a fun opportunity. Tim: Yeah, very rewarding, very educational. I learned so much during my term at American Express. Dave: Okay, but you decided that at some point you wanted to unfurl your wings and see what you could do on your own. Is that right? Tim: unfurl your wings and see what you could do on your own. Is that right? Yeah, you know now that I look back at it. You know I was. I grew up in a family where you were encouraged to go work for a large organization and a big fortune 100 firm, and through your entire life, and leave with a gold Rolex watch and have a great retirement plan. Dave: Yeah. Tim: But as I followed that path, I found myself continuing to get severance packages over and in my experience with the Fortune 100s I received three or four severance packages and those packages kind of educated me on that. It was maybe not the right gig for me and, you know, I was smart enough to be able to exit out of the Fortune 100s and do something on my own, and that's when I decided to start my organization. Dave: Okay, and what's your company called? Tim: So my company is Solutions Information Systems Solutions IS to abbreviate it and we are a managed service provider of IT services across the United States, managing about 175 customers across the US oh wow. Dave: That's interesting. I would have thought you'd have your clients would all be in the Houston area. I guess this newfangled internet thing lets you serve clients remotely. Is that, I guess, how it works? Tim: Yeah, yeah, and we can talk a little bit about what makes us so successful, but the ability to manage and monitor and remediate issues remotely has come a long ways over the years that I've been in IT. Now it's pretty much if you can't do that, why are you in this industry, right? So yeah, and you know it's a lot of like the entire work from home program that the whole world has kind of moved to. We have that ability to do exactly all of that stuff, not only from our corporate headquarters, but remotely as well. If one of our employees needs to work from home, they can do remotely as well. If one of our employees needs to work from home, they can do that as well. So it requires a massive tool set, and I'll refer probably to our tool set a lot, because that's what makes us successful, right Is the tool set that I've been able to put together and build a toolbox full of tools to be able to manage, secure, maintain these infrastructures that we're responsible for. Dave: Well. Tim: I thought IT service firms were. Dave: I thought that was a commodity service. I thought they're all the same. Tim: Oh no, there's quite a bit of difference in how these managed service providers operate and I'll tell you, I would consider us probably in the top 100 nationally and probably the top three in our region of service providers, and the reason I kind of give us that grade and that's a grade that I've given us is that we've been at this for 25 years. I started this practice 25 years ago. I started this practice 25 years ago and over those 25 years I not only brought in enterprise class processes and procedures from my 10 years at American Express, but I've improved upon those processes and procedures over those 25 years. Dave: And we continue to improve on those processes. Okay. Well, what? Yeah, I'm guessing that you're. The clients tend to stay with you for a pretty long time. Is that like until they sell or go out of business or some significant event occurs? Absolutely. Tim: Yeah, and that and that's the type of client that we want to have in our portfolio, right? This is not a consumable product that you go and buy once and go away this is a partnership with our customers. Dave: It really is. Tim: You have to think about the IT infrastructure of any business out there. It's number one, a foundational piece of the business, and it is an instrumental piece in continuing to do business right. A lot of conversations I have are around data protection and security, and that's a lot of what we do right Is how do we protect the data that the customer has and how do we make sure that it remains secure and that nobody compromises that data or extracts that data or modifies that data that's on their infrastructure. Dave: Okay, and I'm guessing you're not trying to be the low-cost provider. Tim: We are not the low-cost provider. I wouldn't say we're the most expensive organization out there, but we are in the higher side, and the reason that we're the higher side is we bring a huge value to an organization. There is a lot of components within the IT support model that our lower competitors don't provide or don't understand, and those are the weaknesses within an organization that will cost them considerable damage to an organization if they get exposed right. Dave: Yeah. Tim: And then kind of go through those if you want to cover some of that stuff. Like let's just give an example of a business continuity plan right. If a company doesn't have a business continuity plan, that should be something that they should have in place, and they should have worked with their IT service provider or internal IT team to make sure that they've got a business continuity plan. If they don't, when an event happens, it's a total dumpster fire right, because they don't know what to do and they're very disorganized and it takes them an extremely long time to be able to recover, if they recover at all. So that's one example. Another example is compliance. There's a lot of compliance that's out there and that compliance is in place for a reason. Compliance is in there because somehow something got compromised and this is a compliance requirement that you now have to be in compliance with. It may be an access control compliance thing. It might be a reporting compliance to a legal agency. Dave: So talk to me about the first thing you refer to as the disaster recovery plan or the disaster recovery and business continuity. Okay, so my listeners love stories, so could you give me an example, like of one of your clients you know anonymously, that maybe went through a situation or maybe a company who was not a client but after they had an issue they hired. You guys give us a sense of like the elements of a really good you know continuity plan. Tim: Sure. So I'll give you an example. I had a neighbor that was in my neighborhood that you know. We would see each other at the neighborhood community pool. Our kids would play together, you know weren't real close to them. But you know you get into the conversation of having hey, what do you do by? The way, and you know, I told him I ran a managed service provider, an IT service firm, and we manage customer networks and we keep them secure. Dave: And he goes oh, okay, okay, Well, we got a guy. Tim: We got a guy he's good, he's been with me for five years. At that point, and you know, and wow, that's great. Well, if we need anything we'll call you, right, the conversation went away and that was about 15 years later. So the guy had been working for him for 20 years managing his stuff, managing his infrastructure, managing his backups, making sure again going back to data protection and security making sure that everything was safe and secure and we could recover it. Well, lo and behold, 20 years later he calls me up it. Well, lo and behold, 20 years later he calls me up, not him, but his wife calls me up, and his wife, you know, worked in the business for a period of time but it exited out. She called me up. She said by the way, I still have your cell phone number. I'm wondering if you're still doing IT, was their question. Dave: Okay. Tim: And I returned back and I said absolutely, I'm still doing IT. What's going on? She goes well. He was afraid to call you because he's embarrassed and we were in a very bad situation. This is a second generation builder supply company, probably doing annual revenue about $10 to $15 million in annual revenue. Dave: I said OK, what's going on? Tim: And she goes. Well, we've been ransomed and our data has been held for ransom and we don't know what to do. And our IT guy doesn't know what to do and he is really stressed out. And so the next step was is like well, I can jump in and I can help you. Let me know if you need my assistance. But these type of scenarios we've worked with before and we know how to be able to either negotiate with the criminals and negotiate the ransom to a point where you can actually pay it. If that's your only option, that's your worst option. But if we can recover your data from some sort of backup, we can go through the recovery process. Kind of summarize it we spent that particular client was not a client at the time and so they didn't have any of our backup or recovery procedures in place. They didn't have any kind of policy in place. They didn't have retention policies, they didn't have off-site backups. They had a lot of things. They didn't have offsite backups. They had a lot of things that were missing in that internal IT person's procedure. So what happened was is we came in and we immediately got on site and determined that they were using tape backup, and this is like way tape backup had expired like a long time ago. They had tape backup, they had ancient equipment, it was really. They obviously had put no money investment into their IT. Okay, the recovery for that client was about a week and a half and we were able to recover about 90% of their data. So it comes down to what we call RTO or recovery time objective. The recovery time objective is how long will it take us to recover your network based on our backup and recovery procedures? That particular customer we were able to get back up. Like I said, it was an extended period of time that they were out and they weren't able to do stuff. They were writing sales orders on paper and going back to a paper process. So they could continue their business, but we did get them back up and operational. We got them recovered and they became a customer and today we run very successful trials of the recovery system, as well as continue to make sure that their data is protected and secure. Dave: Did they end up paying the ransom they? Did not Because you got them close enough to 100%. Tim: We got them close enough where they had physical paper backup of the information that they were able to put back into the system. Dave: Okay, now help me understand the other end of that spectrum with somebody who was a current client that something like that happened to, and what was the difference as far as how long it took before you had them up and running? Tim: Well, you know, our current clients knock on wood have not experienced that. Dave: Because they've got a tighter IT infrastructure. Tim: Right, we've got the security and controls and again going back to the tool set to detect and have early detection of these type of events before they happen. So we have the security operations center that is constantly monitoring the security of the networks and the access to the networks and they look for anything that's kind of out of order. Dave: When something's out of order. Tim: then we identify it. We either isolate that system or we investigate it further and see is this a normal procedure that should be going or not? A normal procedure and a lot of this stuff is becoming part of AI now. Part of the AI capabilities is to be able to identify those things very early and stop them before they get any further into the network. So prevention is obviously a whole lot better than remediation. Right and that's what companies hire us to do is to prevent anything like that, a catastrophic event, from happening. Dave: Okay. Well, what about something that's more like a hurricane hits and wipes out their building? I assume you've had some kind of like natural disaster kind of thing where you've had to enact a continuity plan. Tim: Yep, yep, yep, absolutely so. Hurricanes here in the Gulf Coast of Texas, with the Gulf Coast of Texas being in a hurricane zone, we've had customers that their facilities have gone underwater. So one particular customer was on the south side of Houston and their facility went about five feet underwater. They, interestingly enough, had the server on a brick, thinking it was high enough. Well, it wasn't quite high enough, it was a foot off the ground, but it needed to be five feet off the ground. So that server went underwater and it was on when it went underwater. So it shorted out a lot of the components on the server, in which case, you know, they were like we don't know what to do In that scenario. We actually brought the hardware to our facility and we found out what component had failed and we replaced that component on the system and we were able to recover that system oh, wow, okay yeah, that's what we always want to do, is we want to try to use local recovery as much as possible just because of bandwidth or um, no, because of the time it takes to get the data transferred over from a replication process right. Gotcha If you're dealing with terabytes of data. You have to transfer that terabytes of data from either our data center facility or a cloud infrastructure, and that can be time consuming. That can be hours, if not days, depending upon the data. Okay, so some great stories. I mean, obviously we've had events happen. It's not uncommon for events to happen, but how we handle those events and how quickly we can recover from them is critical to a business to continue business for our customers and they can get back to business and be doing what they're doing selling things, manufacturing things, distributing things, whatever it is Okay. Dave: And are there any particular industries that you have, like you know, kind of particular expertise in where you know you would say that people in this industry might look out to you for yeah? Tim: There is. We're a very horizontal organization so we do have multiple industries that we play in. So we do play in the construction industry A lot of construction firms are in our portfolio, but also kind of an area where we've proven to have not only expertise in what we do but also the trust factor is in family offices. Dave: Oh, really Okay. Tim: Yeah, either high income families or ultra high income families. Obviously the privacy of those organizations, the privacy of the families, absolutely critical, and then the data that they're working with has high confidentiality. So, you know again, if that information was to leak out of the network or leak out of the system, then it would be a serious issue. So we've dealt with some of the highest wealth families in the world, oh interesting. Yep Obviously can't name them, but some brands that you would know, some organizations that you would know. It's amazing when I look at our portfolio, the amount of business like when I'm driving around town and I see companies around town and I'm like been in that building, worked in that customer, handled that particular customer, things like that. So yeah, you know, it's our high income or ultra high income. Families are probably a good percentage of our business. Okay, because they have multiple entities that we can support, consistent across all of those entities. So it's very standardized the way we do our business and very proceduralized so it makes it easy for them to understand. They get a quarterly report that provides them with the details and data that they know what we did for them previously and then we also forecast with a forecasting budget in the October November timeframe to provide them with a forecast so they can budget for their future IT needs and know what they're going to need replaced in the future. Dave: Okay, so was this just a case? You happened to stumble across, you know one of these family offices and then you know they run in the same circles and we're just got around that you guys were the go-to folks. Tim: I will say it has helped right In the. You know, in that particular market referrals are a huge thing. Our first family office we did stumble across. We didn't know we were working with an entity, one of their businesses, and then we, you know, they introduced us to another piece of their business and then they introduced us to the family office. You know we're having troubles with, you know, my buddy, my other firm over here, and we'd like you to kind of help in that area. So that expanded out quite a bit. And you know, again, there couldn't be. Our organization has to be the most trusted organization as a vendor that any company is going to hire, right? Sure, because you have to think about the access to the data that we have. We have access to absolutely everything. We're the administrator of your network, right? We have access to your email account. We have access to your email account. We have access to your employees' email accounts. We have access to your data, your financial data, your payroll data, your bonus data, all of the data that's out there on the network we have full access to. So you have to trust our team to the utmost in order to keep that information private, and I always approach a customer with. We're here responsible to secure and maintain that data. We're not here to look at what that data is. We don't know what that data is. Okay. Dave: Well, that's interesting here. I thought I figured you picked up that first client when you were on your mega yacht at the Cannes Film Festival. It didn't work that way. Tim: Huh, no it didn't work that way. No, it didn't work that way. I don't have a mega yacht and I wasn't at the festival, so okay, okay, yeah, not that I don't enjoy that stuff. I do have a house over at tpc, sawgrass and the players club and I do enjoy the country club life. You know I probably have the least expensive house in the neighborhood but I do enjoy the life. Dave: So nice, nice, I like it. So what do your clients tell you that makes your firm unique, like folks that have moved from another firm to yours, then they've been with you a while and I imagine you'll have a conversation hey, how's it going from your end? Are we meeting your expectations? I imagine you have conversations like that. What are they? What are? Are there any common themes? When they end up comparing you to the prior provider, they had, or how does that go? Tim: Yeah, there's a couple of scenarios there on why customers come to us and leave their current service provider right. One of the biggest things that I found with a customer that may be using a smaller service provider is they are really good at the tech stuff. They're not good at the business or the accounting side of the business, sure. So there's a delay in billing or an inaccuracy in billing and it's all of a sudden they get a stack of invoices three months later for work that was performed that they have no idea whether it got performed or what, and so there's a huge problem with the office operations of those particular service providers. So there's a pain point there and they're like I'm done, they come to me and they go, I'm done, this guy doesn't bill me. And then he bills me all at once, and then I got to try and back that information back into my financials and it totally screws up my forecast and my monthly reporting. So that's one reason that customers come to us. The other one is they don't get a response or the response is like unpredictable. So when they call in, they may get the guy right away, they may get the person like return their call the next day or three days later, so response time is really huge. I have a service desk here that is operated 24 hours a day, so our first level response is within minutes. So if you call my office, you'll get a response within minutes. If not on the first ring, it'll probably be the second or third ring. Dave: Oh, wow. Tim: Yeah, very rarely does any of our calls sit on hold or back up in the queue, so that's one way that customers come to us. The other way that customers come to us is that we have acquired eight other companies in the past 25 years. Dave: Oh, wow. Tim: Yeah, we completed our last acquisition in 2024. And we've gone out and found other service providers that may be struggling. They may not have the right business acumen to be able to run the business, so they're either marginally making money or they're losing money because they don't have the standard operating procedures that we have in place and the true business acumen to be able to run the service as a company. They've got customers, they're doing the work, they're getting paid, but they're not profitable. So we end up with firms like that that have come in through acquisitions. Dave: So yeah, I can see that and that's probably where your American Express background was helpful. Right Because you've had exposure to, you know, enterprise grade operations billing HR. Right operations billing HR right To where? Because American Express strikes me as just a well-run, well-oiled machine? Tim: Absolutely yeah, and I will say yeah, I will give them credit for that. You know it was a great run over there for 10 years and I learned not only about you know my job role and continuing to build on my experience in my job role, but how a company operates from a branding perspective, in branding your organization and keeping that brand consistent, but also in standard operating procedures and standardized deployment of systems. Right. I always refer back to not only my American Express days but the Southwest Airline days of standardization. If you can standardize the particular piece of your business that you're running, then it makes it so much easier. So we have standard software applications that we put out from a security tool set. We have standard equipment that we sell out to our customers, all on the Dell platform. My team is trained on the Dell hardware. They're trained on the tools that we use. The security tools, the management tools and all of those things integrate together to make a successful business. Dave: And again it goes back to enterprise level policies and procedures and way things that are, you know, repeating things that are successful you know, repeating things that are successful, okay Well, it sounds like like the first two parts of your success just seem mind blowing to me how you thought of this. But answer the phone when clients call and invoice timely Wow, I mean that's, that's quite a that's quite as. I mean I can't believe, to be honest, that you shared that secret sauce with me. I mean, my goodness, I mean that's. If you're not careful, there'll be other companies will start answering the phone and invoicing timely with that, you know inside knowledge. Tim: Yeah, I hope that we can improve the rest of the service providers out there, right. Dave: Sure. Tim: Competition is good. I like competition. It keeps us going. It gives us something to work towards as well. Dave: Yeah, so you talked a bit about some of the acquisitions and it sounds like you're kind of in a place where you're always open to the right acquisition. What are kind of the ideal characteristics of like the ideal acquisition? I'm guessing you're not going to try to acquire like E&Y's consulting group. I'm guessing you're looking for smaller operations than that. Tim: Yeah for sure you know. So an organization, the organizations we have acquired, have been anywhere from a half a million dollars to two million dollars in revenue. Those organizations the owners may be getting older, they may be getting ready to retire and they're not sure what they want to do with their business. What they do know is that they don't want to continue to run it Right and that it's marginally. They're making the same amount of money or less than if they had a corporate job Right. So it's sad to see, because they love what they do right and they want to place their customers in with a firm that has a similar culture, that takes care of their customers and really make sure that they're doing the right thing for their customers. So a firm that might be in a half million dollars to two million dollars in annual revenue, or the firm might be a five employee firm or smaller, and that they're getting to that point where they're kind of tired of running the organization and they'd like to transfer. They've taken care of their customers over the years and they've made relationships with those customers over the years and they like to put them with an organization that will take care of those customers and make it a seamless transition for the customer base sure, and I bet, I bet these sellers would probably be shocked if they were able to come in and look at the finances of their business like two years after you've acquired it. Dave: Right, because I'm guessing? Tim: Historically, yes, I will tell you, in probably at least half of those transactions that we've done in the either 12-month or 24-month payout period, they've made more money in that 12-month or 24-month period than they've made in the last three to four years. Dave: Oh, because that earn out ends up being a function of how much you bill over those 12 to 20. And you dramatically increase the revenues, so they're automatically getting participation in that. Absolutely. If they'd known that they would have sold to you 20 years earlier. They just wanted to work for you had their payout and then just become an employee. Right, they want to come out way ahead. Exactly, yeah. Tim: Yeah, now it's really good to see that. I mean, you know, that's one of the things that my competitors don't do. They try to come in and offer this ridiculous number for a business and then the earn out. They beat them up on the earn out and end up with anything. They end up with an initial payment and then maybe they'll get an earn out, maybe they they'll get an earn out, maybe they won't get an earn out, but they're going to tell them how horrible their organization was and how bad the customer base was and how it's not profitable and you know, it's just not how I do business. Dave: Yeah, and I'm having done. Did you say eight acquisitions? Correct, yeah, I'm guessing you've done enough now. That now you have the ability Correct? Yeah, I'm guessing you've done enough now that now you have the ability, the same way that I understand you know when Berkshire Hathaway acquires a at that same point. Now You've got enough success stories that you can point to those as another differentiator, right? Tim: Yeah, absolutely, absolutely. We're not at the Berkshire Hathaway point, but we got a couple under our belt and a couple of examples that we can refer back to and have some validation around our acquisition process. Dave: Yeah, because I'm just like, as I'm just playing through some hypothetical numbers, like you know, if a company had, say and you don't have to confirm these, but say a company was doing half a million in revenue, the profit is say you know 50 grand and you buy them, is say you know 50 grand and you buy them, and it wouldn't surprise me if, like, two years later, you know that revenue number doubled and the profitability number like quintupled probably, and or you just you know dramatic increase. Just because you know I mean, quite frankly, you just have a better run business model but they had you're able to plug them in and so that's absolutely our goal. Tim: Yeah, and so your win isn't so much we like to see play out right. Dave: Yeah, and so your win isn't like other folks where you promise the moon and then you figure out all of these ways to not pay them. It sounds like your process is just like hey, because in your mind, being a strategic buyer, that business is worth way more to you. You know two years later, once you've done your magic to it, that business is worth way more and so you're okay paying them on an earn out, on a growing revenue number that maybe they didn't even contribute to, because at the end you know, as a I mean like on the front end you might pay, say you know, one times revenue, let's say just to pull a number out but by the time you get to the end of it, if the business is doubled and the profitability is quadrupled, you really ended up paying only one third or one half revenue. And so all of a sudden, whether you know found a way to squeeze them to where the imputed value you paid was one third annual billings or it was half of annual billings really doesn't matter, because the real value for you is like, year three after the earn out. You've got this great profitable book of business that you know you didn't pay much for in comparison to what it's worth two, three years later in your enterprise. Is that right that's? correct, yep, absolutely but the reason you didn't pay much, though, in in all honesty, was because the business wasn't very valuable. Tim: And it really wasn't right. Dave: Yeah, I mean they had owner value. Tim: Street value had a zero valuation on it right. Dave: Yeah, they had probably owner concentration risk. They may have had customer concentration risk, poor processes systems. You know the type of company that you know. There weren't people beating their door down to buy their because, effectively, you're just buying a job. If you bought that business, all right. How much do you pay for a job? Most people don't want to pay very much for a job. Now, what do you look for in an employee, just like you know the most techie person you can find. Is that really all that matters? Tim: No, it's not necessarily you know the most skilled technical guy out there, right? So one of the strategies that we have and maybe I shouldn't share that because my competitors may hear it, but we are a strong supporter of our veterans, so we have veterans that work in our organization. We're probably a 75 percent veteran organization. Dave: Oh, wow, ok yeah. Tim: Yeah, and we enjoy that. They come to us with technical skills and abilities but we build upon those we really do Right and we develop those particular individuals to be much better at what they do. But having our veterans on our team has been hugely successful from a reliability standpoint, as well as a dedication standpoint and the understanding to be able to follow orders as given, right Okay. So that's how we've been able to do that and our retention rate is extremely high. I would say that our culture is very good. We're very family oriented. We're very you know when work has to get done, work has to get done. But we also realize that the family comes first and there's family things that come in the way that need to be addressed. Right. You can't. Your kid gets sick. You have to go take care of your kid, you can't be at your job, right? Those kinds of things and being able to balance that. That was one of my challenges at American Express. I was a new father in my ninth year at American Express and I realized that, even though it was written in the book and preached on the values of the company, when it came time to actually exercise that it wasn't as flexible as I had hoped I was like you know. This is another reason I kind of need to get out. I need to raise my daughter and I need to, you know, and I plan to have other children. So family values and longevity of employees, it makes a huge difference you have to think about. If you have an IT guy in your organization and they're only there for a year or two years, they've gained a little bit of knowledge about your business and how it operates and what computer systems are, what systems and software you're using in your business. They get intellectual knowledge right that walks out the door when that employee leaves or you release that employee. Dave: Yeah. Tim: With maintaining our staffing. I've got people on my team that have been with us 15 plus years and they have a history of our customers that is like you can't buy that right. Sure, you've got that knowledge of that network, of when it was built, like we've built some of these companies, so we know it from day one and what we've done to different applications and how we've modified them over the years. So just having that knowledge be maintained with your service provider is huge, so, and we can go back and look at you know, oh, here's a ticket from 15 years ago that I worked, that I resolved this issue, wow. Dave: And how do you know? You know, cause it sounds like the company has been growing both organically and through acquisition. How do you know when it's time to hire? Do you wait till? Like people are working a hundred hours a week in complaining and quitting. Tim: Is that? Dave: the point you say oh geez, we probably should get somebody hired and we should probably hire in a hurry. The first person we come across Is that your growth strategy? Tim: for your people? No, definitely not, definitely not. So we have a lot of KPIs in the business that we can measure the performance of our organization, and mainly that's around resource utilization. Okay, so we have a lot of tools in our toolbox that give us an indication of when an employee is overloaded or when they have too much on their plate, so we can shuffle that within the business and be able to see who's got the workload and who doesn't have the workload, be able to move things around within the organization. But then we can also look at our utilization levels and, number one, make sure that we're profitable with those utilization levels but also staff appropriately to those utilization levels and know when it's time right. It's like okay, we acquired a company with five big customers and we didn't get any employees with it. Do we have the bandwidth or do we need to increase our staffing? So we really have a lot of KPIs around measuring that to make sure that we don't stress our existing resources and we balance it out that our people are profitable but they're not overworked. Dave: Yeah, no, that makes sense. And then how do your new employees come to you? Is it referrals from other employees mostly, or no, we do have. Tim: I sit on the board for one of the technical colleges and I use that technical college as our you know more or less recruiting platform. We find the best of the students. You know the kids that are shining. You know they kids that are shining. You know they're showing up on time for their classes, they're interested in developing their skills and they're really, you know, the top students in the tracks right Okay. Yeah, and then we recruit them out of there. We recruit them in at our first level, our entry level, on our service desk team and we build them up in our organization over a period of time, so lots of opportunity for them to grow once they come into our organization. Dave: Yeah, that sounds like a great way to bring new folks on. You can train them the way you want trained with your processes and systems. Tim: And then keep them right. Keep them you can give them a growth path and keep them so that they can be. They can get better at what they do, get a higher compensation, be successful in life. There's nothing makes me happier as an owner than to see an employee grow from where they came in the day they started with us to being successful in life. Buying a home buying a car, having a family, all of those kinds of things right, those are really important for me. They're kind of like energy for me to see a person develop over the course of their career with our organization. Dave: Some of my guests. When I ask them, like what's the most satisfying or gratifying part of the job, it seems to fall into two categories. It's either the satisfaction they get from serving the customer or the satisfaction they get from watching their team grow. It sounds like you're probably more on that watching the team grow and that and then they. I think it was Herb Keller that had the idea of take care of your employees, and your employees will take care of your customers Absolutely. Is that right, that your satisfaction comes more from taking care of the employees, and then the happy customers are just an expected outcome? Tim: Yeah, that is a result, right, absolutely. So you know, when I started started this organization, I started in the spare bedroom of my house. Oh okay, I had two analog phone lines. One was for my phone and the other one was a backup phone line, but it was also used for my dial-up internet to be able to help, oh wow, remote into into customers. Right, and looking back, I walk in now to our operations center and we have a pretty impressive organization and a pretty impressive facility that we own. And walking in now I'm like, holy crap, what the heck did I build? Dave: right that's awesome. That's super satisfying right, super yeah I can imagine well I cannot believe how the time is flying by. I always tell my guests it's like the fastest hour of their life is being on the podcast. Tim: How are we going to fill that hour, Dave? Dave: Yeah, I know. So I've got just two questions just to wrap up. If you had a time machine and could go back and give some advice to like your 25 or 30 year old self, what advice might you give yourself? Tim: Ooh, that's a good question. I don't know. I don't know the answer to that. What do I give myself? I probably would have started my organization sooner. Dave: Bingo. That's the answer that 90% of the people have. Tim: Yeah, I would have started my organization sooner. I needed that enterprise expertise, but I would have started it sooner. Dave: Sure, yeah, it's yeah, because the funny thing when you're an employee and if you follow the career path that your family suggested is actually they think it's a low risk, safe career path. But it's actually a high risk path because you have a customer concentration issue, meaning you have one customer, your employer and, as you learned three or four times that if they decide they don't need you anymore, you basically lose 100% of your income. They don't need you anymore, you basically lose 100% of your income. So it's actually less risky to have you know, even if you're just doing like consulting and all yours, just like a contract employee working 10 hours a week for four different companies, doing whatever. I find that that's far less risky, because if one of the companies doesn't need you, then you know you've only lost a quarter of your revenue. Tim: Yeah, I call it a scenario of I get hired multiple times a month. I hope I never get fired, but occasionally I get fired. But it should have an impact. I like it Well. Dave: so here's my last question. So you're a naturalized Houstonian, like I, am Tex-Mex or barbecue. Tim: Ooh, I like both really well. But yeah, tex-mex thing. If I don't have Mexican at least once a week, I'm going through withdrawals okay, so Tex-Mex? Dave: yeah, now, one person answered that question. I borrowed this from somebody else. One person answered it. They told me about a Mexican restaurant that has great brisket and they make like brisket enchiladas and brisket tacos and brisket quesadillas and he said that was like the best of both worlds there. And I thought, boy, that sounds like it. Tim: Yeah, there's nothing better than a brisket taco, for sure. Dave: That is awesome, I make some of those myself. That is great. Well, hey, as we wrap up, is there anything? I did not ask you that you wish I had Tim. Tim: No, I'd like to close by saying I shared with my team today and I'm always trying to come up with something that I share with my team every day and today I came up with solutions as a defense system designed to protect the most critical assets of your business the data. I like to just kind of close with solutions I as a defense system designed to protect your most critical assets your data, think about think about if your business lost access to its data, regardless of the circumstance. If they lost access to the data, what would that do to your organization? That's what we protect from. That's what we protect from. That's what we protect from happening. Dave: Yeah, Charlie Munger talks about the number one key to recognizing a great business opportunity is finding a company who's riding a wave that's only going to grow and increase over time, Because really all they have to do is just stay on the wave. Well, that certainly has applied to you, right? Because 25 years ago you probably had some companies that said ah our data is not that important. You know, I've got a Rolodex with all my clients' phone number and email, and you know, so the importance of data has only increased during that time, right? Tim: Oh yeah, it's dramatically increased yeah. Dave: Well, it's also. Tim: Everybody trusts that data will be there when they're ready to use it. Dave: Yeah, well, and also the other fact is digitization right 25 years ago, most of their data may not have been digital, it may have been analog or paper or whatever, but now virtually everything is digitized, which makes the data even more important. Tim: I go back 35 years in this industry and when I go back and look at it, I replaced the inner office envelope. Oh yeah, people would type up a memo on a typewriter, put it in an inner office envelope and put whoever was going to and put it in their outbox and the mail guy would come by and pick it up. I replaced that guy. That's true? Dave: Well, that is awesome. Well, Tim, I really appreciate your time. This has really been fun and you've really given me kind of an insight into what makes a really well-run IT services firm operate. So I really appreciate your time. Tim: Yeah, I appreciate your time as well, Dave. Always good to chat with you and good to catch up and appreciate your time today as well. Thanks so much. Dave: All, right, yeah, you too. Special Guest: Tim Loney.

In this episode of the IC-DISC show, I speak with Susanne Cook, a senior partner at Denton's Cohen and Grigsby, exploring the world of international trade compliance. Based in Pittsburgh, Susanne chairs the firm's International Business Team and provides insights into import regulations and export control classifications. We dive deep into the complexities of U.S.-China trade relations, examining Section 301 tariffs and their impact on small-value imports. She shares practical strategies companies use to navigate these challenges, such as China's establishing factories in Mexico to counter tariff restrictions. The conversation highlights the critical importance of accurate prior disclosures to regulatory agencies. Through a compelling case study, Susanne illustrates how businesses can effectively manage compliance, demonstrating that U.S. agencies can be forgiving when companies approach disclosure with transparency and comprehensiveness. Beyond trade compliance, we touch on personal development. I share insights on work-life balance and the significance of building a capable team. Susanne's expertise provides a unique lens into how professional challenges can be navigated with strategic thinking and thorough preparation.     SHOW HIGHLIGHTS Susanne Cook, a senior partner at Denton's Cohen and Grigsby, shares her expertise on international trade compliance, focusing on the import side of the practice. The episode discusses the importance of accurate prior disclosures to regulatory agencies and the potential consequences of incomplete disclosures. We explore the challenges and strategies related to U.S.-China trade relations, specifically regarding Section 301 tariffs and the implications for small-value imports. Susanne provides a case study on determining export control classifications, highlighting the role of full disclosure and the forgiving nature of U.S. agencies when proper steps are taken. The conversation covers the growth of Denton's trade practice, emphasizing their specialization in assisting foreign companies entering the U.S. market. We examine China's strategy of building factories in Mexico to circumvent tariffs through USMCA and the role of trade experts in advising businesses. The discussion touches on the characteristics of an ideal client for trade advisory services, including large companies with sophisticated internal traffic groups and growing businesses. We highlight the importance of early compliance to avoid potential pitfalls and the necessity for companies to understand their import-export responsibilities. Susanne and I delve into personal growth and team building, discussing the significance of surrounding oneself with a capable team and achieving work-life balance. The episode offers practical advice on personal and professional development, emphasizing teamwork and strategic client selection.   Contact Details LinkedIn- Susanne Cook (https://www.linkedin.com/in/susanne-cook-722a239/) LINKSShow Notes Be a Guest About IC-DISC Alliance About Dentons GUEST Susanne CookAbout Susanne TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hello, this is David Spray and welcome to another episode of the IC Disc Show. My guest today is Susanne Cook, and Susanne is a senior partner and she chairs the Denton's Cohen and Grigsby International Business Team, so her practice is all international trade and one of the fun things we got into was on the import side, which I know little about. So, although our firm has an export focus, it was really interesting hearing about the import side, because many people assume that if we have exporting capabilities and expertise, that we have comparable capabilities on the inside, or the import in which we don't comparable capabilities on the inside, or the input, in which we don't. So this was a wide-ranging interview and Susanne is a really interesting person and she's from the Pittsburgh and in the Pittsburgh office of the firm and I hope you enjoyed this episode as much as I did. Good morning, Susanne. How are you today? Susanne: I'm doing well in sunny Pittsburgh. Dave: Oh, that is great. Now are you a native of Pittsburgh. Susanne: No, Pittsburgh is my adopted city. You may detect an accent I am German. Dave: I attended law school in the United. Susanne: States. I attended law school in the United States and Pittsburgh is my adopted city and I am a fan. Dave: Okay, that is great. Well, I know that you chair your firm's international business team. Susanne: What does that tell me about what that entails? Tell me about the international business team at DIMMS. It really consists of two pieces and maybe going into it historically kind of explain the development of that team. Being German, I've always had an interest in international law and I liked Pittsburgh and decided to practice international law from Pittsburgh, heading out of law school, and in those days it was a little bit more unusual than it is today. We lived through COVID and can connect from wherever we are. 10, 20 years ago it was more unusual to practice international law in Pittsburgh, but that's what we decided to do so. We tend the group tends to international clients coming to the United States to do business here and have developed what we call the soft landing program. And that grew the trade practice, the export-import trade practice that, frankly, within the last five years or so has quadrupled in size. We engaged additional attorneys in that field as trade. Dave: Everybody reading the paper can see how we impose additional tariffs, how we impose additional expert control measures and so, responding to that need, that part of our practice has grown incredibly of our practice has grown incredibly Okay, and so it's mostly I guess they would call this inbound business mostly foreign companies trying to do business in the US, or is it split pretty evenly between that and US companies like on the export controls work and such? Susanne: I'm glad you're asking. We do both, but the majority is really inbound. Yes, we do assist companies, do business overseas, but really what that entails is finding somebody in that country who is like the Susanne Cook overseas to do what we do here, and ultimately we just hand it off to a good resource. Now I think that's valuable for a client, but really where we are more engaged is on the inbound side. And then for on the trade side, it's also companies who do business internationally and need US export control advice. Dave: Okay, that's helpful and so help us understand. I love case studies, examples. Could you give us an example? And if you need to anonymize the client's name, of course feel free to do so but maybe give us an example of like a couple engagements that might be representative and maybe kind of lay out sort of the fact pattern and again, you know, anonymize as appropriate. Susanne: Right, of course. Of course, a simple case study would be a client who is engaged in exporting and at one point wonders whether the software or a hard product is export controlled and reaches out to us and we look at the product and assist in classification as to whether this item is controlled or not. If we determine it's not controlled, that's wonderful, the end of the story. The next step may be that it is controlled and at that point we look at okay, point, we look at okay. We look at past exports to see if any of those should have been pursued under a license, and that could be a license through commerce, it could be a license under ITAR, which is military, and ultimately, depending on the circumstances, that may lead to what we call a prior disclosure, where the client approaches through us, the regulatory agency in charge, and discloses the issues in the past. And I have to say that generally US agencies are pretty forgiving. Us agencies are pretty forgiving. If the prior disclosure is done well, the circumstances aren't too egregious. Generally, I have to say, our prior disclosures we've had great success in coming clean and the client then can walk away knowing that this is not in their past and could pop up any moment. Dave: Well, I'm really just, as a us citizen, I'm really pleased to hear that, because it would seem like like that's the system that we would want, that now I'm. I'm presuming, though, the flip side of that if the client does not identify the issue and the government agency somehow identifies it then the consequences are maybe not as favorable to the client. Is that a fair assumption? Susanne: That is, yes, that is the dynamic here and really also I always say there's one thing worse than not doing a prior disclosure and doing a bad prior disclosure At that point doing a prior disclosure means full disclosure, because if a partial disclosure is done and the agencies find out that this was really a very calculated prior disclosure, with keeping in the background some of the items that the client wasn't ready to share, that is actually viewed as an aggravating effect an aggregating, aggravating effect. Dave: So it's all, it's almost so. In the sequence, the worst thing to do is a prior, an incomplete prior disclosure, and then the next verse would be no disclosure and the agency comes calling and, just you know, plead ignorance. So you actually get in. Typically, the client would get in less trouble for just being clueless, if you will, than for strategically disclosing only some stuff. Susanne: Oh, absolutely, that goes to knowledge right. It is negligence, gross negligence, or this now goes to intentional misconduct. And with respect to intentional misconduct, even if the client decides not to do a prior disclosure for whatever reason and there are reasons what we consistently counsel the behavior cannot continue because once it has been determined that something should be corrected, if the client continues doing that now it becomes with knowledge intention. And so, yes, it has to change one way or the other. Okay, yes, yeah way or the other. Okay, yes, yeah, so that is on the export side. We also in the trade, we do the importation side and it's rather similar and again, like the export side, we like to stay ahead of trouble. I always say we can do it this way or this way. And this way is prospectively working with a client, developing a program where violations are likely not to occur, or we can assist after a violation occurred, and we much prefer to be on the front end and I think really the client is served better. Dave: Now, on the import side, where does the trouble lie? Susanne: Is it failing to pay like an import tariff, or and there I can tell you, we used to have tariffs averaging of maybe 0.4 to 0.6 percent. There were a few, maybe two, three percent duties, and companies, and the regulatory agencies as well, did not pay a whole lot of attention to payment of duties. But now we have the Section 305, 20 percent duties that are imposed on pretty much all goods from China. We have other tariffs, similar to the Section 232, imposed on most of steel that we import. So now everybody pays attention, as you can imagine, and so the incentive of trying to find a legal way to not pay those is, you know, much greater than it was a couple of years ago. At the same time, yes, customs pays attention much more than they did five years ago, because we're talking real money now. Dave: Yeah, yeah, it's much more material. So I'm really not familiar with the import tariffs. How do they logistically work? Does the importing company that's subject to the 25% tariff? Are they responsible for like remitting that to like volunteer? You know, I say voluntarily, but but is it their responsibility or is there somehow like a? Is that basically how it works? Susanne: Yes, the system works through customs brokers. Okay, so it's rare that a company will perform their own entry, so they engage a customs broker and the customs broker is like the intermediary in this system. And, yes, all duties are being paid through that system. Okay, all duties are being paid through that system. A significant part of determining what duties are due is what we call the harmonized tariff schedule classification of the product. Believe it or not, it's kind of mind-boggling, but anything, any product in the world has an HTS classification. Dave: Okay. Susanne: So, and it can get tricky, particularly sometimes products evolve. They were not even there when the HTS was developed. But still somehow we interpret it for those products to be classified in this HTS system. Sometimes reasonable people can disagree on classification and there's a ruling system. One can go approach customs and request a ruling. But really it's like anything garbage in, garbage out. If there is an incorrect determination on the HTS classification, only bad things can follow. Dave: Yeah, and I'm guessing the reason that you know that there may be a difference of opinion in the classification is because one product may have a higher import tariff than another, so thus the client seeks to make the case that it should fall under the lower tariff classification. Susanne: Absolutely, absolutely. And even when we submit rulings it's a little bit like you know, even court filings, you kind of make your best case as to why we believe this product falls in the category that we would prefer it to be in. Of course we have to be accurate and correct, but, yes, we stress the factors that would make it more likely for a product to be classified in our desired classification. Dave: Okay, and so, and again the process. So the customs broker is actually the one doing the classification of the product. Susanne: They do. However, they work on very, very small margins. Dave: Right. Susanne: And so in difficult cases, yeah, they will make a suggestion, but ultimately it's always the importer's responsibility. It's kind of like a tax return you engage your CPA, but if something goes wrong, it's the taxpayer, and here it is the importer of record who would be on the hook. So in difficult cases or if there is a whole lot of money involved, we get involved as a law firm in classification as well, and it's you know. The sums of money could be staggering. Dave: Yeah, yeah. And so the product comes in. The customs broker, either proactively or independently, will do a classification of the item, or maybe a preliminary classification, or, if it's not clear, they'll perhaps reach out to the client for guidance. Is that my right? So far, that's right. And then the product comes in. And then how soon does the company have to remit those tariffs? Is it a weekly process? A? Susanne: monthly process, quarterly. It's a simultaneous process. Dave: Simultaneous okay. Susanne: Simultaneous process. Dave: It's a simultaneous process, simultaneous. Okay, simultaneous process, obviously, but I'm guessing if they receive the product, if the product lands at 4 pm on a Tuesday, they don't have to remit the money at 4 or 1 pm on Tuesday. I assume there's some. Susanne: There's some leeway and there is a customs bond in the background. Dave: Okay. Susanne: Backing up the payments so as I increase their imports or they may not even increase them. But there is now all of a sudden a dumping duty applied to the product or a 25% additional tariff because the items are shipped from China. The bond may have to be increased because it doesn't cover the standard amounts anymore. Dave: I see, and the bond is that required by customs? Yes, and every company has to have one, or when they get to a certain size. Susanne: Every company has to have one, or when they get to a certain size, it's through the broker. The broker always yes, it's part of the system. Dave: Okay, yes. Susanne: So every product that gets imported is somehow falls under the umbrella of a particular bond. Unless, it's a one-off like you and I just importing things. We're not under that bond system but in professional companies who import as a business. Yes, a bond would be involved. Dave: So is there a threshold where those tariffs come into play? Like if I buy a hundred dollar item from China and I'm buying it with the intent of selling it in the US and I sell it for $150. I mean, is there a minimum threshold? Dollars $800. Susanne: Okay, yes, and this is actually subject to scrutiny, political scrutiny by now, at this point. To scrutiny, political scrutiny by now, at this point, because these de minimis entries are subject to no duties and in this age where everybody is ordering stuff online, and sometimes these are big businesses who are shipping entries, hundreds of entries every day into the United States to the ultimate customer under the $800 exclusion limitation, and a lot of them are country of origin, china, which is under scrutiny. China is a country that is under scrutiny. These de minimis shipments are currently scrutinized and I would frankly expect there to be additional regulations by the end of this year or beginning of next year, just cutting back on these exclusions, because you can see the Congress is suspicious that this is being abused by larger companies. Dave: Yeah, and is the 800 per order, or is it a cumulative amount for a period of time? Susanne: It's per entry per day, so if the US consumer are the recipient of I don't know what you ordered online, that would be, let's say, $600 worth. Dave: So the strategy if I imported $20,000 of goods annually from China and I divide that by you know 250 business days, I think that's like about $100, like a day. If I'm doing my math right, 250, 2500. Yeah, so that's about $100 a day. So if I had that, my strategy then would be to ensure that the imports are staggered such that no one day $800 is imported. Right, and that's the strategy. I can imagine where that'd be a complicated thing to try to pull off, you know the coordination and the timing and it wouldn't be so much there. Susanne: And it wouldn't be so much there. But if you're doing like $200,000 a year, or you divide that by $250, and you're approaching $800 a day, then I would imagine that it would be very difficult to try to manage the timing of all of that. And it's also an issue, frankly, on custom side, because those small orders typically are not scrutinized, and now, if we are scrutinizing them, that's also an increased bureaucracy. So there are considerations here on all sides. At the same time, there are in place, as we all know, increased regulations on imports from China. All these Section 301 tariffs are mostly from China, on goods from China, and one of the proposals is that these de minimis items still would be subject to the 25% Section 301 duties, which they currently are not. Dave: I see. So you're saying that $800 threshold would no longer apply. So if you import, an item that costs $2, you still have to pay 50 cents. Susanne: But then again the bureaucracy right. So there is a real it's not an easy issue, but yes, it's mostly targeted really at China. Dave: Yeah, so one of the things I follow closely it's just a hobby of mine is the electric vehicle space, and I don't know if that's something you pay much attention to, but China produces like I think the latest stats I heard 70 or 80% of the electric vehicles produced in the world are produced in China, and they have tremendous excess capacity. I want to say they produce like 100% 15 to 20 million electric vehicles a year, but they have capacity for like 15 months. So of course they're looking to export them, and so one of the ways that they're looking to get around this is to take advantage of NAFTA or whatever the new NAFTA name is. What's the name? Susanne: USMCA yes. Dave: So what they're doing then is they're building factories in Mexico. Yes, so what they're doing then is they're building factories in Mexico and then importing that way, and what's interesting is that's like historically seemed to be appropriate because it's been a Mexican produced product. It just so happens to be owned by a Chinese company. But the, the talking or the, the suggested proposals, I think by both parties, certainly by the Trump administration is to disallow those products to be exempt from the import tariffs. I'm just curious have you heard anything about this? Not particularly, I have not followed the electric vehicles. Susanne: But that doesn't surprise me at all because those issues are always raised and trying to fight circumvention, where the country of origin is being changed artificially or legitimately right, and that decision and determination is always in the eye of the beholder and there are significant incentives to try to deviate from the country of origin determination of China and at the same time, the United States is investigating these issues all the time. And yes, there are exclusions I'm aware of, for country of origin or to no longer benefit from USMCA for certain specific items, for example. Another item is steel from Russia. We impose more restrictions on that, even if it's channeled through Mexico, and really I mentioned that our group, trade group, has increased. Well, as these issues increase, it really requires more attention and more expertise to advise clients on what is permitted and what is not permitted. And, of course, as a US importer, you always want to import items with the least amount of tariff. Dave: Yeah, of course. Yeah, no, that makes sense, well, good. Well, that's really helpful, because the funny thing is, you know, our practice is all export driven, but the average person thinks export is a part of a compound word called import-export and they just assume that we're well-versed in all the import rules and I always have to keep telling people it's just, that's not what we're focused on. So my knowledge of import rules is now infinitely higher than it was an hour ago. So thank you for that, Susanne. Susanne: You're welcome. You're welcome, and I can see how clients view that. To them, it's just things that cross the border. Dave: Whichever way, yeah, it's all the same to them. So what would you say are the characteristics for you of like an ideal client? Because, like I'm guessing, somebody who imports you know $2,000 a year of stuff from outside the US and they have a business that does $50,000 a year in revenue, I'm guessing that's like you all. That's not a good fit for you. It's just like overkill, right, there's just not. So help me understand what just like. Maybe you just pick the perfect client. What would the characteristics be? Susanne: There are really two buckets, I would say. The one is, of course, we like working with large importers and exporters who do this all the time, who have a traffic department who manages these functions and, as it gets to be, let's say, like you mentioned, the electric vehicle to a very specific case where they need outside assistance, that would be then our role and that is an ideal client. There is another bucket, and the other bucket is really the growing business. You know, if you are the company that imports $100,000 a year, okay, often, really, the company doesn't even realize they're importing and they often do not pay a whole lot of attention to that. Dave: Sure. Susanne: In the way our international world is going, they probably will increase the imports and their exports over the next couple of years and to me it's always best to counsel that company on how to develop a department that looks at these issues and remains compliance, not when they are now importing or exporting 100 million. You want to catch them before that. I don't know when that ideal spot is to where they don't get into trouble. As I said, we always want to counsel companies before they get into trouble. Counsel companies before they get into trouble. The function is a little bit on how precarious the items is. If everything let's say half a million dollars all imports from China, I would take a look at that, the imports that will be scrutinized. Or if you export, and you export half a million of items that are export controlled, you need to pay attention. So there is a little bit of an overlay. How controlled is the item? But and if it's just, I always use the example of brooms where you import brooms or export brooms not regulated of course then the threshold would be higher. You're really not under much of a scrutiny at all Not that there are none, but it's much less and really I would love to get all these companies at the sweet spot. Sure they grow appropriately and have a system in place, because it's always harder If you get somebody with 100 million of imports. They don't even have a good system. That's a difficult task. Dave: Yeah, yeah. So just to recap, so kind of the two perfect types are one would be like a large company with a relatively sophisticated internal traffic group, that's, you know that you know is basically set up for success and you know, they kind of know what they're doing. And then they call on you for specific arcane cases or situations where they can pull you in, you know, kind of as the expert. Now do you actually do you do opinion letters? You all do opinion letters in your practice. Susanne: We do, we do, and opinion letters is really on both sides export control and on customs. It's only the agencies who can give a binding ruling on how these items are classified. We will give opinions. What that will do? It will mitigate culpability. It doesn't mean we say we are 100% right all the time, because only the agencies can give these rules. Dave: Of course. Susanne: But it will go a long way to mitigating any exposure because the company obviously went out of their way. Dave: Yeah, well, and they relied. I think the key term is the reliance. They relied on your opinion and so, like you said, that then gives them, you know, protection from you know the extreme impacts of regulatory rulings. Susanne: Correct, correct and, yes, we will give opinions. Of course, a better way, if it's possible, is to get a binding ruling, because it's actually, in a way, often less work to get a binding ruling. Dave: Oh, is it? Yeah, I can see why Because you only have to provide enough data to satisfy the regulatory agency, Whereas for an opinion letter you maybe have to be more comprehensive to encompass all these different factors Correct. Correct. Yeah, that makes sense. So this is where, as we're nearing the end here, so I'm going to put you on the spot with this one. Okay, Are you ready? So I'm guessing that Denton's is not the only law firm in the world that's involved in international trade. Is that probably a fair assumption? So why, when your clients select you specifically, or the firm, if you've ever asked them, hey, you know how did you choose us. Why did you choose us? You know why do you keep using us? What's the response you get from your clients as far as why they they use the firm? Susanne: I believe that they use us because we are extremely business oriented and a lot of the other trade outfits are much more theoretical and okay professorial and really I going back full circle to my introduction how we got into this. We got into this because we have had clients in that space that we wanted to assist. Dave: Okay. Susanne: So we're a little bit more of like an in-house legal department. How we look at this, we're very practical. What can the company do to implement these rules and regulations with undue burden? We don't just counsel. These are the rules. This is what you have to do. We always take it a step further and assist the client in finding the best way to be compliant. Dave: Okay. Susanne: And that's in our blood. Dave: Okay. Susanne: Any piece of advice we give, we always ask ourselves, when we look at it from the perspective of the client, the company Okay, how can they do that? How can they do that? Because one can give all kinds of theoretical advice, which is good advice, but it just doesn't work, and we always ask that question. So I think that's an advantage. The other advantage is just the location Pittsburgh. Our cost structure tends to be more competitive than a you know, yes, our competitors often sit in new york, manhattan, in chicago, miami, the big trade centers now Trade Center. So now yes, so our cost structure is a Pittsburgh cost structure. Dave: Yeah, and then I suppose for a client who's actually based in Pittsburgh, it's a you know kind of a bonus or that makes you uniquely attractive to have a local resource with the international capabilities that you all have. Susanne: Correct, correct. Dave: Okay, so I've got only two more questions. One's an easy one. One's gonna be the hardest that you're gonna have. So the easy one is is there anything I didn't ask you that you wish I had asked you? Anything we didn't cover? Susanne: No, I would say that the one area we all believe that trade compliance will continue on this trajectory of increased attention and I think duties will continue to increase Export control requirements will increase as well. So I think this trajectory, will continue for anybody doing business internationally, and really this is one of the areas where it does not matter how our election will turn out, that's the trajectory Our world is more complicated and increased trade rules will continue to apply. Dave: Well, I'm glad you brought that up, because for the listener who's thinking, well, yeah, this is kind of a problem now, but I'm sure it's just temporary. If the right person wins the election, then this is going to go away. So thank you for saying that, that they need to get that naive thought out of their mind, right, it's only going to increase. Susanne: It's continuing. Dave: Yes, yeah, and so it sounds like the real takeaway is the the company companies involved in international trade should just accept that and expect the increase in it and just basically be prepared for that. Susanne: And for business it's always a cost-benefit analysis right. Dave: Of course, of course. Susanne: And the cost will not go away. Dave: Exactly Yep, no, that makes sense. Cost will not go away. Exactly Yep, no, that makes sense. So the last question. So this is the tougher one, and it's okay if you need to take a bit to think about it. So if you could go back in time and give advice to your 25-year-old self, what advice might you give to yourself? Susanne: When the 25-year-old myself was mostly interested always in international trade but I was interested in outbound transactions doing joint ventures in. Brazil, in Russia, in travel and really being in private practice in Pittsburgh. That turned out to be a bad business plan Because if I did my job well, like I said, I would find the perfect match in those countries to tend to the client and I might continue having a supervisory role or occasionally advise the client. But if it was the perfect match, even that would start being less and less. So, yes, the more focusing on the inbound transaction is, the better business. Dave: Okay, so you would have. The advice you'd give is focus more on that import transactions earlier, sooner than later. Susanne: That's right. And on export transactions dealing with US companies. But don't expect on the outbound side to continue to do the work if they form a company, if they outside of the United States and it's logical, very logical, but the 25 year old me did not see that sure, and what about? Dave: and what about, like on a maybe a more personal perspective advice you might give yourself of just you know kind of lessons you've learned more on the personal side? You know work, more work, less travel more. Travel, less eat, eat more desserts, eat less desserts. Any advice you you'd have for your 25-year-old self personally? Susanne: The advice is you need a good team. Dave: Okay. Susanne: You just need a good team and pay attention to building that team, and it also you alluded to it balance of life kind of situations One person can't do it all. It's the team that performs. Dave: Understood Well that is really great advice. Well, Susanne, this has really been fun for me, and I've learned so much about import items that I didn't know anything about, so I really appreciate your time and I hope you have a great afternoon. Susanne: Well, thank you, David, you too. Special Guest: Susanne Cook.

In today's episode of the IC-DISC show, we had Scott Abels on the show to discuss his work as the owner of Precision Valuation Services. Scott has been in the business valuation game for over a decade and has helped over a hundred companies with business valuations. He fills us in on his two-part strategy for boosting a business's value. First, Scott runs the numbers to give owners an accurate picture of where they stand today. Then, he guides them through personalized steps to substantially increase that worth over time. Beyond the valuation nuts and bolts, we also dig into Scott's role as a business coach. How he really takes the time to understand each client's unique situation and goals. Plus, Scott keeps things straightforward with transparent, flat fees. All in all, If you want to learn how assessing and growing your business from the inside out can pay off big time, give it a listen.   SHOW HIGHLIGHTS Scott Abels specializes in business valuations and operates Precision Valuation Services, aiming to increase a company's value through a two-step process. We discuss Scott's expertise in conducting over a hundred business valuations and his 13 years of experience in the field. Scott's approach involves a formal valuation to determine current business worth followed by a strategic process to enhance that value. We cover Scott's background as a CFO and how it provides a unique perspective on business valuation compared to traditional CPA views. Scott shares real-life examples, such as identifying profit leakage due to incorrect pricing and over-delivering on customer service. Scott details how a comprehensive valuation and growth coaching can help businesses plan for a more profitable future and prepare for potential exit strategies. We explore the value of Scott's flat fee structure for his services, which helps eliminate surprises and empowers clients financially. Scott offers an initial consultation to deeply understand client needs and is willing to invest his own time to assess the potential to help them. Scott is open to answering listener questions about his services and expresses a strong passion for helping entrepreneurs grow their businesses. We highlight the joy of working with business entrepreneurs and the fulfillment that comes from helping them succeed and contribute to economic growth. LINKSShow Notes Be a Guest About IC-DISC Alliance About Precision Value Services GUEST Scott AbelsAbout Scott TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, my name is David Spray and welcome to another episode of the ICDisc Show. My guest today is Scott Abels. Scott owns a company called Precision Valuation Services and they work with privately held entrepreneurial companies who are wanting to increase the value of their organization. Scott does it with a two-step approach. The first is he does a formal valuation to see what the current value of the business is, and then he has a process that he takes his clients through to help them increase their enterprise value. It was an interesting conversation. Scott's got a great background and he's laser focused on helping entrepreneurs be even more valuable and have more valuable companies. Good morning Scott. Welcome to the podcast. Good morning Dave. It's good to be with you. So are you in the mountains somewhere or are you here in Texas somewhere? Scott: No, I'm just bragging about my summer trip to the Smoky Mountains. Here as the background, I'm talking to you from Flugerville, Texas which is just outside of Austin. Dave: Awesome. Well, I'm glad that you could make it. So let's get right to it. You are. I believe you call yourself, or some of your clients call you, a enterprise growth coach, or did I butcher that description? How do you describe yourself? Scott: Yes, the growth coach. That's exactly how I describe it. And what does that? Dave: mean, do you help them, like go to the gym and lift weights and get bigger and stronger, or is there something different? Scott: Well, it's kind of lifting weights for your business. Is that maybe a way to finish that analogy? So what I try to do is to help business owners first of all figure out what their business is worth today and then figure out how to make it worth more in the future. And this is especially helpful, as you can imagine, for a business owner who is maybe planning to exit his business. You know, eight or 10 years, whatever down the road, that's going to be his retirement, and so he knows what he wants his retirement income stream to look like. But maybe it's not quite there today, Maybe the value of his business is not quite where he needs it to be. And so the growth coach program is to help business owners like that or any other business owner who just wants to take his business today and grow it and make it more valuable in the future. Dave: Okay, and is it a whole comprehensive program, or can they just start by having you do the valuation first and see where it goes from there? Scott: Yes, dave, usually where we start is with the valuation to see where the business owner is today, and then the growth coach program is done on a month by month basis, but there is a structure to it where we walk the business owner through working on the key drivers of their business that drive value, that either improve value or that help to eliminate negative value, if you will. So it really is done on a month by month basis. It's not a long-term commitment or anything like that, and I find, dave, that really puts the focus on me helping them to achieve results quickly. So if they're not seeing the results that they want, they don't have to continue with the program. But it is very helpful and it definitely helps business owners to get to where they want to be Okay. Dave: And so if they want to just start with the valuation and then go from there, they can right. Scott: Yes, and actually a lot of clients do come to me for the valuation first for various reasons. It could be to buy or sell their business, it could be to transfer shares of interest to family members or to key employees. It could be for any variety of reasons, and often what happens is the natural discussion that we have about hey, here's the value of your business, mr Business Owner, and here's a couple of things that I see in your business, using my CFO background, that if we could improve these, your business could be worth even more. And oftentimes then it involves into, it evolves into a growth coach program or a growth coach opportunity. Dave: Okay, and it seems like one of the biggest complaints of that our clients have shared with me when they have the valuation done is that it just seems to take forever. They needed the valuation yesterday. They really don't have 60 days to do it, which I understand that 60 days is kind of a normal turnaround time, but do you have any options where you can have, like an expedited turnaround time? Scott: Yes, absolutely, and so I should go back, I think, first Dave, and just also add so my background is really as a CFO, as a leader of a financial leader, a executive of a business division of a larger business, so really in corporate America Dell and Motorola. So my background is kind of unique in that I approach that business valuation from the perspective of a CFO as opposed to the perspective of a CPA, who may be a tax CPA or something. To answer your question, the typical turnaround time you're right for the industry is probably 60 to maybe even 90 days. But we really strive to be able to provide expedited delivery to these business owners because oftentimes there's some kind of an event, there's some kind of a deadline that they have. So I offer pricing that is pressing for a standard valuation with a 45 day delivery timeframe, and then I also offer pricing for expedited delivery as little as two weeks, and of course the prices is more when you need that kind of option, but it is there for the business owners who need it and who are really pressed for time. Dave: Okay, well, that is good to know. Okay, so have you done many valuations? I mean, is it a couple, is it a dozen, is it more than a hundred? I mean, is this your first rodeo at doing this valuation stuff? Scott: Actually, I've done more than a hundred of these things and I've been doing business valuations for about 13 years, when I originally I left corporate America after about 25 years, started my own business and initially I started out as a fractional CFO and I enjoyed that work. What I found was it was very competitive and very price sensitive, very much driven by the price. But I had clients who needed help with business valuation and so I went off and got the CPA credential which is essentially a CPA for business valuators went off and got the credential and started doing business valuations for some of my clients and figured out a couple of things. I really enjoy doing these. The valuation is like a business puzzle and having a CFO's mindset. It just naturally fits with what I enjoy doing, and there's also not nearly as many people who can do these things and do them well. There are some folks who dabble in these, but there's very few folks like myself who do nothing but business valuation. That is solely what I do, so I spend almost 100% of my time working on either business valuation or the growth coach which evolves out of that. Dave: Okay, so what are the characteristics of a company, who you are best positioned to help and add value? You're either kind of revenue size or other characteristics that somebody's listening to this they think, oh, he's describing me. Scott: I need to call Scott, so I would say that the size, the kind of the sweet spot is maybe from two to $10 million, is where I see the revenue yes, that's annual revenue. That's where I see the majority of my clients, but I see some there smaller for sure, and I see a number that are bigger as well. This is for the valuation is usually driven by some kind of a need that the client has and again, like I said, it may be a buy-sell need, it may be a tax-driven need, it could be a divorce, it could be any number of reasons that they need that. So oftentimes it doesn't so much matter even the size of the business if they really have that need to get the business valued and they have to have a third-party valuation. That's what really kind of drives the valuation side of things On the growth coach though what we're really, what we really are most successful there is. As I said, business is probably between two and $10 million generally, but they could be larger and businesses that are maybe doing good today, but they'd like to do even better, and ideally they're looking down the road and saying, hey, my business is $2 million in sales today, but I'd like to get it to $10 or $20 million and more profitable than it is today. How do I do that? And so growth coach is a perfect solution for those types of business owners who maybe they're doing okay, but they'd like to figure out how to do better, especially with an eye towards the future. Dave: Okay, that is helpful. Do you have an example that you could share with someone, either just on the peer valuation side or the growth coach side, somebody who came to you with a challenge and you were able to, you know, add value? Just, I just find personalizing and having stories helps the whole message resonate better. Do you have a success story or two you can share? Scott: Yeah, I've got a couple I've got one on each side there today that I can share. Let's talk about the growth coach side first. So I think about a client recently that has a service business, and they are here. They were here in Austin and it was an established business that was making several million dollars a year. They had a couple of different product lines or service lines, I should say and they had been pretty profitable for a number of years. And just over the last 18 months or so their profitability had just started to dry up and they were doing more revenue than ever. So the business owners came to me and they said hey look, our revenue is growing and we got this new cool service that's really profitable but for whatever reason, we're just not seeing the bottom line profit. Can you help us figure this out? And so by doing some analysis for this business, we were able to quickly help them figure out a couple of things. Number one this new service that they were really touting and trying to sell as much of this as they could. It was not priced. It was actually priced at below break even. Dave: Oh no. Scott: And the reason was because, obviously, the business owners are not cost accountants, so they figured out what the direct costs were that were related, you know, the technicians and their time, but they didn't factor in any of the overhead or some of the other indirect costs, and it was a pretty significant amount that they were missing, and so they weren't fully collecting the you know the fully burdened cost for this service. And so the answer and they're busy bidding these projects as fast as they can, and so the answer was really very simple. For that we were able to calculate a new, better hourly rate. They would bid these projects based on the number of hours and an average hourly rate. We were just able to say, hey look, your hourly rate was X, and so you need to add this much to it, and if you do, then you're going to be profitable again. The second thing that they had going on, though, was on the other revenue stream, the old revenue stream. They had one customer that was pretty big part of that, and this was their quote, unquote their great customer, you know their cornerstone customer, and what I found out is I did the analysis was I found out that they were selling this customer a certain level of service, maybe here, but the actual service they were providing was way up here and as you talk to the actual technicians and the folks who served that customer, you realize that the customer is getting whatever you want to call it deluxe level service, but they were paying for standard level service. So this customer is really not profitable at all. Dave: No wonder the customer, no wonder the customer loved them so much, no wonder they're their favorite, most happy customer. Scott: So I was able to show them, you know, that this customer was really not again, was not profitable, and they thought this was their poster boy, if you will, customer. And this had just happened over time. Is what we noticed, dave, was that over time, you know, the technicians or the folks who serve these customers had just kind of been, you know, just generously adding in a little bit of this and a little bit of that, a little bit more of my time, and so over time, this customer really evolved into an unprofitable account. So the combination of those two things made a huge difference for this business and they quickly found their profitability again, even better than it was before, and as they were growing, you know, their profits really accelerated quickly. So that's an example on the growth coach side of things. Dave: That's great, I can give you one on the valuation side please. Scott: This was a lot quicker. So I had a client who the client was the I guess it was the surviving children. The father had owned a business interest it was like a 1.9% interest in a successful electronics business there in Houston, and so the father had passed away and the children were just simply trying to liquidate his interest so that they could just divide his estate up and close out the estate. Well, the business had some super high-powered attorneys I think it was Vincent and Elkins actually was their attorneys and they came back to this family with a value for that interest of like $40,000. That's what they wanted to pay him. And so the family said, okay, well, if that's what it is. And so luckily, their attorney talked them into getting evaluation and what I found very quickly was the value that business interest was over $400,000. So it was a 10x difference in value. Dave: Maybe it was an honest mistake. Maybe they just forgot a zero. You know those honest mistakes never seem to be to the benefit of the person not making the honest mistake. Scott: Well, I'm not going to say that there was ill will, there was negative will there on the side of the business, but I will say that the difference was huge and for the cost of evaluation, for a few thousand dollars, they were able to realize a 10x return on that, which was a fair return in the first place. So you know, stories like that are there especially make you feel really good when you're able to really help people that they wouldn't have been able to do this on their own. Dave: Sure, yeah, those are two great examples. I like that. That first example their most profitable line and their most profitable customer that they're so excited about, turned out to be not their most profitable customer and not their most profitable service line. Scott: Yeah, and you know, dave, the thing that I find in working with business owners is, like I said, that unprofitable customer evolved over a number of years so that customer started out being their best customer. Maybe they're only customer, I don't know, but over the years it just the pricing and the service, the way that they provided the service, just got a little sloppy. And a lot of businesses that I see don't have a lot of discipline in the way that they price their services. They priced it at whatever it was priced at 10 years ago when they made it up, and plus 10% or something. But they haven't taken the time, maybe lately to go through there and really say, okay, what should it be priced at today? Is it at a reasonable price or not? And maybe if their bottom line is positive, relatively positive, they may feel like it's that it's where it needs to be. But a lot of times when you do that kind of analysis around pricing which is one of the things that we would do in the growth coach program you may find areas of opportunity there that they didn't even know existed. Dave: So it sounds. I hear your enthusiasm and passion for this work. What is it about this? You know, just aside from the dollars and cents, did you find so satisfying about serving these clients? Scott: Well, I like I may have said this earlier to me this is a business puzzle and I just enjoy the challenge of being able to unravel what may seem like a really complicated thing to the business owner, but to unravel it for them, to explain to them what's going on and then to help them, to help them to be better off at the end of the day. And so part of it is just, intellectually, I enjoy the challenge of these, of the business puzzle, if you will. And secondly, it's just it's nice to be able to to walk away from helping a client knowing that you've done something for them that is added value, that they're ecstatic about, that they couldn't have done for themselves. And so, just like you and I, would go to a specialist for whatever it is that we might be doing, business valuation for a lot of people is a specialization that they really need. They need somebody on their side, somebody to help them understand this stuff, and I just enjoy doing that. Dave: Yeah, that really resonates with me because that's how our business is, that, yeah, we add value. But the part I find most satisfying is just the sense that you've made a difference, you've helped. And, of course, my heroes are entrepreneurs. So the fact I get to work with entrepreneurs all day is I find to be just very satisfying that I feel like I'm helping the heroes of the economy. You know, just do a little bit to help them, be a little better at it. Scott: Yeah, let me add. I want to add on that too, dave, I completely with you on that. You know, having spent 25 years the majority of my career really in corporate America, I saw some really sharp people and some hardworking people. But I can tell you now, having spent 13 years with business entrepreneurs, people who they don't get a paycheck from some company on a, you know, bi-weekly basis, they have to go out and do it themselves, and I can't tell you how enjoyable it is to work with these types of people. They're usually, they're usually intelligent or they're, you know, studious people. They're driven and passionate about what they do. They're very positive and upbeat people and it just feels like a good crowd to hang with. Right, I mean, it's a positive, uplifting experience working for these clients, as opposed to, you know, working in a post office or something like that. Dave: Right, yeah, just being a cog. Scott: Exactly, I can really understand your point about working with these entrepreneurs and just how, how enjoyable it is. You know, it's just good to work with people like that. 0:19:01 - Dave: Yeah, and I think, if I'm correct, I think the data shows that the vast majority of new jobs in this country come from those smaller entrepreneurial companies. It's not the Fortune 500 companies that are creating the net jobs, and I hesitate to think that an additional government job is progress towards anything. Scott: Yeah, agreed. Dave: So what's the best way? If somebody wants to reach out to you, can they reach out on LinkedIn? Is that a good way to? Scott: LinkedIn is a great way. I've got all my email and the phone numbers and things on there on email on LinkedIn, on my profile page. That's probably the easiest way. I've also got a website that they could visit precisioncfosolutionscom, and that's, like I said, linkedin is probably the easiest way to reach out to me. Dave: If they just want to cut to the chase and just give you a call, what's the number they should call? Scott: 5.30 and that's my cell number. It comes directly to me, okay. Dave: Now, if somebody calls you, though, do they need to be careful that the clock's going to start ticking after the first minute and they're going to get a big bill for you if they only talk to you for half an hour? Scott: 45 minutes, no, and that's another pet peeve of mine, Dave. I think you and I may be on the same page on this one too. I don't charge for the initial consultation and, frankly, I don't charge the client until we both agree on the scope of work, whatever that is, and we both agree that we want to do it. And oftentimes that means that I have invested some of my time already to get there. Things like an initial phone call just to understand whether or not I can even help them with what they've got, or whether we need to maybe refer them to someone else if I can't. Things like initially looking at their financials. So oftentimes, to figure out the fee structure for the particular client, I need to see what the financials are and ask a few questions about what's going on there, how complex is the business entities and that sort of thing, and I don't charge the clients for that. So the other thing that I really I think is really beneficial to my clients as well is everything we do is based on a flat fee Okay what the fee is going to be, and it will never be more than that. It may be less than that, but it will never be more, and I think this really empowers the client because they know what they're going to spend. It's not going to be a penny more unless we both agree that we want to add something to the scope of the work. But otherwise I believe the flat fee structure really empowers the client, gives them a good feeling that they know what the cost is going to be. The other thing is it does. Is it really? Again, I think it incentivizes me to get my work done as efficiently as I can. But ultimately, like your original question, there's going to be there'll be a fair amount of conversation I may have with these clients before we ever even talk about what the fees are and the fee actually starts Okay. Dave: And if you're anything like me, that's probably your. Maybe the favorite part of your day is getting a phone call from somebody out of the blue that starts with hey Sunso, gave me your name. They said you might be able to help me. All right, don't you love those calls because you're like what's going on? Tell me what's up, what's the story, drill down, figure out if you can help them or not. Scott: Yeah, exactly Exactly. I enjoy getting those kinds of calls and you know, dave, I just tell my clients look, if a 10 minute conversation with me will save you a couple of hours trying to figure it out on your own, I'm happy to do that. Whether it's on the front end of engagement, whether it's on the back end of an engagement later on, or whether it's a client that I'm not even going to do work for, I'm happy to give a few minutes of my time because I think it. Number one, I just enjoy being able to help people solve problems and number two, you know, as we know, it all you know evens out. In the end it all kind of pays, pays itself forward. I think when you do the right thing for the clients, they can't wait to tell their friends hey, this guy did this for me and he didn't even charge, you know. And ultimately, you and I are looking for happy clients who get what they need done. Dave: Yep, I agree. Well, as we're around in the home stretch, I've got a couple of questions for you that I'm hoping will be a little bit curveball likes. I'm hoping to kind of put you on the hot seat. All right, go. So the first one. It's real simple, it's one sentence. I'm not going to clarify what I mean. You just have to give me your gut answer. Okay, tax max or barbecue? Scott: That is really close. I'd say tax max. But barbecue is probably 1B, so yeah, tax max. That's where I usually go for on the weekends. Dave: The best answer I received to that question. I'm going to get who it was and they said it depends. If I know it's going to be like top 10 percentile barbecue, I'll take the barbecue. If I know it's just going to be average, I'll take the Mexican food, because the tax max has more tolerance for imperfection. Would have to agree with that. Scott: It sounds like an engineer's answer to me. Dave: I mean a tough old piece of brisket. That's like chewing an old piece of leather. Scott: I mean no matter how tasty it is. Dave: it's not a great experience, but, heck, I can go to Taco Bell and make do right, if I'm hungry. It doesn't have to be world class, okay well, that one was pretty easy. This one's a little tougher. This one may make you think so. If you had a time machine and you could go back in time and give advice to your 25 year old self with the knowledge that you've had over the last you know, few decades, what advice might you give to yourself? You? Scott: know I get to do that, something similar to that, with my kids who are of that age now. The advice I would give to myself is I would have started my own business much sooner, when I was younger, you know, before I had kids to provide for and such. Start early building the value of that business. Whatever it is, you're going to learn so much from that. You may fail along the way You're going to learn, but you're going to learn a tremendous amount and by the time you get to be our age now, the benefits of that would just pay off dramatically. I think my background in corporate America is really good, but a background as a business owner, I think, is it cannot be matched. If you want to do the things like you and I, you want to run your own business and ultimately, if you want to generate wealth. You need to own your own business right Because if you're working for somebody else you're generating wealth for them, and then you have an income stream that will end when you stop working. And if you own a business, you have generated wealth and you have other options. You can. You know you could sell that business if you want and take the equity you built. But yeah, I would. That's what I would do. I would have started my own business much sooner and learned the ropes. Dave: That is probably the most common answer to that question oh, interesting, yeah, they had struck out on their own sooner. Well, I think we've covered a fair amount. Is there anything that we didn't talk about that you think we should talk about? Anything that you think we should have? Scott: I think we've covered. I think we've covered most everything and I appreciate you having me, having me on the podcast with you here, and I would love to you know, to help any of your listeners If they've got questions, however big or small, I'd love to be able to help them with that or point them in the right direction. So thank you so much for having me and my pleasure, I enjoyed it. Dave: My pleasure. I appreciate you carving time out of your day and I hope you hope the rest of your day is great and I'll look forward to catching up with you another time. Thank you, Dave. Thanks for having me All right. Special Guest: Scott Abels.

In today's episode of the IC-DISC show, I spoke with Geoff Bruskin of White Tiger Connections. Geoff provided his unique perspective on how a martial arts background influenced his visionary approach to accounting. He emphasized niche specialization as a winning strategy and offered case studies on recruiting and M&A success stories. Geoff also addressed the talent crisis through remote hiring. Additionally, the discussion delved into the evolving landscape of accounting firm acquisitions and metrics key for private equity interest. Lastly, Geoff highlighted critical steps for transitioning to remote operations, leveraging outsourcing to boost efficiency, and preparing firms for future selling opportunities.     SHOW HIGHLIGHTS In this episode, I interviewed Geoff Bruskin, founder of White Tiger Connections, who shared his insights on niche specialization in the public accounting sector and how his martial arts background influenced his business approach. Geoff discussed the current talent crisis in accounting and highlighted remote hiring as a strategic solution, offering case studies to illustrate successful recruiting and M&A projects. We explored the four main types of buyers in accounting firm acquisitions: small accounting firms, regional or national firms, financial services firms, and private equity buyers, along with key metrics like EBITDA and gross revenue that attract private equity interest. Geoff emphasized the importance of transitioning to a remote client model to make accounting firms more appealing to potential buyers and discussed the benefits of training clients in remote interactions. We talked about outsourcing high-volume, low-value tasks to international teams to enhance efficiency and allow domestic talent to focus on more complex and high-value work. Geoff shared a case study of a rural firm struggling with debt due to hiring challenges and inefficiencies, suggesting an overseas model for high-volume work to improve financial health. We discussed the synergy between accounting and financial services firms, especially in light of the significant wealth transfer occurring as baby boomers retire. Geoff invited listeners to explore networking opportunities with White Tiger Connections, directing them to their website and LinkedIn profile for more information. Throughout the episode, Geoff provided actionable strategies for accounting firm owners to navigate acquisitions, improve efficiency, and prepare for a successful future. We concluded the episode with Geoff's insights on how accounting firms can position themselves for growth and potential mergers and acquisitions by adopting innovative operating models.   Contact Details LinkedIn- Geoff Bruskin (https://www.linkedin.com/in/geoff-bruskin-14184865/) LINKSShow Notes Be a Guest About IC-DISC Alliance About White Tiger Connections GUEST Geoff BruskinAbout Geoff TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, my name is David Spray and welcome to another episode of the IC Disc Show. My guest today is Geoff Ruskin, the founder of White Tiger Connections, and he has a really interesting business in that he's hyper-focused on serving mid-market CPA firms in three ways recruiting, mergers and acquisitions work and other consulting. This was a broad ranging conversation and he had some interesting client stories of success and other outcomes with a variety of different CPA firms. So if you manage a CPA firm or own a CPA firm, this is a really interesting interview and there's a lot to take away from it. And even if you don't. If you use the services of a CPA firm, there's probably some interesting things to keep in mind from the customer side, so I hope you enjoy this episode as much as I did. Hi, Geoff, welcome to the podcast. Geoff: Thanks, David, glad to be here with you. Dave: Yeah, it's my pleasure. So where are you calling into from today? Geoff: I am in Long Island, new York, right in the heart of Nassau County, east of Brooklyn, in a little town called Massapequa. Dave: Okay, I've actually been to Long Island visiting some potential clients at the, I think, the far near the Eastern tip. Geoff: Yeah, the island's a great place. It's got something for everybody. The traffic is terrible, as it is around any major Metro. It used to be that if you were reverse commuting into the city from the Island it was fine, but now everywhere is congested. But I take that as a good sign. People like living here. Dave: Yeah, I would agree. Now, are you a native of Long Island? Geoff: From Connecticut originally and found my way to Long Island when my wife and two kids and I were looking for a place to call home. Dave: Oh, that's awesome. So tell me about your company. I see you're involved in several things, but let's talk about White Tiger. So where did the name come from? What do you? Geoff: guys do. How did it get started? Tiger style martial arts. It saved my life on more than one occasion. That's a story for another day. But as a way of showing respect to everything I had learned in the martial arts, which is not only things which are self-defense oriented, but definitely things that one can use in the boardroom as well, decided to name the company after the tiger style. And so what we do? So we are, as of today, january 16, 2024, we're about a four and a half year old company, founded in August of 2019, right before COVID started, and we do pretty much everything for public accounting firms except for public accounting. Okay, accounting Found our way into this space from the recruiting ecosystem. So my background is I did executive recruiting for venture and private equity-backed tech companies when I started my career and started my firm, as I said, four and a half years ago, and we started off as just a recruiting firm doing mostly middle market recruiting David for financial services and tech companies. And very shortly after founding, I was blessed to be introduced to Emeritus PWC guy who, in his retirement, was doing strategy work for $100 million public accounting firms. So companies like Marks Paneth, which was recently acquired by CBiz, friedman, which was recently acquired by Markham Anshin Block and Anshin PKF O'Connor Davies. These were really prestigious nine-figure public accounting firms in the New York metro area and he did two things for these clients. He did executive recruitment for them and he also did mergers and acquisitions for them. And so I came in with him to help him with his partner level recruiting projects for those large accounting firms and I got to ride shotgun to him on some very cool M&A projects learn how to do diligence, learn how to do integration, learn what not to do, and there are plenty of things that we should all avoid in an M&A capacity. And I haven't looked back. So that mentor of mine he retired to Israel. He's safe and sound in Tel Aviv today, and my business partner and I she's in Georgia, I'm here in New York we decided we wanted to be subject matter experts in accounting and we haven't looked back so just a few short years ago. But we've built a pretty formidable practice doing recruiting and M&A and consulting for accounting firms in the last three years. Dave: Okay, well, thank you. That's a great, a great overview and I love the niche focus right. So many you know search firms. You ask them, you know what specialization they have, and they're like oh no, we do everything. Any industry, secretaries to CEO of a fortune 10 company, we just do it all. Just call us with anything, which means you call them with nothing. Geoff: I like the niche it's. You know I can appreciate the diversity because you want to. You know, I guess for me personally, I never want to get bored. I always want to stay stimulated and having fun. But all people are different. So I might talk to 10 or 15 accounting firm owners a day, which we usually do, and every single one of those conversations is vastly different. So I have a lot of fun with it. Dave: That's awesome. So myself and my listeners love case studies. So can we go through two or three examples? And I understand if you'll need to keep the names anonymous, but let's through these case studies, let's give examples of the type of projects you all are really well positioned to take on. Sure. Geoff: So I'll start with a recruiting project and then I'll go to two M&A projects and then we'll talk, maybe just briefly, about consulting at the end. So there's a lot of talk about the talent crisis in accounting today. That's a really big thing. One of the mechanisms that I've seen a lot of success in is hiring remote employees. It doesn't mean that in-office staff is a thing of the past, but I think that business owners, accountants in particular, because there are simply not enough accountants in the sector. I've read statistics like 80% of CPAs are retiring by 2031. I don't know if I believe that. I think that's maybe a little far-fetched, but needless to say, there are not enough young people to do the mid-level work and there are not enough college people to do the low-level work and there are not enough hungry and competent middle-aged people to do the higher work. So we have to be creative. So a lot of my clients will say, well, it sounds great, but it can't be done. And I have one client which is an example of the opposite. They're about a 50 person firm based in a major metro area. They exclusively do tax work for ultra high net worth individuals. So personal tax, no entity tax on families that have more than nine figures in wealth. They are a 100% remote company. Dave: And I love the niche. I love the niche focus. Geoff: Totally niche focused, yeah, which I think you know is great, and I don't think it's required that accounting firms be totally niche, but it certainly helps, right, and you know that's another topic. But but so we, you know we were engaged by them to find them a strong manager, senior manager who had experience working with clients at that level in a tax capacity and had the cultural gravitas that they could be a self-starter, which is necessary in a remote environment. You can't have somebody who is not motivated, not self-motivated. So, and it took us about 90 days and we found a phenomenal person on the opposite coast who, seven months later, is still very happy, and I know that they're happy and the client is happy because they engaged us for a second project a couple of weeks ago. Dave: That's awesome. Geoff: So, so that's great so. Dave: I'm just curious about that project. Sure, so, being on opposite coasts, does the person ever meet in person with the team, or is it always been remote? Did they come to New York to interview or to the East Coast to interview? Geoff: So I think that I think they do a once annual offsite, but there was no in-person interviewing at all. I have to say I think their interviewing process is something that other firms should follow. It was so crisp and neat. They had people subordinates of this person, contemporaries of this person and seniors of this person, as well as HR interviewing them in 20 to 25 minute blocks and 60 to 90 minute meetings and it was just so crisp and it left the candidate feeling really taken care of and, like this firm, had their act together and a lot of candidates are repelled from accounting firms because it can feel very chaotic process, which I understand. You're managing internal stakeholders, your own concerns, but this firm just did a phenomenal job. Dave: That is awesome. Offline, I may want to get an introduction from you to this firm, because many of our clients would fall into that category for this, and I'm not really aware of another firm that has that, that has that focus, so so that's really. That's really interesting because it's. I heard somebody to say that Zoom is not a communications platform. It's a transportation alternative platform the way to travel anywhere in the world from without leaving your desk. Geoff: And you know, within a few years. And this we're not talking about technology, but you know, beam me up, scotty the. You know the Star Trek program, you know it's. You know it's a slow walk to our craziest imagination. So you know, I have conversations regularly with guys and gals who are in their seventies and talk about how their father or mother retired from the business, when usually it's father, you know, in the 19,. You know, whatever the invention of the calculator, even you know computer, but the calculator, so you know it's. We're going through leaps and bounds of change. I think the change is happening faster than it's ever happened. And you know, innovator or perish is the truth. Dave: Sure, I remember when I started Arthur Anderson in Houston in 1987, that there were partners there who remembered when it was mandatory to wear a hat to work, Like when you think about movies from like the thirties, forties, 50s men, that was just part of their attire. Right, it's part of the suit, and if they're in a tuxedo then they had, you know, a more formal hat. But like, have you ever seen the show? Leave it to Beaver. The father would come home. he would, you know, always take the hat off and hang it up, so it's interesting just to see you know the changes and so, yeah, so that is interesting, okay, so that's on the recruiting front. Let's talk about. Let's talk about some of the M&A stuff. M&a always sounds sexier than recruiting, so it does and it's David it's. Geoff: It sounds sexier. It seldom is so I. So first I'll share with you kind of a war story and then I'll share with you one which is probably about as sexy as it sounds. So one of the major things that my firm does now is there's a lot of non-accounting buyers of accounting firms. Yeah, I've heard that. So we certainly. So. I guess there's kind of four classifications for buyers. One would be the small accounting firm buying an even smaller accounting firm. One would be the regional or national accounting firm buying a smaller accounting firm. Then you have the financial services firm buying an accounting firm, which has really emerged onto the scene in a very big way in the last 12 months, and I think we're going to continue to see velocity there, and it's a topic that I'm fascinated with and would love to talk more about it. And then the fourth is more of the private equity buyer, and a lot of firms are too small to really, or, too, you have to either be a certain level of size and a certain level of niche to draw interest from the private equity buyer Typical. Dave: Let me just interrupt. What's a typical size or metric in either partner count or revenue size to have interest from a PE buyer? Geoff: It's much more driven by EBITDA and gross revenue secondarily than it is partner account or staff operating model of the firm. I mean a lot of people will say 3 million in EBITDA is the number. I think it's a little less than that. The reason why that number is considered market standard is because below that number in free cash flow, the burden of replacing the C-level people who may or may not be retiring, as well as other critical people in the organization, engaging consultants and vendors to backfill it makes the unpredictability of what you're buying too risk-heavy if you don't have enough freestanding cash to justify whatever changes could be necessary. If things go belly up for the buyer and then gross top line and this is more of an objective comment we like to see firms that are kind of a healthy class of firms or doing north of 40% EBITDA. 30 to 40 is considered moderate, acceptable to a lot of buyers for sure. And then you know less than 30% EBITDA and you know it's considered that you have room for improvement Doesn't mean nobody will buy your practice. A lot of people buy houses that need some work. It just you know kind of at the objective level how the market is looked at. Financial services are very interested in as you can Clients probably. Well, very interested in the clients tax-driven firms, I was going to say because the clients exactly to your point. There's a significant cross and upselling opportunity for them. It's not that they're opposed always to accounting work, cfo work, bookkeeping, entity work, but in financial services firms can sell employee benefit plans, they can sell all kinds of vehicles that are beneficial to an entity and if you have CFO level relationship, great. But the main vehicle for driving revenue to most financial services firms, at least that I've worked with successfully, is their asset management capability. And one of the reasons it's sexy not only for the buyer but for the seller as well to consider if you have a tax driven practice, to consider selling to a financial services firm, is because we're in the largest wealth transfer in history, as all of the baby boomers in all categories are preparing to exit trillions of dollars to their dependent, excuse me, to their heirs. The four or fifth generation family office client that you're working with may not have a successor and if your clients are planning a liquidity event, you, as the person with all of that relationship equity, mr Accountant has the opportunity to participate in some of your clients' liquid assets being managed by your financial advisory buyer and there's some nuances legally to how you can collect on that, but they are surmountable nuances. So there's a lot of synergy, especially if you have clients who are impending an exit or are on the higher net worth side for partnering with a financial advisory firm in an M&A capacity. And that is actually the first scenario I want to talk about, david. So I have a financial advisory client in the Northeast Like traditional financial advisory, AUM driven, comprehensive wealth management. Exactly, they're a four partnerpartner consortium inside of a four-advisor RIA. Okay and phenomenal culture, really nice guys. And they had tapped a young guy who was working on a trading desk for them to go and get his CPA license. So this young guy, at the age of 29, is a CPA. He's built organically a $100,000, $150,000 book of tax business, both individuals and entities nothing crazy. Very smart, very motivated. And they were looking for a practice for him to acquire so that with them, participate in the acquisition, help him fund it and obviously the channel opportunity on both sides. So we found I found a firm, my firm found a firm with a little less than a million in revenue. It was, it's in a very affluent town in the Northeast and perfect synergy. Owners. Retiring made a lot of sense. Younger partner was at this firm as well. Retiring made a lot of sense. Younger partner was at this firm as well and you know the younger partner was not going to be the successor to the older guy was more of a back office person than a radio worker, if you will, very competent, but back office and it was perfect. And six to eight months later, just a few of the hiccups that occurred, the young guy when we once we started conversations and it got real to him that in his mid-30s he would be going through a transfer of some kind, he left the accounting firm and took the largest client with him and did that because he actually went in-house. He joined them and it's a name that everybody listening to this podcast will know, and I will, of course, and it's a name that everybody listening to this podcast will know and I will, of course, not breach confidentiality and share it. But you know, mega client, you know, perhaps a good career move for him, perhaps not. The younger guy Totally convoluted the situation and it just made a lot of other hairy bats come out of the bag. But as of last Friday, that deal finally closed half the size of what we thought it was going to be. And you know, I guess, bragging about myself for a minute, one of the things that I do that's a little different than other brokers in the market, david is I am a neutral referee to these transactions. Brokers will either just represent the buyer or the seller. My firm represents both parties. We take half of our fee from both parties. Interesting, and we do that because we in accounting and accounting, m&a specifically unlike, say, real estate or manufacturing, where you have very hard asset driven purchases what someone is buying in accounting is an intangible asset. They're buying a book of relationships, perception of. There's nothing tying the client to your firm except for goodwill. Because of that, in traditional transactions the seller is expected in the open market to bear the majority of the burden on M&A. Dave: Yeah, it's usually done on more like an earn out type basis and tied to collection. Geoff: So, with that in mind, it's really important that you know, in my opinion, if I was selling a firm, I would want an advisor, a broker, whatever you want to call it who whose success was tied to my success. So not only do we take half of our fee from each party, david we take, we take our fee pro rata as the seller is being exited. So unless the seller receives their maximum earn out, we don't get our payment. Dave: I see Interesting, so it also motivates you to hang around after the transaction closes. Geoff: Yes, sir, we are, and there's no consulting fee associated with that. That's part of you know. We really look at ourselves as advisors and we try to put ourselves in the shoes of you accountants, who you know. Everybody wants a slice of the pie, right? You guys get hit up by bankers, by lawyers, by financial advisors, by consultants, because you've got great relationships with your clients. So I guess it's our way of saying you know, we don't want to treat you like everybody else does. We want to be, you know, very motivated by your success rather than you know just what you can give to us. Dave: That makes sense. Wow, I've got so many follow-up questions, so one was I was curious about. You know, when I came into the profession the normal rule of thumb was when it came to profits they called it the one-third, one-third, one-third model that you've probably heard of, where a third of the revenue goes to pay the staff to have the work done, a third goes to pay overhead and a third goes to profit. And my friends that I have in public accounting, my sense is that for a lot of firms that's drifted down from a 33% EBITDA to more like 25%. And then the other thing was it was a third, a third, a third, and then an average firm was worth one times revenues or three times EBITDA. I mean, it was just nice, easy rule of thumb. So you've answered my first question that apparently some of the folks I know that are partners in CPA firms maybe they're not in the top quintile in performance by their peer group, if you know of firms that are approaching 40% EBITDA margins. So that's the first thing. And then the second is what are the multiples then? Typically, what are the ranges, either on an EBITDA or gross revenue? Geoff: So I'm going to try to answer the question in a gigantic circle that adds the most value to your network Perfect, perfect. Dave: I like it when guests take my clumsy question and go ahead and answer the question I meant to ask. Not at all. No, it's all right, so go ahead. Geoff: Thank you. So the first thing is, if you are planning to sell your firm in the next decade and a lot of people won't like what I'm about to say, but it is the truth the very first thing that you should do right now, today, is you should start thinking about making your firm as remote as possible. Now, what do I mean by that? I don't mean you have to take all your in-office employees and let them work remotely. What I really mean is about your client's behavior. If you have clients who are coming in to meet with you at your office, if you have clients that are physically dropping off paperwork unless they are clients that are very niche and very high value to your firm, which is a strong exception to the rule which I am sharing you really should be working towards training your clients into the behavior where they are remote, where they do not need to see you. If they're older and they don't like the computer and they want to mail you all their documents, that's better than them coming into the office to drop it off. Best of all is if they're using a portal. A Zoom meeting, as David and I were saying at the beginning of this call, can go a long way, especially if you're working with an $800 1040, right, if you've got a $10,000 1040, or if you've got something, you've got a lot of K-1s, or you have complex audit work or you have serious CFO work that you do for clients. There's exceptions to this rule, but understand that buyers, if they are not in your backyard, are very seldom going to be interested in purchasing a firm which, from a client perspective, involves a lot of physical collateral. So if you're looking at a sale in the future, the biggest thing that you can do to help yourself down the road is starting to train your clients on remote behavior. The more remote client behavior you have, the more salient your firm is, even if you have a 25 or a 20 or a 15% EBITDA. Dave: So that's the first thing. I like it, and it makes so much sense I can understand it. Yeah, so it makes all the sense in the world, okay. So you're saying, even if you sacrificed EBITDA to get to that point. In the long run, it'll still be more valuable. A 15% EBITDA, totally remote firm is likely more valuable than a 25% EBITDA all in person. The employees have to come in the office, the clients have to come into the office. Is that what I'm hearing you say? Geoff: More valuable? Yes, but probably not for the reason you think. The firm that's 25% in EBITDA and 100% in office and its culture is probably going to be valued at zero. It's probably not going to be saleable. You know, unless you're talking about you know, if your firm is $6 million, a million, five of that is EBITDA and it's split between two partners who are taking home $750,000 a year including ad backs and the rest of the staff and the real estate and the technology makes up the four and a half million in spend. I could sell that firm. But if you're saying a $25 million firm is one guy who's running a million dollar book of business and he's taken home 250 a year including everything and his practices. You know, you know he's kind of a slave to his practice. Dave: Yeah, that's not worth anything. Geoff: I can't. I'm going to have a really hard time selling that to anybody. Now, that guy that I just mentioned, that guy that I just mentioned his dream is usually to have me hire someone who wants to sit in his chair. But understand this Number one there are very few talented, young, hungry people in accounting period, let alone somebody who has that profile and wants to inherit your mess. Very politely, I say that honestly, so you know these are things that we can talk about, you know, but I'll always be honest. I never want to hurt anybody's feelings, but I don't want to waste your time either. Dave: Yeah, that's, yeah, that makes a lot of sense. So about the only way that practice is really sellable is if he happens to know a guy in town who has a similar type practice that's maybe a little bigger, that you know, that happens to be, like down the street, similar enough clientele and they basically will take the practice off his hands, you know, make him a partner for a couple years in their firm, as he kind of does his phase out. Short of that there's not even really an exit, is there? Geoff: It's possible. It is possible, but I would say less than a 10% chance and that deal is mostly going to happen. I would say 99% of the 10% of the time that deal happens, david, it happens because the buyer and the seller have a relationship. They're golf buddies, they're cigar buddies, they're drink buddies, their wives are friends the wife being a friend is probably the most powerful, because the deal from the buy side doesn't make sense. If I have a, say, $3 million firm with similar clients but I have enough emotional capacity that I can absorb another million dollars in business, if I'm talking to me right, I'm not going to advise that person to take the practice which is a million dollars of chaos. I'm going to advise that person to let me start helping them develop a remote line of their business and to take something which is going to be massively streamlined. Now let's talk for just a minute about overseas. Everybody is terrified of the overseas conversation when it comes to delivery, especially if you're in a tax business because you have to inform clients that someone out of country will be working on your return. There's a tremendous amount of fear about it. David, in my experience, clients who make the transition lose less than 10% of their clients and the 10% or less of their clients that they use, that they lose are clients who are the 80% of their headache anyway. Now there's a major exception to this rule in my professional opinion, which is you do not outsource work which is complex or high value. If it's over a $1,000, 1040, you don't outsource it. If it's something that's more complex accounting work than simple bookkeeping, you don't outsource it. But if it's high volume, low value work, your valuable domestic people in this talent shortage market should not be working on high volume compliance work in any way, shape or form. Those people should be retrained to be doing management of firms in, let's say, india, for example, to review the work that they do before it goes out the door. It can be done in environments that are equally secure as to here. That's objectively true. I know it scares everybody, but it's true. And the other thing is that it equips a firm to be looking at growth rather than just managing all of the chaos that's happening around them. So a major piece of what I just say, for example, would advise that $3 million firm to do instead of buying the $1 million firm, is if you start to rethink the way that your operating model is conducted, your M&A prospects become much more dynamic. You have more internal capacity. You have the ability to acquire firms that are 100% remote. Today already I can't tell you how many $500,000, a million dollar fully remote firms are on the market in specific niches. And these aren't all people who are retiring. These are some people who don't want to do admin work, hiring and firing. They just want to sell business and serve clients all day. So they're looking to join up with another firm. And then the other thing is if that 3 million firm takes my advice, then he can actually acquire the million dollar book of business where everything's chaotic but it's still essential. Then a part of that acquisition is going to be well, mr $1 million firm, you have to now start training your clients into this behavior anyway, because nobody who I can get my hands on is going to have continuity in the in-person model for their low value clients. It just doesn't make sense. You're actually disrespecting yourself by doing it. You could talk all day about wanting to have a fantastic culture and provide a really warm and fuzzy feeling for your clients, but if you look at your balance sheet excuse me and your P&L, and you see you've got EBITDA. That is not where you want it to be. You shouldn't be sacrificing your well-being for culture, right? Dave: There's a balancing act here and I think we need to be realists about it that is so interesting how well you understand the situation going on in these firms, even though you yourself are not a CPA and, I'm guessing, never spent a day working in a CPA firm. Geoff: I couldn't do it. I couldn't do my simple 1040 to save my life, David. Dave: Understood, understood. So, man, we have really covered a lot. You'd mentioned the final piece, the consulting piece, that you may have an example of that, sure. Geoff: So let's see, I'll tell you. This is a great example. I'll tell you about someone who decided not to work with me recently, saltingside. So this is a lovely woman in a rural part of the country. She runs about a $500,000 firm about a $500,000 firm. And, by the way, my clients predominantly range in size between as low as 100,000 in gross revenue, david, and up to about 10 to 15 million. I have relationships with firms larger than that certainly many of them, but because it's so hard to have advisory level influence at those larger firms, they just see me as totally transactional, which right, making money, but it's not what gets me out of bed every day. So I like the smaller firms because we can have more impact there. Dave: Yeah, I understand. Geoff: So this woman runs a half a million dollar firm and she's in a tremendous amount of debt and the reason that she's in so much debt is because she can't find talent. That she's in so much debt is because she can't find talent. She doesn't like the outsourcing model and the talent that she has found, david has been people who you know. She'll hire them, she'll train them. Maybe they have some experience, maybe they don't, but then she ends up spending more time redoing their work than if she had just done the work herself to begin with. And this cyclical thing which is happening, where she places trust and hope in people and then gets burned, has manifested in her financial situation and she's got a load of debt. It's not insurmountable debt, but if I was to help her, it would take some significant movements on her part. Now her client roster is perfect for implementing this overseas model that we've talked about. She has about a quarter of her practice is high value and three quarters of her practice is really volume. If we look at this with just business lenses on for a second doesn't mean she can't provide the clients with an excellent experience. And Christmas cards, have a holiday party, you know. A summer bash, you know, be in the community with them. But when it comes to the workflow of, you know, 30 to 50 meetings a week this woman is doing in office during tax season, she can't get any of her work done because her clients are explaining the documents that they bring into her that she could be done with in 20 minutes. So what I said to her is what I will do in a consulting capacity is we're going to get into your firm and we're going to dissect everything. How is everything happening now? Where do we want to be from a financial aspect, and how can we get there without alienating the culture of your company? Because, you know, especially in rural geographies, you guys, you actually care about people, which is a lost art in this world. I don't want to. You know, I'm not trying to be soulless about this. I want to respect you and enable you to treat your clients well without it being at your expense. That's the goal here. And at the end of the day, she took the weekend. She spoke to her husband. She said this is a little bit too dramatic for me. I'm, admittedly, a little bit too afraid to do this. I appreciate your candor, but I'm going to have to figure out another way, and I said you know that's fine and I wish you all the best. I'm so glad, david, that we got to that outcome quickly, because where a lot of people would have taken her money or would have led her down a rosy road, I was very honest with her and I think I was understanding as well, but this woman needs someone to be truthful with her. She doesn't need more people to smoke and it is sad. Dave: I mean, it's a really sad story, because if her clients understood how hard she worked and she not only is not making money, she works hard and she's going backwards financially they would like offer to rally around her Right Fees, right, they would, right, they would. So that's the really, and she's stuck. There's really no hope to get out. She's going to probably just work until she has a health issue and that's yeah. That's a sad story. Geoff: And here's and here, you know, let's look at it from the and this is the last thing I'll say here If we look at it from the client's perspective for just a second, you know all of us. I talked to so many accountants who don't like the overseas model, even for their high volume work, and I know I'm talking a lot about volume. It's a very different conversation on the niche side that maybe we'll talk about another day. But just to conclude, the irony is that there are very few firms, when this woman does eventually stop working hopefully by her choice and not because she got sick who will take and now manage these clients at anywhere near I mean even double the fee that this woman is charging. The regional firms are like four or five times this woman's rate is their minimum. Yeah, maybe three times, if you know you'd be told, but you know three times is a minimum. So the irony is this woman's doing right by people there's, but there's nobody else locally who can perform in the same way she can. There's. She has, like one competitor within like a 50 mile, one other accounting firm within a 50 mile radius of where she is. Wow, it's a lot of people, you know, I mean it, where she is? Wow, it's a lot of people, you know, I mean, it's not like a Metro, but it's a lot of people need accounting. So who are all these people going to be serviced by? At the end of the day, h and R block tax, or, you know, it might not be what they were all using. We're all using either AI or overseas workers to have it done anyway and if this woman was doing the right thing, david, where you know, in my opinion, where she was she could provide them essentially with the same service she's providing them now, rather than having them talk to someone over there. They're talking to her, they're interfacing with her, they're interfacing with her managed operation, but she's using this resource, and I lied. I will say one more thing. I am a red-blooded American, I believe in this country. I have very dear people in my life who fought for this country. I am not a veteran. I wish I actually would have rather gone into the military than do college. If I could do it again, I would do it. That way, I would have learned more about the world, which would have benefited me in my 20s. Dave: Sure. Geoff: But I believe that what made this country great in the 50s and 60s and 70s in the wake of World War II was the American spirit and this desire for the layman to move from the lower class into the middle class. It's what gave us all of our gusto as the economy became the strongest in the world. Now, you know, we have a very different environment, but that human spirit is not lost. India is now the fastest growing economy in the world and by no means am I saying I don't want, you know, the United States to remain the main player. I do, I'm, you know, number one USA. But we have to be realists and there's not talent, we have no talent here. So we, you know, anyway, that's my opinion on the topic. Dave: No, that is really good. I cannot believe how the time has flown by. I have just two rapid questions, so give me the the characteristics of a perfect client for you. And I'm going to kind of force you to like really narrow, like you can only pick one. And the reason this matters is because a week from now, when I forget a lot of the details of our conversation, give me the one thing to remember the pain point, because we have hundreds of clients and they all have a CPA firm that we work with. So I know hundreds of CPA firms and most, most of them are in that you know five to $25 million size, so kind of in your sweet spot. So paint a picture for the person who you can best help and would most like to help. Geoff: So I have a prospect. Who's my probably my favorite prospect. He does about 6 million in revenue. He wants to get to 30 million. He's 45 years old. He wants to sell at 60. So the next 10 years his growth plan is 6 million to 30 million. And then he's going to ride the bus for five years. He wants to become an absentee owner, david. He wants to sit on a beach and run the firm from his cell phone and maybe a laptop for an hour or two a day and drink his margaritas and hang out with his family. And his practice is. He has a couple of key niches and he also does some volume work. So him and I are working together in a consulting capacity. We will be in short order. We have a great rapport and, in addition to the consulting work, I'm going to be doing transactional work for him. So hiring people fully remote, domestically, to help with some of these niche areas of growth, who will start off often as managers and ultimately become partners overseeing departments. And we validate that by hiring people, like I talked about with the first example, who have very strong character and are very self-motivated, with a niche pedigree from a larger firm where they weren't treated well, there are people who exist there. You know they're in the single digit percentile, but that's what we specialize in recruiting, finding those people. We'll be doing a strategic M&A for him. We'll be implementing overseas resourcing for him. So that's a client where I get to throw everything that I offer and the kitchen sink at him and it adds value. And the biggest piece of it is that he has one partner who's more of a service partner, less of a strategist and senior partner strategist and senior partner, even though they're 50-50 partners in the firm. He's really you know to hear him talk about it and I believe him, based on our relationship, he's really the driver of the firm and its growth. The biggest thing of all in that situation is our relationship. We have mutual trust for each other because in a retainer capacity, I'm not going to be taking a lot of money from him. You know, my success is his success and that's on recruiting, that's on M&A, that's on growth, top line and bottom line. And then you know I'm incentivized, of course, because 10 years from now, or 10 to 50, I'm going to sell his firm, right, right, I'm going to make millions of dollars selling this firm that I've helped him to grow. Dave: So I love it. I've helped him to grow, so I love it. He sounds like a great client. So, if I could distill what I think the elements are, it's a person, an ambitious person in the middle part of their career who wants to grow both personally and economically and wants you as their key partner over the next 15 years to accomplish that. Geoff: One of them. I mean I'm you know I'm not Jesus Christ David, but I appreciate the you know to be trusted enough to be listened to as one of the people who they take seriously. That's correct, yeah that is awesome. Dave: Well, as we wrap up, Geoff, is there anything that I didn't ask you that you wish I had? Geoff: No, this has really been a pleasure, you know, getting to talk about myself for a minute, so thank you for the opportunity. Dave: My pleasure. If people want to learn more, where should they go? Where are you going to send them to LinkedIn your website. Geoff: Both is fine, so website is whitetigerconnections.com. Geoff Bruskin, or you can find us at White Tiger Connections on LinkedIn too. Dave: Perfect. Well, Geoff this has really been fun. I really am excited about the stuff you're doing, and I think there are some synergies between our practices that I want to continue to explore in the future. So thanks for taking time, and I hope you have a great day. Geoff: Thank, you, you too, and to your listeners, bye-bye.

In today's episode of the IC-DISC show, we welcome Deanna Walker, CEO of Venturity Financial Partners, to discuss the world of outsourced accounting. Deanna reflects on transitioning from banking to leading an accounting firm committed to transparency and team-based client service. We explore Venturity's unique approach to addressing private businesses' administrative and strategic needs. From supporting founder-led ventures to navigating COVID disruptions, Deanna shares insights into competently enhancing clients' capabilities. Our conversation considers the evolving role of CPA firms and the benefits of mentorship in this field. This episode offers not just information but valuable perspectives on outsourcing in today's accounting landscape, enlightening you on the potential strategies and solutions available.     SHOW HIGHLIGHTS I discussed outsourced accounting services with Deanna Walker, CEO of Venturity Financial Partners, exploring their commitment to open book management and "The Great Game of Business" principles. Deanna shared her journey from a decade-long banking career to leading Venturity, highlighting her experiences in business development and the firm's team-based approach. We examined a case study involving a multi-entity dental service organization where Venturity's offshore team significantly improved financial reporting and reduced errors. The conversation included how Venturity supports founder-led companies by maintaining institutional knowledge while enhancing accounting capabilities amid a nationwide shortage of qualified accountants. We delved into the importance of quality work, proactive collaboration, and consistent communication with clients in financial services, emphasizing a team-based approach to outsourcing. Deanna discussed the evolving role of CPA firms in the outsourcing space and the impact of regulations like Sarbanes-Oxley on their services. We explored Venturity's advisory practice, which includes a team of CFOs and COOs providing operational expertise and strategic planning support to clients. Deanna highlighted the significance of mentorship, particularly for women in accounting, and the positive impact of open book management on team engagement and service quality. We addressed the challenges Venturity faced during the COVID-19 pandemic, including capacity issues and the necessity of prioritizing client relationships based on mutual value. The episode concluded with a lighthearted debate on the merits of Texas barbecue versus Tex-Mex cuisine, revealing a shared passion for Tex-Mex.   Contact Details LinkedIn- Deanna C Walker (https://www.linkedin.com/in/deannacwalker/) LINKSShow Notes Be a Guest About IC-DISC Alliance About Venturity Financial Partners GUEST Deanna WalkerAbout Deanna TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hello, this is David Sprey and welcome to another episode of the IC Disc Show. My guest today Deanna Walker, the CEO of Venturity Financial Partners in. Deanna: Dallas. Dave: And Venturity is a outsourced accounting consulting firm and they've also grown into outsourced CFO, coo type work. We had a really great conversation talking about a variety of different things. One of the most interesting is they're committed to open book management and following the framework from the book the Great Game of Business framework from the book the Great Game of Business, and over time they've even gotten to where they are consulting with their clients on implementing open book management and all the benefits to it. So we went into some details there and I asked my standard questions, of course, about what they wish they had known when they were 25. And so it was a really great interview. Deanna has a really great story and we also got into a little bit of UT and A&M rivalry. So it was a fun conversation. I hope you enjoy it. Good morning, deanna. How are you today? Deanna: I'm great, David. How are you? Dave: I am doing great. I have my Yeti Whataburger cup and you'll see it as we talk. Deanna: There we go, let me some Whataburger. Dave: I know. So where are you located today? Deanna: I'm actually in Dallas, Texas. Dave: Okay, great, and I am in Houston, where I typically am. Hey, before we get started, I want to just address something that may cause this to be a very short podcast, so I noticed that you appear to be a proud graduate of Texas A&M University. Is that true? Deanna: Very true Well. Dave: I am a proud graduate of another large Texas State University in Austin. So I just thought, if this is going to be a problem. We should probably, you know get it out of the way right away. Deanna: I don't think it'll be a problem. I've already addressed this similar issue about 30 years ago. My husband went to the University of Texas, so we are divided. And I've got one graduate of there already and is soon to be graduate in May, and I can also probably say I am one of very few individuals, if not the only one, that has graduated with a degree from A&M that has a license plate currently that says hook'em. Dave: Yeah, you better not let too many Aggies hear about that, they may disown you. Deanna: Yeah, no. Well, we also have a text exchange that's called UT3 and a wannabe. So I would say I'm old Southwest Conference because I've got ties to SMU and Arkansas. So that may date me a little bit, but that's how far back I go with our Texas football. Dave: That's. That is awesome. So are you a native Texan then? Deanna: I am Born and raised in San Antonio, okay. Dave: Yeah, I grew up just east of San Antonio, so I know that part of the state. Well, let's get started. Tell me about Venturity Financial Partners. What the heck do you all do? Deanna: Well, we help business owners, CEOs, management teams solve problems that relate to their accounting back office, including the office of the C-suite. The CFO and the COO relate an alternative to becoming an in-house accounting and finance group. Dave: Okay, and where you see that you've been the CEO for a little, while not a long time. What's the background? How did you end up there? Did you start your career there? What's the story? Deanna: Yeah, no good question. I had about a 10-year banking career. So, coming out of A&M, moved to Dallas and worked in the investment banking field and corporate lending, acquisition financing field for about 10 years or so. Took a little bit of a break when my kids were younger and then got introduced to Chris McKee, the founder of Venturity, in 2001. I really fell in love with the business model and the opportunity to, like I said, help business owners, ceo-led teams, really focus on their back office accounting and bring expertise to the table, and so mainly grew up on the side of the business. That was, the business development side of the house. So most recently, before taking over CEO, I was the CRO. Dave: Oh okay, Chief revenue officer. Deanna: Yes. Dave: Okay, so who? What are the characteristics of the companies that you're kind of best suited to to serve then? Deanna: Yeah, Privately held companies really ranging in size from 10 to 500 million in revenue. Companies, like I said, people don't come to us generally because everything is working great in their finance and accounting department. They usually come because they're frustrated, can't get the right teams in place, not comfortable with their information, and so we can bring a lot of that expertise and partner with them. Dave: Okay, and what is that? And how does that look like? Is it, like you know, consulting engagements? Do they just completely like outsource their back office to you? Is it a mix? Deanna: It's a mix, it's a little bit of both At our core on the accounting outsourcing side. It's, like I said, an alternative to having an in-house team. It's a team-based approach and then we can augment that solution with special project resources, either on the accounting side and then, most recently in the last three and a half years, we added a COO advisory team that can really round out that finance function. And whether it's for an ongoing type of service there or popping in for a project either way. Dave: Okay, got it. Okay, I think I'm with you so far. Well, I love stories and I think our audience does too. Do you have some like client, like success stories that you can tell us about? And I realize you may have to have them anonymous, but I think that helps people understand, understand better with stories and examples. Do you have some stories? Deanna: I do. You know, I guess before I would launch into that I would say is just to add on a little bit to the concept of people don't come to us because their accounting is going well. You know, we're system agnostic, which I also think is a benefit. We work with a variety of industries and so just a lot of times people will come because they're very frustrated in terms of being able to attract and retain top talent where there's been a transition in their business and they're looking to augment and get information. So one that comes to mind in particular it's a family-run business, a wholesale distribution company, and they knew they wanted to sell second generation, but they really knew they wanted to sell. The CEO was not a family member. There was a family member that was still involved in the company and so they brought us on to help get their accounting ready for sale. I'm sure processes really make sure that they are adherence with GAP and so we worked with them probably for I don't know about a year and a half or so working through all of that, getting good cadence, with their month in close and their financial reporting really all in preparation to be put up for sale. Excuse me, they went through a successful transition. This one happened to be purchased by a private equity group, but we really help companies get ready for sale in all areas, but this one was private equity back and I think the interesting thing to note there is that this company has become now the platform for additional add-on acquisitions. So what we've also been able to do is augment to help the due diligence with this group in bringing the special project resources to bear, as well as CFO consulting and advisory. You know when it's needed. Dave: Okay, no, that's, that's great, did? I'm a big fan of John Wierlow's podcast. You know John. He wrote the book Built to Sell and he has a great podcast where he interviews every week an entrepreneur who had a successful exit and they kind of debrief on everything. Do you think that deal would have been much more difficult, if not impossible, to get done if they had not engaged you for the prior year and a half? Do you think it would have just been a non-starter for the private equity firm without that, or do you think it would have just been a lower price? Deanna: That's it lower price. There's a lot of capital out there that people have been to deploy, so I don't know that. I would say I think the accounting, when it's really bad, it may delay. I don't think it keeps the deal from getting done. But I think what we have seen and what our investment bankers and private equity folks will tell us, that having good information and your ducks in a row can really be the equivalent of two to three times turn on an EBITDA. So it's definitely an enhancer to valuation. Dave: Okay, give me one second. Hey, my dog is over in the corner. He woke up and decided his bed wasn't quite comfortable. He was just scratching around. Sorry about that, yeah, and that's, and that is what it comes down to, right, and then the due diligence was probably less painful. I'm guessing as well. Deanna: Yeah, it is. You know we have a product called an accounting assessment and it really sits in front of the Q of E reporting that is in either on behalf of the company or the private equity group and really just kind of what I'll call kick the tires on the accounting and it may seem like basic things but it can be very important. Are they really gap compliant? Are they matching revenue and expenses? Do they have an accounts payable process? Is there a revenue recognition need? That's out there for the type of company they are, and are they adhering to the right treatments there? So those are things where we can really go a little bit deeper into the accounting pretty quickly and that really helps with that Q of E and just helps the process move along to identify what might need to be shored up. Dave: Okay and Q of E quality of earnings. Deanna: Quality of earnings yes. Dave: Yes, thank you for clarifying. Yeah, okay. Well, that's a cool one. You have some other client stories. Deanna: Yeah, another one a little bit larger company. So we're, you know, like I said, we can work with companies 10 to 500 million in revenue, and this one was a multi-entity dental service organization and this one in particular had grown through acquisition. The CEO, when they came to us, was pretty frustrated and heavily involved in the accounting. They had a team in place, four or five person team, some offshore, some onshore and it just wasn't getting the information that he needed and instead of using the time when the financials were generated to analyze and look forward, a lot of time was spent checking for errors. This particular company had outside reporting to an investor group as well as to a bank, and so there was just a lot of eyes in different constituencies looking at the information. And there's just a lot of eyes and different constituencies looking at the information and there's just a lot of time checking for mistakes. And so we were able to come in and map out the very seamless transition over a period of a few months. We tapped into our offshore team as well that we've had since 2006. And we were able to transition to the accounting to our team really short processes and procedures move up the month-in-close timeframe so we could get information into the hands of the management team sooner and then hence out to the external reporting constituencies. And now the time is spent really looking at the operations of the business, figuring out what needs to be drilled down on getting information out to those individual locations more analysis and forward looking than looking for errors. Dave: Okay, did they end up just eliminating that internal team then? Deanna: There was a transition. A couple of people on their India side were kept and moved over to. We don't handle the billing, because insurance billing had a different team, but a couple of those folks were moved over to that team and then the others were transitioned out. We don't handle the billing, because insurance billing had a different team, but a couple of those folks were moved over to that team and then the others were transitioned out. We don't always have to be a situation where we transition team members out. A lot of times it's really based on sort of the level of talent and what the opportunity is there. We kind of round out that function if there's resources that need to remain in-house. Dave: Okay, so you had a situation here where, let me just recap because of the bank and the investor group, the accounting team was hyper-focused on not being in the uncomfortable position where the bank or an investor would say, hey, what's this expense? Then they look at it and then they come back and say, oh, that was a mistake, we had miscoded that, and which just crushes the confidence that those investors and users have. So it sounds like they were hyper-focused on preventing that and they probably got to that hyper-focused because they'd been burned, probably in the past. So they got to that position to burn probably in the past. So, yes, so they got to that position and because of that that slowed down the close and it just had them really devoting a lot of time and resources to just that. You know, no, no errors financial. Deanna: Yes, and also getting the senior management team involved and kind of running down those errors, spending way too much time in the higher level I mean, because the trust wasn't there and they were the ones that were putting their faces on the front lines right to the investor group and to the banks, and there was, you know, debt on the books and you know, and so they really wanted to kind of just glitched up sort of the roles and responsibilities and freed up the CEO to really, like I said, focus on more of the analysis once the team was able to start trusting in the numbers again. Dave: Okay, well, that's okay. That's another great story. Do you have a third one? Deanna: Let's see. You know, I think we've had lots of situations where we can come in, so these were involved, sort of taking over everything that. We have lots of situations, though, where we can come in, so these were involved, sort of taking over everything that. We have lots of situations, though, where we can come in. And you know the thing about some, especially the founder led companies they have really great people on their team that have grown up with them over time and they become family members, right, and so it can be difficult or challenging sometimes when you've got a really longstanding, committed team member, but maybe the company has grown to the point where it's maybe outstripped the skill sets of that individual or individuals, and so those team members bring a lot to the table in terms of institutional knowledge, but they may not have what's needed to take the company to the next level from the accounting standpoint, especially if there's complexity in the business. Sure, mentory management, manufacturing processes or, for construction, clients work in process. So we do this quite a bit. Actually, we'll come into scenarios where those types of team members are on the ground and a lot of times the business owner, the management team, really want to keep those folks and elevate them into new roles because of their operational expertise. So we can come in and augment and work with those types of team members so they don't have to be displaced and they can get more on the analytical side of it, or they can be a bridge between operations and accounting and then we can come in and do that blocking and tackling on the accounting and really get the books closed and make sure that we bring that type of product to the table for them, but that those individuals stay in place and are supported by us but also elevated and coached by us if need be too. So I don't have a specific particular client on that one, because that's a lot of what we do for clients. Dave: Yeah, no, that's great A representative example, because that's a lot of what we do for clients. Yeah, no, that's great A representative example. So the CPA firms we work with, you know, so basically all of our clients because we do just one, we do just one part of the tax process that we coordinate with their longtime CPA firms so we have interactions with hundreds of CPA firms each year. Firms so we have interactions with hundreds of CPA firms each year and, of course, a common theme is just the shortage of qualified people, and I'm guessing that's a similar problem in-house as well, not just in public accounting. Is that accurate? Does there seem to be a shortage of talented people? Deanna: Yes, we've had a shortage of accounting folks for quite some time, really even pre-COVID, but it's definitely been exacerbated by COVID and the opportunity for accounting folks to work remotely to service companies all over the country and, in fact, from all over the world. I think we've been doing outsourcing since 2000, and so we were a little bit on the cutting edge of, hey, you can get your accounting done and not be in the office, you know, sitting there. But now it's really opened all of that up, and so it has created some challenges in attracting and retaining folks. So for us we're not immune from that. But we offer our team members the ability to work with a lot of different clients and be promoted from within and a career path and, you know, in training as well, and so they're first and foremost employees of Venturity, which we are a 20% ESOP owned company and we're also open book management. So we invest a lot in our culture, which I believe helps us to attract and retain folks. We also have an offshore partner that we have worked with since 2006. And so we partner with them and so we divide and conquer on scope of resources between our two groups as well, which just helps us in terms of being able to, if an opportunity comes to us, especially if it's a large one, mobilize quickly to serve that client. But you're right, it's been tough for several years now. Dave: But it sounds like in on balance it's been more of an opportunity for you because you're better able to navigate that shortage than what your client is probably. Is that accurate? Deanna: Yes, I would say so. I think you know that's very true, and we can provide that ongoing training as well, and we have 50 accountants that come to the office every day. So there's a lot of collaboration, team-based approach, resource sharing, things like that, and so that's enticing to a lot of people, as well as the ability to get exposure to a lot of different companies and a lot of different industries. So being system agnostic, working in a lot of different systems as well as industry, provides a lot of opportunity for folks in the accounting field and the opportunity to be promoted as well. Dave: Okay, and you all don't like audit financial statements or prepare tax returns, correct? No? Deanna: that's a really great question. So we're really structured as a professional services company and we like to say we sit on the same side of the table as our clients. So while we have CPAs on staff and our founder is a CPA, our clients get audited by outsourced CPA firms and we don't do tax work either. So we're more of that internal accounting department resource and we partner a lot of times with the tax CPAs and the auditors in terms of giving them the information they need to discharge their services. Dave: Okay, what do your clients say? Or what would you think your clients would say if I said, hey, what makes Venturity so great to work with? What are the things that your clients tell you differentiate you in the marketplace or make you such a valuable partner? Deanna: Yeah, I would say the quality, two things the quality of our work as well as the proactive focus we have on collaboration and communication with our clients. We're consistent. We deliver our financials on time. We send out weekly updates to our clients that they even though we're not going on site to do the work on a regular basis they know at any given point in time where they stand. We're in constant communication with them. We do have onsite meetings it's not like they never see us by any means, but it's very reliable, very consistent. It's very process and team-based versus a people-based solution where you have, maybe you know, all of your accounting is done by one individual and it's tied up in the head and knowledge of that one person. We bring a team to the table and divide and conquer on skill sets, and that's a little bit unique in terms of the way outsourcing. We bring a team to the table and divide and conquer on skill sets, and that's a little bit unique in terms of the the way outsourcing it has been done. Dave: I know some of our the CPA firms. We know, because of the shortage of talent, they've had to make some hard decisions. You know which clients you know they can serve and they've had to actually, you know, disengage with clients just because they didn't. You know they just don't have enough people to really serve everybody. Have you all had to go through a similar process where there's just you know some of your smaller clients you just realized you just don't have the capacity for? Has that been a challenge for you as well? Deanna: We definitely have gone through that in various periods of time. You know we had a couple of things during and coming out of COVID. There was just more work to be done than you can have people for, and so you know there was at one time at our not proud of this, but we had a wait list of like six to eight weeks to bring on a new client and that's super challenging. And so at that point in time we, you know, we were working to have the most efficient client relationships that we can, and you know we want to make sure we have partnerships with our clients where there's mutual value in the relationship. We're more than just bookkeepers and ticking and tying on transactions. So our clients that really that we both collectively benefit the most from, are those that really value that collaboration that we were talking about getting together once a month and having financial summits or we call it getting the call, the ones that are going to pick up the phone and call us and include us in decision-making. And so when we have to have those times that are unfortunate, when we go through some of those analysis to make sure what's the best fit, we take all those things into consideration. So we have had to do it. We don't like to do it necessarily, but at the end of the day we're looking for the right fit on both sides, and so generally that works itself out in the way that it's supposed to. Dave: Okay, yeah, that makes sense. As far as new business the business that's referred does it come mostly from current clients, investors, cpa firms, banks, a mix of all of them, and are there any? There have been any trends in the last few years where it's shifted one way or another? Deanna: way or another, the answer is yes, it comes from all of those. We've got a really great business development team. So we're a referral-based, relationship-based selling organization. We do very little cold calling. We're keeping our eye on things that are out there in the market and definitely are opportunistic. If we come across a company that we may think that is looking for someone or could use our services, and we'll reach out. But yes, we, we develop a group of center of influence. You know relationships and they are comprised of everything you just mentioned. You know bankers, cpa firms, lawyers you know, other professional services providers that really have the ear of that client. You know as well. I would say, one of the things that's been an interesting trend as of late and I would say late, maybe four or five years is the CPA firms are more and more focusing on the client accounting outsourcing space Used to be they would do bookkeeping as a means to an end for the tax work and they weren't so much focused on providing what I would call ongoing accounting services to clients, but we've definitely seen a focus in that area in the last five or six years, but it's pretty popular right now and so, but there's still so many companies that need expertise. We don't often go up against five or six at a time when we're looking at a new relationship. It's still very rare, and mostly what we're competing against is companies choosing to build an internal team, but we're definitely the CPA firms putting more emphasis on it. We still have maintained those referral relationships because if you are auditing those companies, you generally don't want to necessarily be doing the accounting for them, and so we partner with folks that really want to put the best interest of the client first and foremost, and so our referral partners. You know there's sometimes overlap in terms of what maybe they can do and what we can do, but when we take that honest approach to what's the best in the best interest of the client, that tends to work itself out. So we want to have partners as well. When we come across something that is not going to be a great fit for us, that we can send and know that they're going to get taken care of in the way we would. Dave: Okay, no, I like it and that's interesting that evolution of the CPA firms really doing more and more outsourced accounting. It makes sense and I think back when I was at Arthur Anderson like a long time ago well, they'd been out of business for 25 years, so it's been a long time ago but I think back then the accounting firms could actually do consulting for clients they audited and I think that was part of the shakeout or the fallout from that and I think that's what led to Sarbanes-Oxley and some of that stuff. Deanna: Now you're getting a little technical on me, but it's actually true. So, public companies if you're a public company you really can't do it. If you are private, technically you can have that separation. The onus is on the CPA firm to make sure that if they're doing an audit and also doing the accounting, that they put the proper separation in place. But a lot of them just won't mess with it. You know because of things that have happened in the past. In certain situations it might make sense, but we oftentimes find that they like to maintain those relationships and so if they've got a strong audit relationship and there's an accounting need there, they generally will refer it out. Dave: Okay, well, that is excellent. We have covered a lot quickly as we're kind of nearing the home stretch. Is there anything I have not asked you that you wish I'd asked you? Deanna: You asked some really good questions. I mean, I think we haven't talked too much. We talked a lot about accounting. We haven't talked too much about our advisory practice. Dave: Yeah, let's talk about that. Deanna: It's relatively new. So our company is 23 years old and I've been with the firm for about 20 and off and on throughout that time. Actually, during all of that time our focus up until about three and a half years ago was the outsourced accounting piece and to get specific about, that's what I would call the controller level and down. So you know our relationships are rooted in that month in close in the financial reporting. We can also pay bills, invoice clients. We don't do actual payroll processing but we do payroll coordination. So a lot of balance sheet reconciliation work, that type of thing, and over the years there would be times where a client may need that forward looking piece or some additional consultation or an advisor to the CEO or what have you, and so we would bring in a CFO generally fractional CFO partner from the outside. So we would maintain those relationships as well and have good referral network there and that's worked really well and we've maintained those relationships. But about three and a half years ago we established our practice internally as well and we have five what we'll call CXOs. But the reason we have the CXO in there is because it's a combination of CFOs and a couple of folks that are COO, executive type individuals that are 25 plus 30 years plus of experience in the marketplace that can bring that expertise and knowledge to the table to really round out our accounting function and really have what we call that seat at the table with the management team. What that does is it allows us to go deeper with our clients and bring operational expertise to the table or kind of merge and mesh the operations in the accounting. Accounting is the ultimate scorecard. So if you're doing your accounting correct and you're analyzing your information, then you can take it back to what's going on in the operations right, whether it's a process you need to revamp or sales you need to focus on or handling something slightly different way, so that team can help. Those individuals can help bridge that gap and then take that information and look forward with the client as well, and get more into forecasting and budgeting. And how do we prepare for a sale, or where should we go next? A new market, that type of thing. So it brings that operational focus in, you know, to the forefront too. Dave: And that service? Was that more an augmentation of existing relationships or adding that piece? Or is that actually grown to be where you're actually bringing clients in through that service path and then sometimes adding the accounting outsourcing or not? Deanna: Yeah, that's a really great question. It's been a little bit of both. So, you know, we've been able to expand our existing client relationships and bring that level of you know of service to the table. But then we have a lot of opportunities that we may not have been able to do the accounting if it were not for that C-suite individual to lead the charge of the team. And those are usually, the more you know, david, the more complex situations where and it's generally not the complexity related to the accounting, it's the complexity related to the relationships, the management team folks, the constituencies, whether external reporting, things like that to have that C-suite individual to help manage all of that allows us then to come in and do what you do, what we do, really well, which is the accounting. It can be challenging for our controllers to have to manage multiple relationships at the client level because of the way that our teams are set up. So to have that extra level of expertise who can get in there and have those conversations and be a right hand to the CEO or other members of the management team, allows us to have a more expanded relationship in certain situations. Dave: OK, yeah, I can see why you all have gotten into that service line. And then how do you know when to still use one of your longstanding fractional CFO relationships, maybe industry expertise or something like that? Deanna: relationships, maybe a industry expertise or something like that. Yes, thank you for bringing that up, because I'm particularly proud of the fact that when we started the practice, we went to the folks that we had existing relationships with and it's you know, it's a variety and we said, hey, we're getting into this, but we don't want to displace our relationships with you know, with you for that very reason because they're you know, as I said before, our focus is to make sure that we've got the client's best interest in mind, and you know our folks are generalists that we have on our team, and so if there's a particular expertise that is needed, say, and really deep restructuring knowledge, or you know just something where we don't have that expertise, we want to be able to refer it out to someone that we know and can trust. So we've maintained all of those relationships. You know that if it doesn't make sense for us, then we know exactly where to go with it. Dave: OK, no, I'm glad that you mentioned that and I'm sorry I didn't ask you about that. What else? Is there anything else that you wish we'd covered, that we didn't get to? Deanna: I think a couple of things that might be unique about us that I think allow us to really bring a high quality service to the table is that we're a group of accountants, so we definitely know accounting, but we went open book management in 2017 through a relationship with an organization called the Great Game of Business I don't know if you're familiar with it, I do. Dave: Yeah, the Springfield remand. I forget his name, jim, something. Jack Stack, jack Stack, yeah. Deanna: Yeah, and so we really we went open book management, not because our folks didn't know how to do accounting, but we wanted them to be able to have a stake in the outcome and to really feel empowered, to know that they can make an impact in our business, and it's been very successful for us. As you can imagine, it's a process-oriented kind of system and a communication system, and so our folks love process and so we follow it. What I would say letter to the law. We huddle every week. We know where we stand at any given time in our financial situation, and the benefit to that is our folks are constantly having conversations and engaging themselves and services farm where the new deals come from. So it's much more expansive than just, hey, how do you calculate gross margin or net income. So that type of conversation really allows us to even be better and bring more of that type of conversation to the table with our clients as well, and we have clients that are becoming more and more interested in that, and so we can help with that as well in terms of helping them if they want to start thinking about how they can get their team members involved. Dave: That's great. Yeah, that was going to be. My next question was whether, having done that for seven years, you're advising clients who are interested in that as well. So that's great, yeah, it's been a lot of fun. That's great. Well, as we wrap up, I have just a couple of fun questions here at the end, Some curveball questions. Are you up for some curveballs? I am, let's see so if you'd mentioned that you've got a recent graduate of UT and then another one that's there. So the question almost could be a two-part, but I'll ask it the way I normally ask it. So if you could go back in time and give advice to your 25 year old self, what advice might you give? Like, with the benefit of hindsight and knowing how things turned out, is there any advice you might give to your 25 year old self? Deanna: Yes, absolutely so. I also have a 26 year old, so I have three children. So, I am tempering myself every single day on how much advice to give and how much to support. Sure, sure, I have evidence by my dinner conversation, even last night, with our oldest who is, you know, looking to make a career move. So I would say the advice I would give to myself is to I was someone who wanted, was very eager, to go to that next step. Have this planned out, have that planned out, get to this next step. And I think the advice that I would give to myself back then would be to take a little bit of time and try something new and not worry so much about if it doesn't go the way that you need it to, or think you might want it to, or you think it might should, and not be so worried about what happens if it doesn't work out, and that can translate to switching a career or maybe even moving away, or you know, for a period of time and just not being so planned out. Dave: Okay, yeah, I intentionally asked the question because it seems like we would be more amenable to advice from our future self than other people might be amenable to our insights. Deanna: Yeah, for sure, and you know, from my young career standpoint you didn't have this question, but I think you know I often get asked the question. I would say as soon as you can get a coach or a mentor, get one, even if you think you can't afford it. I would say invest in somebody who's going to really be objective, push you out of your comfort zone, you know, to someone that you can really rely on to to help you push yourself to grow. Dave: Okay, well, and maybe. Deanna: I've given you an opening there. Dave: So so now you, the next time you want to give advice, you can say hey, I was on this podcast and they asked what advice I would give to myself when I was your age and this is the advice I would have given to me. But I'm not saying you should take it, but this is if I knew then, what I knew now. This is what I would have told myself to do. So maybe I'll give you a new tack that you can take. Deanna: Yeah, I think, as long as it's not your kids. I do mentor a lot of women who are earlier in their career and trying to figure out how to navigate and manage and you know ebb and flow, the things that come with with life and so I really enjoy that and it's one of my, one of my passions, quite honestly. Dave: I think kids your own kids. Deanna: Having that separation is also the advice I would put out there. As we all know, we learn from that and I continue to learn that lesson. Dave: It's ironic. You could have an unrelated person who's virtually a carbon copy of you, and they could have a carbon copy family, yet their kids would take much more value from your advice, and vice versa it's something about you can't be a prophet in your own homeland, I guess you can't be a prophet in your own home either. Deanna: Yes, no for sure. Which is you know the benefit of like having a strong community. You know growing up and having kids and you know investing in your community because that part does help, yeah, but no that's absolutely true. Dave: All right. So the final question. This is the fun one, so I'm going to ask you a question and you just need to give your gut answer, right? So don't think too much about it. Okay, so we're both in Texas, barbecue Tex-Mex. Deanna: Oh, tex-mex hands down. Tex-mex hands down. I can eat beans and rice for every single meal. I actually love barbecue. Five or 10 minutes in it starts to get too much. No, but beans and rice, mexican, all day long. Dave: Yeah, I'm with you. Well, Dina, this was really fun. I appreciate you taking the time to join me this morning and I hope the rest of your week goes great. And again, it was a real treat and I appreciate you making the time. Deanna: No, I enjoyed it very much, thank you. Special Guest: Deanna Walker.

In today's episode of the IC-DISC show, I sit down with Andy Hein of Patent Veritas. Andy shares his impressive journey from chemical engineering and law firms to establishing his firm. He reveals how Patent Veritas helps businesses secure their intellectual property through strategic patent licensing. I learn how industries like restaurants and stock trading benefit from robust patent protection. Andy demystifies securing patent licenses through the secondary market, allowing businesses access to a vast portfolio. Tailored solutions are key to understanding clients' needs. For business owners, Andy discusses using patent licensing for long-term investment and coupling it with Private Placement Life Insurance. Andy offers valuable insights as we discuss real cases that illustrate high stakes, even in seemingly simple industries. We also touch on ethical considerations in competitive landscapes and ensure personalized services.     SHOW HIGHLIGHTS Andy Hein shares his background in chemical engineering and patent law, discussing his experience at Skadden Arps and Sidley Austin before founding Patent Veritas. We discuss the role of Patent Veritas in helping businesses secure their intellectual property through strategic patent licensing, particularly focusing on mitigating litigation risks from patent trolls. Andy explains how Patent Veritas acquires patents from the secondary market and licenses them to clients, allowing companies to preempt costly legal battles and enhance their IP portfolios. We delve into the benefits of understanding clients' revenue streams and technological processes to offer tailored patent protection solutions, applicable to various industries, including non-high-tech sectors like restaurant chains and stock trading operations. Andy elaborates on the concept of Private Placement Life Insurance (PPLI) for accredited investors, highlighting its dual benefits for business owners in protecting both their business and personal interests. We explore real-world cases, such as a litigation involving used car sales companies, to illustrate the high stakes of patent protection and the strategic moves companies can make to safeguard their operations. Andy discusses the ethical considerations and strategic advantages of having a robust patent portfolio to counteract competitor lawsuits, emphasizing the value of being proactive rather than reactive. We reflect on the rewarding aspects of offering personalized legal services and the importance of ensuring a good fit between clients and Patent Veritas' offerings, with a unique fee structure based on patent licenses rather than hourly rates. Andy provides insights into the competitive dynamics of the patent marketplace, explaining how companies can leverage patent licensing as a long-term investment to enhance their business value. We conclude with advice for entrepreneurs and business owners, stressing the importance of being hardworking, available, and respectful in building successful client relationships, and offering complimentary initial consultations to make the first step towards collaboration accessible.   Contact Details Email Andy (mailto:ahein@patentveritas.com) LinkedIn (https://www.linkedin.com/in/andyhein1) LINKSShow Notes Be a Guest About IC-DISC Alliance About Patent Veritas GUEST Andy HeinAbout Andy TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, this is David Spray and welcome to another episode of the IC-DISC Show. My guest today is Andy Hein, a founder of a company called Cotton. Andy has a legal background. He's an attorney and worked at some of the top law firms in the world out of law school and then he saw an opportunity and started this business and it's really fascinating. And started this business and it's really fascinating. Apparently, almost every company, every privately held company, has exposure to being sued by patent trolls or competitors that use patents as a tool to extract money out of a company, and virtually every privately held, closely held company is at risk for this. And they have a solution that addresses this, by which the company can license or have a subscription that allows them to have access to tens of thousands of patents in the company's portfolio. So you don't need to own the patents, you can just license the necessary ones to protect you and your company. Andy: Anyway. Dave: Andy's a really dynamic guy, interesting guy, interesting service, and they can also wrap it in an estate planning wrapper to make it even more appealing. I hope you enjoy this episode as much as I did. Good afternoon Andy. Welcome to the podcast. Hey, good afternoon Dave. Andy: How are you doing? Dave: I'm doing great, thank you. So where are you calling in from today? Andy: You know I'm in the great town of Carmel, Indiana, so just right outside Indianapolis. Dave: I think you have more roundabouts than any city in the country, if my knowledge is correct on that. Andy: We do. I think we still have one or two stop signs and stoplights to take out, but they're getting thinner by the day. So, yeah, we have a lot of them Now are you a native of Indiana? Dave: I am, yeah, I'm originally from Crown Point, which is in Northwest corner of Indiana, and then eventually migrated our way down to central Indiana here, okay, well, my my all-time favorite basketball player is from Southern Indiana. Andy: Oh, who's that? Dave: That would be Larry. Andy: Legend, of course, yeah, no, obviously a great player, pretty famous around these parts too. Dave: Now you, you're an attorney. Where did you go to law school? Andy: So I went over to Georgetown Law Center over in DC and studied there, focusing mostly on patent law, but a bit on finance as well. Dave: And your undergraduate degree, I believe, is in engineering. Is that right? Andy: It is. Yeah, it's in chemical engineering from Trine University, which is a school just in northeast Indiana. Dave: Okay, yeah, it seems like most IP attorneys I know have a technical undergraduate degree. It seems to kind of go together. Yeah, it's like peas and carrots. Andy: You know, especially when you go to law school, they ask well, what do you study? A lot of folks study history or philosophy, and when you say engineering, they say you know you should think about being a patent attorney. And so you go into that and you think that's kind of interesting. Actually it's a lot of fun. So yeah, we all kind of end up there for the most part. Dave: Now, right after law school. Did you launch your own firm then, or did you take a different path? Andy: Yeah, no, I took a kind of a traditional path. So I started my career at a firm called Skadden Arps and I was in the Chicago office. There I worked on actually finance work, doing supporting M&A and chapter 11 bankruptcy, and then also did litigation there as well. So spent a few years there and then went over to another firm called Sidley Austin and there I concentrated just on patent litigation. Doing deals and litigation work is a lot of fun on paper but eventually you have to pick a horse to ride on. So I picked the litigation one, so just stuck with patent litigation and worked there for a number of years before setting out on my own. Dave: Yeah, and those are I mean arguably two of the top 10 law firms in the country, right by many metrics or top 20, you know very kind of traditional white shoe law firms right by many metrics or top 20, you know very kind of traditional white shoe law firms right. Andy: Yeah, they're up there for sure. So yeah, great place, great experience at both firms. It was a wonderful time there. Dave: So let's come up to the current time. So tell me about and off the top of my head, I don't even remember the name of the company. Tell me the name of the company and why you started it and what you guys do. Andy: Yeah, so our company is Patent Veritas. What we do is we help, for the most part, privately held businesses of all sizes with their IP litigation risk as well as enhancing their IP functionality within their business. It's kind of the culmination of what I've been doing over a number of years. We're very client focused and this is one where it kind of pulls together a lot of the past experience and work that I've done and my colleague Nick Stabinski and partner Nick Stabinski has done. So we formed that and the neat part about that is it addresses a real concern that some companies know about. Just actually had a conversation this morning where someone was very aware of what we're trying to do and trying to help the company with and others haven't heard of it. But it's a risk that's out there and a very real one that we're trying to help companies with. Dave: So I know what patent means. Veritas, I think is Latin, but I don't recall off the top of my head what does Veritas mean? Andy: So it's just patent truth. It just sounded pretty good Good Latin word in there, so we have to. We put it in there. Dave: That is great and it sounds like that you saw some opportunity in this space based on your prior experience or clients. Like was there a specific situation that made you say, hey, you know there needs, there's a hole in the market here and I think I'm the guy that needs to fill it. Was there anything in particular? Andy: Yeah, no, that's a great question and there was, it's. Mostly clients were coming to us. Two things we noticed over the years, and then also, more directly, folks were asking us On the patent side. Two things would happen, because what we do is the particular IP risk is against patent trolls. These are folks that buy patents. They don't make a product or otherwise, they just buy buckets of patents and they sue operating companies for licensing revenue. So we saw a number of clients getting sued that way, and patent lawsuits are expensive. I mean a cheap one. According to the AIPLA, which is an association of IP attorneys, a relatively lower cost one, or average one, is about $6 million if you're going to trial, which is, yes, it's a lot of money. We've had clients upwards of 50, spend 50 million plus on legal fees. So patent litigation is not cheap, and so a lot of the folks that are the patent trolls are also called non-practicing entities. These folks, they know that arbitrage costs right and so they'll come in, they'll buy the patents. A lot of times then they go to these companies and they ask for a license that's below the cost of the litigation and so that's their business model. So we saw that happening to a number of our clients and these are especially targeted now are oftentimes small and medium enterprises right, privately held businesses, because that's their money right, and so they're going to make a decision, perhaps different than a bigger company like a Samsung will make or otherwise, to say hey we have the money. Dave: Yeah, they may just make a more pragmatic decision, right, because they may not have $6 million to spend. Andy: Exactly so. The decision process by an Apple or Samsung, which has a much larger litigation budget, is a lot different than when you're targeting, say, privately held manufacturer or maybe a restaurant chain or something like that Very successful businesses and oftentimes making many millions of dollars, but their decision with that money is a lot different than an Apple. As to saying I'm just going to fight all this, we're just going to fight everything that comes our way which isn't really possible for these companies because they don't have that deep of pockets, and so we thought of a solution for that, which I'm sure we'll talk about soon. But it came from that. And then also in our work, we buy and sell patents. That's how we kind of got into forming Patent Veritas, and that comes into play here as well, where we see this secondary market of patent purchases and sales going through and oftentimes those patents ending up in the hands of these non-practicing entities or patent trolls, and then they go off and license that. So we see that market as well, and I think we're able to. We formed a company here to kind of make a difference for that and help folks out. Additionally, what we also saw a lot of times were our privately held clients again, successful businesses, all ranges of things but they didn't necessarily devote the resources or have the capability really in the IP space and so we also address that with Patent Veritas, which is helping companies have almost an instant patent portfolio when they work with us. That's also expensive to develop. You know it can cost several millions of dollars to develop your own patents organically and grow it, which is a great thing to do, but it takes money and time. It often takes several years as well. So our company kind of marries all that together, the experiences we've had with our privately held business clients, and put this together in a really neat service that we can provide to people. Dave: Okay, so I think, if my recollection is correct, I think it was in 1899 that the head of the patent office announced everything that could be invented had already been invented. Is this true? I think it was a moratorium on new patents for some period of time. Andy: Well, I think he wanted to. I don't know if he did, he might have, but that was definitely said and everyone always points to that as oh geez, you know, when everything is done, everything all the inventions are made, they point to this, you know. Some other interesting things were the patent office had kind of a list I think they still do of potential inventions or products that are impossible. One was heavier than air flight impossible right Until the Wright brothers came up with it. That didn't happen, so that was on the list. Another one that was on the list was I think this is funny hair growth for men. Almost impossible, right Until someone created it. So yeah, I think since 1899, we've had one or two inventions that have really helped us out, so I'm glad. Dave: Oh, that's funny. So you're saying so to kind of simplify things. The patent examiners just kind of had a cheat sheet of the 50 kinds of impossible things that some scam artist is going to try to patent and you can just automatically reject those when you just look at the impossible. Andy: That's right yeah. Dave: Well, talk to me about the patent, the secondary patent market. Andy: How large? Dave: like how many patents change hands a year, or what's the? How do you measure the size of that market? Andy: You know, honestly I'm not sure it's a private market. It's one where it's not there's metrics. But you know, this is one where companies buy and sell patents for strategic reasons. So it's not like the NYSE where you can go in and see how many million shares were traded. So it's one where it really is kind of a bespoke market. There's, I would say, several hundred thousand patents change hands maybe, or tens of thousands of patents maybe each year. It's quite a few, yeah. But it's a mixture between strategic players your Samsungs, your Apples, your Googles of the world maybe filling holes and doing deals with each other or other companies. And then it's also a combination of, say, these non-patent, non-practicing entities or patent trolls purchasing patents and that kind of makes this whole marketplace go. And it's a global market. People are buying and selling, especially you know some of the changes in Europe where they have a new patent court for the entire European Union, you know. So that made all these European patents change hands more often. So it really is one where there's no marketplace, single marketplace you go to and say I want to buy a patent. It's more of just folks brokering patents and just being part of the marketplace more of just folks brokering patents and just being part of the marketplace Gotcha. Dave: And then, in addition to the actual tens or hundreds of thousands of patents that are changing hands, you then have licensing deals, which are probably of a similar magnitude, I'm guessing. Andy: Yeah, oh, definitely. So there's a lot of licenses, yeah, and those now the patents, don't necessarily change hands, but certainly value does, right. So you'll see a lot of companies cross-license patents where they can have access to each other's portfolio, and then there's different degrees of licensing where, for example, at a university, you can license patents out on an exclusive basis. So you have every right as the licensee, almost every right except ownership of the patent itself, and so that too, even though that's a license, that's really closer to being a sale because of how many rights transfer over to the person. So, yeah, the patents are it's a little bit of a complicated business. Just because it's property, but it's intangible properties, you can do a lot of different things without actually changing hands, or you can change, actually have the property change hands. Dave: Fascinating. I wanted I'm really anxious to dive into this. I know you speak on the subject a lot. How do you want to kind of lay this out for the listeners? Andy: What kind of? Dave: sequence of events. Andy: You kind of want to go through to explain in more detail your services, your product and such yeah, we can just take it from the top of how we normally or folks will approach us because there's some, as you know, there's some interesting estate planning opportunities as well that we can put together with this. So, on the front end, with the businesses, a lot of times we'll be approached or we'll approach clients, or what have you usually referred over to? They're referred over to us and the ideal client is someone who's a privately held business, successful privately held business and it can be of a variety of. You know, a lot of times people think that the folks who need patents or use them are high tech, and that's not necessarily the case, especially in the fact of the non-patent. You know, the patent trolling side right, the patent trolls really like to have kind of simpler businesses to target, because even those simpler businesses use a lot of technology today. So our clients come to us all the way from their restaurant owners, successful restaurant chains, all the way to maybe trading operations where they're doing stock trading and they have their own software or sell software in that To, of course, you know your traditional high tech companies that are privately held, of which there's many, and then some people in between, so the metal benders of the world that you know are very. We have in the Midwest right A lot of manufacturing companies, so all those are great clients because they all use technology. Even real estate developers nowadays are using some really high-tech stuff and they're not just digging dirt and building houses. So really any of those clients are interesting folks to talk to and could use our services. So what we do is we'll sit down with them, talk about what we do, like we're doing, and then also just understand some of the risks they face, namely like what do you do to make money? How do you earn income? So we figure that out, because that's where the patent trolls are going to target. Then what we'll be able to do is match up. We have patents and then we can also purchase patents in the secondary market if we don't have the right ones for them. And then for the most part we'll figure that out and then we'll right size the license amount to see, okay, how many services of ours can we really help? What can we do? And then we'll get a patent license over to them, or the license or the patents from us. Because what we do is I didn't even mention this, I skipped ahead but we go in the marketplace, our marketplace that we're in every day, and we see these patents that are there that might be good patent, troll patents or targets, and we'll buy them before the trolls do. And then we own those patents, we put them essentially can think of in a bucket and then we license those out to our clients. So we have access whether we own them or have access to many tens of thousands of patents that can work for the client's purposes. So we do that client gets a license to this, and the longer they subscribe with us, the better. The value is because we'll charge a flat fee and we're going out there and buying patents all over the place for them. Also, what we'll do is kind of understand, okay, what are the risks that you face from competitors and what are some of your goals in the IP space. Like, do you have a patent portfolio? Do you want one? Should we have one? And then we can also use our own patents to provide that kind of starting point for them if they want to build their own portfolio or if they're sued by a competitor, which happens a lot, which is one of the reasons why we formed Patent Veritas, because we can instantly help them out and say hey, we have the following three or four patents you should probably use. You can sue the competitor, because the worst thing you can have is to be sued for patent litigation and not have a patent to sue back to somebody. They have a gun, you don't? That's a pretty bad fight and we get called a lot of times Again. One of the impetus, one of the reasons we started Patent Veritas we were getting calls from people to say hey, we have a patent lawsuit against us. I don't have any patents. Usually the lawyers would call us and say can you get us patents quickly? How fast do you need them, like in a day or two? Well, that's not going to happen. It takes a while to get these patents, to purchase the right ones. So now we can have these patents available in case they're sued by a competitor, and that really helps out a case. Dave: So that's on the front end. I was going to ask you, so your clients, are they licensing, like your whole portfolio of patents or just certain patents? How do you typically do that? Andy: Yeah, just the ones that are going to be of value to them. So we'll have groups of patents that are of value to almost any companies. I call them process workflow patents. So almost every business has some sort of process workflow that they go through, and it usually involves software. These are the most typical ones, but that's almost every company everything from a restaurant where you're purchasing you know you don't think about it, but if you order from a restaurant online on your phone, there's a process workflow that goes from start to finish, or even when you sit down. A lot of times restaurants are automated, especially some of the bigger, not necessarily publicly changed, but some of the better, even kind of privately held chained restaurants. They're going to have a process workflow from when you sit down, you order, you do this and there's going to be software and automation involved in that. So those sorts of patents, generally everybody should probably have a license to, and we're on the lookout for those all the time, because those are prime patent troll patents. So we want to buy those and at the same time then there's going to be some that are a little more bespoke to their industry, right. So if you're in the manufacturing business, you're going to have a certain need of different patents versus if you do, say, crypto trading, right, you're going to have a different set of patents that are more crypto specific. The metal benders of the world, the manufacturers of the world, are going to be over here. They're going to have a different group of patents, so we'll include those as appropriate. Or, if you're a restaurant, you're going to have different online ordering patents that are probably very relevant to your business, not so much to the crypto guys. So that's how we usually do that and kind of right size, which ones are going to work best for who? Dave: And you mentioned the scenario that an attorney representing a defendant will call you saying, hey, my client needs some patents. Can you help us out? It seems like, from what I know about litigation, it seems like it's almost too late by then. Is that true? Is it better, even if it was the day before they were sued, if they had the license in place? Yeah, oh yeah. Andy: Whenever, if you're the defendant and you're calling us looking for patents, it's on the late side and that's tough to get in place. We can do it, but it's going to take a while and that's not the position you want to be in, because the case isn't going to be stayed just because you don't have any defenses. It's going to keep moving. In fact, the plaintiff is going to be really happy. The adversary is happy that you don't have patents and to move that case along quickly because it's going to force you into a settlement. That's not very favorable. So yeah, so that's why we always try and get the word out, try and talk with people, like we're doing here, like, hey, guys, we can offer this, let's talk now, as opposed to when you're sued by a patent troll or you're sued by a competitor. Let's talk now and get this in place and let's get that access to the IP in place now. Dave: Okay, so let me just recap to make sure I have it. So you're having proactive conversations with these privately held companies and you're kind of assessing their current IP portfolio and then you're deciding if it should be supplemented with some patents licenses to patents that you own and then you kind of get them set up as a client to patents that you own. And then you kind of get them set up as a client and then over time you'll acquire more patents that they may just automatically benefit from. And then if they then do get sued, they have a really strong defense because they have access to all of the licenses or all the patents that they've licensed from you. So now, all of a sudden, instead of coming back saying, hey, you've infringed on the plaintiff's patent, they can say no, we haven't, and in fact we actually have intellectual property that protects what we're doing. Is that kind of the idea? Andy: Yeah. Well, it's even more than that they can use the patents to sue the other party. It's not so much it protects what they're doing, it's more of hey. They're going to say. The plaintiff is going to say, hey, you're using my patent. Look at this, You're manufacturing tires a certain way. That's fine. What they're going to say is now our client is going to be able to say fine, but we have five other patents that you're using right now, so we're going to sue you back, so we can either go through with this. We can either go through with this whole lawsuit and I'm probably going to make more money off this than you are or we can resolve this suit, Because the goal is to actually bring the suit to a close as quickly as possible for our client. And by doing that by having your own weapons, you can do that. Dave: Now with a patent troll, you won't have as much of an offensive approach. Right, that's really more if it's a competitor suing you. Andy: That's correct. Yeah, if it's a competitor, you have that. If it's a patent troll, the goal here is to try and starve the trolls of as many patents as possible and minimize that risk. So it's a double part that we're able to provide for that. Dave: Okay, okay, all right. Well, let's move on to kind of the next part of the process or the business. Andy: Yeah, no, I mentioned some really neat tax and estate planning opportunities here as well. So the way the business is structured is that, if we're able to allow our clients, this is kind of a longer term solution for them with their IP side, and that allows us to do some really neat things as well, because the most common, most popular thing is for us to actually then look at insurance and insuring our deal, if you will, and that is. There's a couple of different ways to do it and it really depends on the client's own estate planning. A lot of the folks that we work with are pretty well-off folks, pretty affluent folks from their businesses, but the simplest thing would be that we could take out a life insurance policy on the business owner who's of the company, and the reason we want to do that is because we want to make sure our deal goes through. So a lot of clients are going to sign a multi-year deal, three five-year deals, ideally even longer. We'll have you as a client as long as you want, but something in that order and then we're able to take out a policy and purchase a policy where we pay the premiums, and this is a whole life policy, and so the cash value is going to accumulate in that as we pay those premiums, and then if at a certain time the client decides to end the relationship with us, we're able to transfer that policy over to them in an efficient way however that works for them. Again, that's kind of bespoke to the particular client, but we can move that policy over to them. So the advantage is twofold. Now is that by working with us, their business is getting access to all these different patents, access to our portfolio able to counterclaim against adversaries if they're threatened or sued threatened or sued and at the same time now we can help them out with a life insurance policy where they name the beneficiaries, they do those sorts of things and then ultimately that policy will be sent over to them when our relationship with us ends. And so now they have a hopefully fully paid up whole life policy with cash value that they can use for whatever purpose they want. So it's a really neat way that it's structured. There's some other types of insurance as well. If folks qualify for that, it's called private placement life insurance, and with private placement life insurance that's for accredited investors. But that's another possibility where we can work with them via PPLI, or some of our clients have PPLI it's private placement life insurance is called PPLI. They have that in place already and so we can do something similar with that slightly different structure for our backend. But again, if it's already set up or if they want to set that up, that's a different form of life insurance and it really depends on what the client. What's best for the client as to their particular situation. But the neat part about that is is that they get a double. You know, they get both benefits, not just the. Their business gets the benefit and then they get the benefit as well. Personally for some of these in life insurance. So it's a neat system. We're able to work with that and to offer our clients. Dave: Okay. So let me just let me check for understanding there. So the client signs some, some contract with you, you know you, for some period of time three, five more years to basically have a subscription to the various bespoke combination of patents that they are licensing Because of that contractual relationship and the receivable that your company has, that gives you an insurable interest, because if the owner of that business were to die suddenly, that might jeopardize the ongoing nature of the business, which might jeopardize your ability to collect on this long-term contract, right? So that's what creates the insurable interest. And then, in theory, every client wants your product. They just maybe don't want to pay for it. Well, and it's not just your product, it's a lot of things, right? Most people want lots of stuff, they just don't want to pay for it. And so by using this structure, by adding the additional layer of the life insurance, it makes it a more attractive value proposition for them, and not only in the short run, but even in the long run. Andy: That does no well, said Absolutely, because, yeah, this is an extra benefit from working with us. It's not just, you know, especially privately held businesses, right, it's again, this is those owners money, right, and they're working hard for that. So they may want this service, but they say, like you said, geez, this is kind of expensive, because patent licenses are not cheap. There's several hundreds of thousands of dollars often. So this is a way, though, to provide an additional incentive for working with us over the long haul. Right, making a commitment with us will help make a commitment with you as well and provide a real benefit to you and your family from working with us, in addition to a client for the long term. And that's where the value can really accumulate for the business as well, because each year, we're going out, we're buying, we're bird dogging more patents, we're buying more patents, so that bucket, so to speak, just keeps getting bigger for that price. So it's a great thing for their business too, because the longer you work with us, the more patents you're going to have a license to, and the more value you're going to realize for your license, the more patents you're going to have a license to and the more value you're going to realize for your license. Dave: How do you decide, like, let's look at a hypothetical industry that has 10 players in it? Let's say it's some niche industry and there's 10 companies that all manufacture something similar? Well, obviously you can't go sell your solution to all 10 of the companies. I mean, I guess you could. It would at least protect all of them from the patent trolls, right? Give them any protection from one another. How do you? What's your strategy there? Is it kind of a once you know? In a situation like this, once you have one client in this space, do you not take on any more? Or by yeah, and I guess it depends on which risks they're trying to ensure. If it's the patent troll risk, in theory the 10 of them are all better off teaming up, if you will, to combine their resources, and it would be more cost-effective for you to license the same group of patents 10 times or sell 10 subscriptions instead of just one. Tell me about how you strategically look at that situation. Andy: Yeah, situations like that I mean you have to be careful on because you don't want to have where you know you start having kind of clients suing each other and both of them coming to you for patents to use against each other. So it's a great point made and we assess that on kind of a case by case basis. But it really is looking out for kind of a conflict of interest. We haven't had that happen, but if it is, we would look at that and say, okay, we'd be careful about what rights each party would have. Like you said, if they all want patent troll protection, that's not as big of a deal. But if folks want to have that access as well to the patent portfolio, now we really need to look at it and say, okay, what could happen if these guys sue each other and what should we do? And the right answer there is to not take conflicting positions. That's a pretty straightforward thing. Dave: Well, that's another reason. When you're talking to a potential client in this hypothetical scenario of 10 players in this industry, the fact that you're talking to one of them implies you don't have the other nine as a client. And if they say no to you in the back of their mind they have to be thinking well, you know who are they going to call next. Right, yeah no, that's. Andy: Yeah, we've had something not exactly similar but like that happened in other, and that's right. You know it's a Coke or Pepsi thing, so if Coke says no, we go to Pepsi, then Coke knows that. Well geez, that wasn't maybe the best thing. So yeah, that's absolutely right. It's a little incentive, I guess, for the client who we're talking to to sign up for us, in addition to all the benefits we just talked about. Maybe they don't want to see we'll be behind the scenes and all of a sudden get whacked over the head with some patents. That's never a fun day, sure. Dave: So can you for the listeners. I find that, like case studies, examples are really helpful to help learn. Do you have like an example or two you could give us and I'm sure you'll? You know they'll be anonymous, but maybe just an example of you know of maybe somebody who was a client who got sued and the outcome because of this? Or could you give us some kind of examples or a blended example of several things, a hypothetical, whatever you're most comfortable with? Andy: Yeah, we can do a couple different ones. I mean, we haven't had yet where a client was sued and had to access the portfolio. We haven't had that yet, but we have had in the past where we will get. As I mentioned, folks are sued, they don't have patents, their adversary does, and this was in an area where you wouldn't even think of as being like there's patents on this. Car sales, okay, used car sales, oh wow. No one thinks of this like that. But there is actually. There are patents out there. I know for a fact there are patents out there in the used car sales market at reaching pricing and reaching distribution and how to optimize inventory, all that. Those are real patents and they were issued by the United States government. And we were in the middle of that case won't name parties but where two competitors used car salespeople, big ones, very large companies, both privately held one sued the other. Not surprisingly, we got a phone call from their attorney and they said listen, we have a bit of a situation on our hands. These two companies are suing each other. Their competitor just sued them. They have a patent that pretty much covers 100% of their revenue, which is never a good position to be in, because that means that all of your businesses is at risk. We need patents. We need them now. We were able to help them and we were able to locate and find used car patents which was a great win. And they were very happy and were able to do that in a way that, in a timely fashion. However, that was a fire drill that I don't ever want to go through again and really did set this whole business of patent veritas in motion. One of the reasons because Nick and I Nick Stabinski and I looked at each other and thought there has to be a better way than this and so we formed this. So that's a great case study. Because, again, if I were to tell you before Dave, hey, a great case study. Because, again, if I were to tell you before Dave, hey, there's patents on used car sales, you'd think I'm crazy. But there is, and there's a lot of them out there. So that's a great example of that. And then, in terms of other folks just clients of signing up, how that works, sure, there's one. I'll give a more traditional role. They do they sell software, partially as a reseller of software and partially their own, and they have different process workflows that they have. They realize the value. I talked with these folks. They realize the value of our services and, fairly straightforward, just what I mentioned, which is you look, we sit down and say how do you earn your revenue, how do you make your money, what does your workflow look like? And you get a license in place relatively quickly. That only takes a license after we understand how the business works. It really only takes if the client's ready a day. It's very simple to have that we have, you know, our licenses we like to use. It's very simple to put one of these up and running, and so that was great. And then they also realized the value of the life insurance. And now that of course takes a little longer but the two can be done separately. We can get the license in place first and then let the process play out for the life insurance piece, because of course there's some underwriting for our client there personally to do and I should mention, there's at the same time depending on the carrier and provider. You know cause. Sometimes the question is well, what if I can't get insurance? Excuse me, there's actually ways, there's actually carriers that you can insure different groups and the like and still receive the benefit of some of those insurance things like cash value and the like that they might care about. You don't get all the benefits, but you can get some of the value still out of it. So you know, that wasn't this instance, the folks are going through the underwriting, no problem, but that's out there. So that's a fairly straightforward situation. Dave: Now, you're probably not going to like this question, but I'm going to ask it anyway, In this hypothetical example of the 10 companies in this one niche, and you're talking to one of them and they think might this be a strategy for me to weaken my other nine competitors? Might I be a little patent trollish, like, but this is at least a legitimate operating company and the patents that we would be seeking to enforce, I mean, actually revolve around our business. They're not the non. What did you call the patent trolls? Non-operating entities. Andy: Yeah, non-practicing entities Sure. Dave: So if somebody did that and let's just say they didn't even have the conversation, or a year into it, this idea suddenly strikes them and they get an aggressive attorney and they start suing these other folks. Is that a problem on your end, or whether they use their service offensively or defensively? Are you neutral to? Andy: that. So if they're a client and they come to us and say, hey, we want to use the patents offensively, we'd have to look at it and really think it might be best to even just sell them the patents at that point. So there's different ways. Yeah, we would talk with the client and understand their goals as to why they need it or otherwise, because, again, that's a competitive position. You know, it's obviously like in the example I gave with used car sales. The one company felt strong enough that they wanted to sue another used car sales company because maybe, it's you know, they're gaining market share or a whole bunch of reasons why companies might use patents, right. So you know, that's really a conversation we'd have to have with the client to understand is this the best way? Is this what you need for your goals? And then we'll kind of help them out as best as possible. Dave: Yeah, and especially with the Department of Labor. I think it was the Department of Labor that basically invalidated non-competes. So it could be, if this competitor is very good at stealing their top car sales people and they can't really use a non-compete to stop that any longer, maybe this would be another way to shut that off. Andy: Yeah, it could. I mean, these are kind of case-by-case examples that you want to really talk with the client. But yeah, that's correct. Especially it would be one where maybe they've stolen the IP that you have, they're implementing it in their system or whatever. Then you know, you really that's something that you, that's what patents are for, right, that's what we're here for. So we want to have that conversation, we want to talk with them and work with them to help our clients. Dave: What do you enjoy most about what you're doing now with Patent Veritas and your role within the company? What do you enjoy most? Andy: and a lot of money. And it's neat to see a lot of these folks grew the business from the ground up. Most of our clients are so. They started their businesses and have grown it the entire time, and in a whole bunch, like I said, everything from restaurants all the way to really complicated software that just boggles the mind when you look at it. But every single person is interesting because they all have some insight into their work that really has allowed them to be successful. And it's neat working with people like that. It's really a privilege. It's really fun because you learn something and you say why didn't I think of that? But then we're able to help them out and really help their business, protect their business with this and then help them personally as well, right With some of their estate planning, their tax and estate planning, with some of these insurance needs. So it's pretty cool to combine all that together. And it's never a dull day On the patent side, even you know, when we're out there in the market bird dogging and trying to buy patents, it's always interesting because you know you're always learning something off the patents themselves too. You get to read through those and kind of see is this something that's going to work for us, is it not? And you know, have the team kind of weigh in on all that, and that's a lot of fun too. So it's a really neat. It's a really neat business. It's every day is a little different. Every company definitely is a little different and every client's a little different, so it's always kind of cool. There's no, it's not a cookie cutter business where every day we're just like, okay, I mean, we have a nice workflow to get folks signed up, but it's always interesting to meet them and to learn more about what they do, like everything from the used car sales guys to, you know, the more traditional software folks and guys that manufacture, you know, boats. Dave: So it's kind of cool to just see like I can appreciate it, because that's really what I love about my role. You know, with my companies I'm working with the same type of clients. You are Mine just are in a niche where they export at least a portion of their product, and I love working with those folks because you know they're the lifeblood of our economy. You know there's just a, they're dynamic, you know ambitious, they're visionaries, they're successful. I mean just. You know there's a saying that you're the average of the five people you spend the most time with, and I can think of no better group of five people to spend the most time with than successful entrepreneurs. So I love that as well. Andy: It really is the best. I mean people I tell other, my friends or whatever, and I'm like it's pretty, it's just pretty cool, it's inspiring, like you said, just to be around these folks and to and then be able to help them. It's kind of neat Like hey, we're able to help your business just a little bit be more successful. That's pretty cool, it's a real privilege. Dave: Sure, Okay. So then that's the one side, that's the part you like some of the things your clients tell you. You know, like, once they become a client, you know they've started working with you. What are the things they tell you that they say that they really like working with your firm? What do they tell you makes your firm special and unique? Andy: You know, I we've been told a couple of different things. One is we're very, we're very hardworking. We're always working on their behalf, always going hard for them. That's always good, available. You know, we're very available to call folks like that and punctual, and also just actually had a nice award and they said you know, we treat people with respect and so it's. I think that's a big deal nowadays especially, so that's a wonderful thing. So folks like that as well, just I guess it's just we're hardworking, put our nose down for them and treat the folks with respect and be there for them. I think that's what I've heard. Dave: So that's great. That is great. Well, as we wrap up, I have three more questions. One is if somebody wants to reach out to you to explore the services, what's the best way for them to reach you? Linkedin, call you, email you. Andy: You know, email is always good, or a phone call, or LinkedIn, any of those. Dave: So I'll give you all three, yeah, the LinkedIn we'll put in the show notes so they'll have access to that. So what's the email? Andy: Sure, it's ahin ahein@patentveritas.com P-A-T-E-N-T-V-E-R-I-T-A-S.com, and then you can also phone. If you're so inclined to give a call, you can do so. It's oh geez, I just blanked that number because I don't call my own number. Dave: I know. Andy: But I'll give you another one 312-371-6578 is a direct number for me, so you can call that as well. Dave: It's kind of funny. I don't call myself, so I hear you Okay. Well, that's one of the three questions. The second one is there anything I didn't ask you that you wish I had? Andy: No, I think we covered a lot of information, so this is great. I'm sure I'll think about that an hour from now, but no. I think it's good Okay. Dave: Well, the last one. It's kind of a fun one and it's a question you may be don't get asked every day. So if you could go back in time and give advice to your 25-year-old self, when you were graduating from law school, what advice might you give to yourself? Andy: Wow, those are always that's tough to look back. I'd say you know it's going to. It all works out It'll work out Some things that happen to you. You don't realize why they do, but then later on, looking back, you understand that needed to happen. So some really good things happen later. Dave: So it works out and just keep moving forward, I and Well, that sounds like great advice for anybody, not just your 25 year old self. So that is great. Well, andy, I and Well, that sounds like great advice for anybody, not just your 25 year old self. So that is great. Well, andy I, this has really been fun and I've learned a lot and I think our listeners and my clients could really benefit from from knowing your company. Oh, I guess. The one other question so if somebody is interested in your service, you know you can take the law you're out of the law firm, but can you take the law firm out of the attorney? Does the clock start ticking, you know, the moment they call you, or how does your process work there? Do you have an introductory conversation? That's complimentary, or what's your? Andy: We don't. I mean we don't charge by the hour or anything like that. So all of this is the upfront work is done, just upfront work, just to see. Is this a good client? Is this a the person we're talking with? Would this be a good client, right? Would we be a good fit for them? Are we going to be able to provide the value that I just talked about and we just talked about? Are we going to be able to provide that value for you? Occasionally, the answer is no, because the business might not support it, and so that's simple. But no, our fees come from the patent license. That's how we make our money, and so we want to make sure that this is the right person that we're working with, because the right person. We can provide value to that person, we can actually add to their business. So there's no hourly rate, there's no anything that you know just to understand their business and otherwise have plenty of conversations, and if we're not the good fit, we'll tell you it's not going to be good for anybody. So we let folks know. Dave: That is great. Well, andy, again, thank you so much for your time. This has really been fun and you know, being from the Midwest myself, I'm from another one of those. I states Iowa. I always joke that, even though I've been in Texas for 40 years, I always joke. People in the West or the South, they all think Iowa, idaho, ohio and Indiana are the same place. All those states that start with a vowel end with a vowel somewhere up in the Midwest. They think they're all like the same place. Andy: Yeah, I've been asked if I like to ski in Colorado before, even though it's about a 12-hour drive, which the answer is yes, but I don't get there too often Understood. Dave: Well, hey, thanks again, Andy, and I hope you have a great afternoon. Andy: Cool Thanks, Dave. Thanks for having me, really appreciate it. Special Guest: Andy Hein.

In today's episode of the IC-DISC show, I chat with Jane Howze, founder and managing director of executive search firm Alexander Group. Jane shares her remarkable transition from commercial lending and law into this male-dominated industry. Her insight into culture, growth, and talent acquisition provided invaluable counsel for aspiring leaders. We explore nuanced career shifts and hiring new teams, emphasizing integrity's strategic importance. Jane highlights fact-checking credentials for ethics and vetting, referencing a shocking case of credential fabrication. Our conversation sheds light on work evolutions, from mentorship changes to communication innovations over the years.   SHOW HIGHLIGHTS Jane Howze shares her career transition from a commercial lending officer and lawyer to the founder and managing director of the Alexander Group, a top retained executive search firm. We discuss the early challenges Jane faced in a male-dominated industry and her experiences at Korn Ferry, emphasizing her success in executive search. Jane and I reminisce about shared history at Korn Ferry, including nostalgic and entertaining stories from the early days of our careers. li>Jane emphasizes the importance of integrity during career transitions, particularly when handling professional references and avoiding misrepresentation. We touch on the strategic advantages of honesty and the repercussions of fabricating qualifications, as highlighted by a CEO's false claim of a computer science degree. The episode covers the evolution of workplace dynamics, mentorship, and the practical advice Jane offers for aspiring paid board members. Crazy industry tales are recounted, such as an adventure with a $700 car in LA and setting realistic client expectations in executive search scenarios. Jane provides insights into networking and career strategy, especially relevant during the Great Resignation and for those aiming for public company board positions. We explore Dave's innovative client communication strategies and the impact of networking, as well as the significance of crafting a board-specific resume. The episode concludes with a light-hearted exchange about "tours of duty" within a firm, comparing it to conscription, and reflects on the demanding but rewarding nature of our work experiences. Contact Details Email (jhowze@thealexandergroup.com) LinkedIn (https://www.linkedin.com/in/jhowze1950/) LINKSShow Notes Be a Guest About IC-DISC Alliance About The Alexander Group GUEST Jane HowzeAbout Jane TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, this is David Spray and welcome to another episode of the IC Disc Show. My guest today was a very special guest. Jane Howes is the founder and managing director of one of the world's top retained executive search firms, the Alexander Group. Jane was actually my boss two different times about 25 years ago. As we talked about on the episode, she was both the greatest boss I'd ever had and my least favorite boss I ever had, sometimes in the same day. Jane has a wealth of knowledge on all aspects of culture building all aspects of culture building, firm building, growing a firm, picking the right people. We also took some stories down memory lane back from the days we worked together and when the firm was very young. This episode has a lot of great information for any executive or business owner who has any hiring responsibilities. Finally, if you've ever considered becoming a board member, jane has some great insights and tips on how to start your career as a paid board member. I hope you enjoy this as much as I did. Jane, welcome to the podcast. Jane: Well, Dave, it's wonderful to be with you. Dave: This is so. I was so excited for this, so I think I've told you this before. Jane, you were my all-time favorite boss and my least favorite boss, sometimes in the same day. Jane: And probably sometimes within 10 minutes of each other right. Dave: Perhaps, but you're the only boss I ever had twice. So I had left. I was gone a couple of years and then I was in a spot where I needed some contract work. This was before Uber, so I couldn't just go start driving my car around and you all were gracious enough to have me come back and it was wonderful. But I just want to thank you for all the opportunities you've given me, all that you've taught me. I've learned. I learned so much about business, communication, ethics, client service, so that served me the rest of my career. So thank you, jane. Jane: Dave, when you came back the second time, I was like our ship has come in. Dave Spray is back for more punishment, more reward, and I just feel really honored that our paths have crossed, because you could have been a great, you were a great recruiter, could have and still could. Dave, You're the best. Dave: Well, that's very nice of you to say so. Yeah, I enjoyed a lot of my time at the firm, so where are you calling in from today? Jane: I am in our Houston office today. As you know, we have offices in California, new York and DC. As you know, we have offices in California, new York and DC, but I will work out of Houston until it gets too impossibly hot to work out of Houston, as you know, and we'll head west. Excellent, well, that sounds great. Dave: Now, are you a native Houstonian? Are you one of those rare people born here that lives here? Jane: No, what's the saying? I got here as soon as I could, but I am from Birmingham Alabama and went to college in Memphis, tennessee, and my roommate from college was Houstonian and back in the day, you know, the Galleria had just been built and Houston was just this huge boomtown and I was glad to come here back in the infancy almost. Dave: Wow, and what did you do for work when you got here? Jane: I worked as. Are your listeners mainly in Houston, or are they scattered all over? They're all over the country in Houston or are they scattered all over? They're all over the country. Yeah Well, I worked for the largest bank in Houston and I was a commercial lending officer and attended law school at night. And then the story goes I practiced law and I left Houston and went to California and practiced law and then came back. So you know, kind of roads lead back to Houston. Dave: Ultimately, Okay, and then what? Did you just like have a dream or a vision or something that you needed to leave the law business and get into executive search? What prompted that? Jane: Well, a lot of practicing law, as I'm sure your listeners know, a lot of it is very compliance oriented, very regulatory oriented, and I'm not a regulatory kind of person. And I had gone from being a commercial loan officer, where my job was to deal with people all day, to being stuck in a law library reading compliance regulations. Oh my goodness, this is not good, this is not my personality. And read an article in Fortune magazine about Korn Ferry, the largest executive search firm in the world, and it was like the proverbial bolt of lightning went off. Dave and I was oh my gosh, I would be fabulous at this. I need to go work for Korn Ferry. And they had an opening back in Houston. So I left the practice of law in California and joined Korn Ferry in Houston. Dave: Wow, and you were, and I'm guessing that you were one of many women at the firm. I'm sure, right, this was the 80s executive search. Jane: Let's see there were 200 partners and two women, and the minorities were all in the Hong Kong office. Dave: Okay, I mean diversity was achieved, but there were like six men in the Hong Kong office. Jane: Okay, I mean diversity was achieved, but there were like six men in the Hong Kong office and that is not a knock on Korn Ferry that the executive search business was oh, we want to give a CEO search to somebody we've served in the military with, or somebody that we go hunting with, or somebody on our bowling, you know that kind of thing, and women just weren't in that place then. So it was definitely an early time and a good time to get into executive search. In retrospect at the time it seemed a little challenging. Dave: And you. So how did it go, did you? Was it all you hoped it would be? Jane: You know, the minute I started recruiting I was happy I knew I had found my calling. Before I got into search, I had always been one of the people that said I'd love to introduce you to this person, I'd love to fix you up with this person, and so I finally got in a position that you got paid for it which is great by two partners from KPMG who wanted to do recruiting of C-suite positions for their KP clients, and K wouldn't let them do it. So they formed Korn Ferry, and so I was lucky. It was kind of the early days of Korn Ferry they were maybe 15 years old by the time I joined them and global, so it was a really great move to learn the search business. Dave: You weren't there too long, right Before you felt the need to unfurl your own wings. Jane: Yes, that is true. I was wow. There are not many women partners here and I know I'm good at this and I know I can be successful at this. So, dave, I hooked up with another woman at Corn Ferry and the other big search firm is Russell Reynolds and we were like, well, let's start our own search firm, and I don't know that I would have done it by myself. But we started, really got going in 19, which is 40 years ago now. I feel like I'm the oldest living person alive still doing it. But we started and back then you didn't have the internet to do research and our first client was Grant Thornton the public accounting firm and the number two person at Grant met us and we went walking in their offices and there were no women audit partners then, or tax partners, and we went strolling in and he goes. Well, I believe in you all and I want you to help me build the firm. I'm going to do acquisitions, I'm going to do partner searches, I'm going to do campus recruiting, and we rode along for over 50 searches and practice acquisitions in our first years, which made it really a great foundation upon which to build. Dave: Oh, that's awesome. That is awesome, and that's been 40 years ago. Jane: Yeah, Dave, I probably tried to recruit you back in the days you were at Arthur Anderson. You were probably one of my recruits, even not knowing it. Dave: Yeah, you never know, you never know. And one of the is that when you started, the billing by the hour approach, or did that come later. Did you do that from the beginning? Jane: We started because, having been with a law firm where you're basically selling your time, we thought, well, we're going to be a different kind of search firm, we're going to bill by the hour. And it proved to be a great thing. And, dave, we were so cheap that people would go, you'll do, you'll take over all our campus recruiting for $50 an hour. And we were like, oh great, well, here's 10 colleges we don't want to go. You guys go, just do our recruiting for probably 10, 12, 13 years, which made it challenging because not everybody wants to fill out timesheets to the 10th of an hour, which we were. Dave: Yeah, no, but I remember when we would talk to potential clients, that was part of the pitch and the fact that they could do we could do all a card search for them. It's wrong as the source candidates, you know, we would just do that. And the other thing I loved was the independence that gave, because I know there were times that right late in the search we had three finalists and they would say, hey, we identified somebody on our own, can we throw them into the mix? And of course we were very receptive because we were just paid by the hour, like we didn't care. Whereas I think a lot of other firms, especially if there was a success fee component you know, would be very resistant to that, so I always thought that was great. What caused you to move away from that? Jane: Just the cumbers of it or just the greater tendency to do fixed. But you know, we started out doing lower level positions and as we built our reputation we were, frankly, we were leaving. Frankly we were leaving. We weren't great timekeepers and we kind of thought, well, let's still provide a win for our clients Because the big search firms you are obligated to pay the fee. Even if they find their own candidate, you're obligated to pay the fee. So what we decided was we will do a fixed fee. We will tell the client at the beginning of the search this is what your fee is. So it's not really tied to the compensation but the complexity of the search. So, for example, if we were doing a search in Fargo, north Dakota, in December, that might be a harder search. You know, with the pain in the bottom 10% of compensation ranges, that might be a harder search than doing a search in December in Florida, for example, or with the time. So we just pivoted I think it was in 2001 that we'll give you a fixed fee for the search, but it will be less usually than a third of total comp. So even if you put your own candidate into the process, you're still paying for it, but you're paying for a process, not a candidate. So we still had a competitive advantage. And it's interesting. Here we are today, in 2024, and some of the other search firms are now doing what we do. Some of our biggest competitors are going. Well, we'll give you a fixed fee if the Alexander Group's giving you a fixed fee. So it's interesting how it's turned out. Dave: But you were a disruptor in a number of ways in the industry. Jane: I mean it didn't seem like it at the time but now that I see other firms doing the same thing to try and compete effectively, they don't want to. They'd rather just get a third. But one of the things we tell our clients when they retain us is for your budgeting purposes, you're going to know how much the fee is and we'll have no reason to present the most expensive candidates because our fee is already in your budget and we're just going to be on your side of the table trying to find the best person at the most cost-effective salary compensation package. So I think it's a win and it's something that has worked for the clients. And you know the thing that and I know you know this we said it when you were there and we still say it 85% of our business every year is the same people and we're really proud of that because most search firms their repeat business is 6%. And why is that? And you know we laugh and say, well, we have an unstable product. You know and you know there's so many things that can go wrong when you're dealing with people, but we try and provide very I want to say a really strong relationship focus. I mean I tell clients. I don't want to just see you one time. We want a long-term relationship with you and that's really important to us and I think it makes a difference and I think the clients feel like we really care about being part of their team and that's really important to us. Dave: Yeah, that's great and I did experience that, and life's just more fun when you have happy repeat customers and clients Instead of people you try to squeeze for every last dollar for one time transaction. Jane: And you're well. I hope we don't have to see each other again. Right, you know it's like no, we want to be around for the long haul and I know you know this because but our first client from Grant Thornton, who's now 88 years old, is still a friend and a client and a mentor of the firm and we wouldn't really have it any other way. That means a lot to us. Dave: You know, one of the most valuable lessons you taught me was when I went into your office after I worked there about a year and a half and I just said, jane, I don't think this is for me and I don't know what I'm going to do, but I just want to set expectations. And you said hey, as long as you continue to do good work, you can stay. You know, as long as you want, right, I mean, just keep doing good work. And then the other thing you told me do you remember what you told me? You said, and it was very, it was good advice, but it was also clever on your end too. What did you tell me? Jane: I told you, no one will remember the job that you did, but everyone will remember how you leave. Dave: Yep, yep, that's so true and it's such simple advice, right? Because you work someplace for years and then all you really have to do to even make up for mistakes you made is just end on a really high note, right, you could have been a average employee, but just end on a high note and they'll all say, oh yeah, that change, she was great. She was great. We loved having her around. Jane: No, I remember that Because I mean I tell people I was not the best lawyer in the world, but I left, left. Like how do I transition my clients? How do I help train the new person? Can I be available after I'm gone? If I need to come in on a Saturday to help out? And I tell people when I make speeches no one will. You could be really bad at your job, but you can be a good, a great departing employee if you aren't a current employee. And that is just so true. And you know today, you never know when you're going to need a reference. Today, with everything so transparent, even if you don't give somebody as a reference, people will look on LinkedIn and say, oh well, I'm going to call this person and see how Betty was as an employee. So you're going to be found out, good or bad. So you might as well be the best ex-employee you can possibly be. Dave: I love it. Yeah, I know one of the things we did when I was with the team was we would do reference checks, and I think we would oftentimes do them even before the offer was extended. I forget. I think we did it both ways. Sometimes we did it subject to reference checks, sometimes we did the references first and I was always surprised. Every so often you'd find out people lied on their resume or exaggerated. But I imagine with social media and such, that's probably all gone away, right, nobody tries to get away with that anymore, I suppose do they? Jane: You know, dave, it's really interesting. Somebody asked me the other day what surprises you the most. That happens today, that happened 20 years ago. And the answer is exactly as you say. People still try and fudge. They'll say, well, I received an MBA when they did the coursework but didn't write the final paper. Or they'll be credit short of a college degree. Just last month we weren't at the final stages. But we try and check educational background and someone had on their resume they had on their LinkedIn received a bachelor's degree. And we check and there's no bachelor's degree. And they say, oh well, but I was only four hours short and I go. But four hours short does not a degree make, and I'm always surprised that. And people will have maybe a year gap where they're unemployed. And it's okay with COVID and all the changes that we have all gone through as a country, as a business community, it's okay that you have gaps, but it's not okay to misrepresent the gaps and sometimes you'll have people go. Oh well, you know, it was during COVID, I'll just kind of fudge it a little bit. And you're always going to be found out almost every single time, and I'm always surprised that people still do it, though, but even at the highest levels, dave, they still do it Like even like at the C-suite level, you mean. Yeah, at the C-suite level. You know, I wrote an article as a commentator for MSNBC 10 years ago because the CEO of, I think, hp said he had a degree in computer science, but it was a degree in history, you know, which is a pretty big difference. And I wrote an article saying and this was even before the proliferation of social media 10 years ago and I said you will be found out. This guy did, and it was very public and it was he got fired from H. It was a big deal and I was like do not let it stand. If you fudged, go fix it, fess up. Dave: The irony was, if he was, you know, at that level, he probably had graduated at least 25 years earlier. So the irony was his degree had no nothing to do with his current level. Yeah, nobody cared, except that he lied about it. If somebody lies about something that can be checked. What are they lying about that can't be checked, right? Jane: Exactly Well. And the other thing is, when you think about somebody's personal branding, wouldn't it make a great story? Hey guys, I don't know. I had a history degree and look how good I am. I'm running HP now and I had to leave the hospital. But to say he had a computer science degree. I mean it made no sense. But people do that still and I always tell people I know some of your listeners are small businesses where they don't have huge departments but one of the most important things you can do is do background checks and reference checks, unofficial and official, because people they never will stop doing it and no matter how many commentators tell them don't do it, they do it. Dave: Well, you know, I guess it's time for me to go update my LinkedIn. For all these years, jane, I've been telling the world that I was the CEO of the Alexander Group and you worked for me, so I think I'd better go fix that before it backfires. Jane: Well, you know, people always say how did you get the name the Alexander Group? And we, truly the name Alexander kind of has a masculine kind of connotation and you know, even when you were with us, dave, we would get calls once a week going Mr Alexander, please, yeah, and so so. So I think you just, I think not only did you say you were CEO, I think your name you've been passing off your name is David Alexander, right. Dave: That could very well be and I learned so much about presentation because, you know, when I was there, a lot of the the recruiters were young, you know, fresh out of college. The recruiters were young, you know, fresh out of college, and you know you and John did a great job of mentoring these folks and developing them. But it was always so interesting that, you know, we had a pretty casual environment and back then you would leave a message for a candidate and they would call back the main switchboard. I don't know we've, I don't think we even had direct dial numbers back then and they'd call back and switchboard. I don't know, I don't think we even had direct dial numbers back then. And they'd call back and here's this scruffy 23-year-old unshaven guy wearing, you know, birkenstocks to work, named you know Tom, let's say. And when the person would call back and they'd say, yeah, tom Smith, please you train the receptionist to say, oh, hold on. May I ask Mr Smith, you know who's calling you? know, just to I mean there's no harm in saying Mr Smith because that is his name, but why say, oh yeah, let me see if Tommy Boy's you know done, you know done having his afternoon tequila shot, right, I mean there's no use in. Jane: No, it was all about. It was all about the, you know, because we were so small in Scruffy and the other thing we would do would be to say I'd train the receptionist to go never say Mr Smith is not at his desk. Dave: Right, he is not at his desk. Jane: Right, he is not in his office and I will have one of his assistants call you back. Dave: Nice, nice, one of them. I like that. Jane: I know, I mean, you know, I just am blushing, thinking about what we did to make ourselves sound substantial. And there's Tommy Smith back in the back office, sound asleep at his desk, you know. Dave: Exactly. Jane: And sometimes I go, oh well, and sometimes you know candidates would call back. Well, is Tommy Smith calling me? And if I happen to be at the office late at night, you know some of it is the smoke and mirrors of making yourself sound like you're Well, I remember when I would like when you or John would be like traveling. Dave: I would try to book the mother BD. Right, you're interviewing folks in Kansas City, what other companies are headquartered in Kansas City or just other things. And one of the things that the things I did that I learned a lot about this is that even though you and John were based in Houston, if I was trying to set up Houston appointments, I would act as if you and John were based in San Francisco, like I'd say oh, you know Miss Howes will be in, you know she'll be in Houston for two days next week. You know she'll. she won't be in the San Francisco office, she'll be in the Houston office for two days Now the reality is you were going to be there for two weeks, but you were going to be there for those two days and it was what's the biblical saying you can't be a prophet in your own homeland. And I think it's still true to this day that expert from out of town and they rearrange their schedule for the person from out of town. Jane: Well, you know, there's a Buddhist saying that says the visitor from afar brings knowledge and I like that. Dave: I like that. Jane: And you know, sometimes I get asked to talk to college students about how our young people, about how do you find jobs, and my clients, kids, want to know how do we find a job. And I don't I'm not a career counselor but what I tell them is the further like if you went to NYU, say you're going to have more success calling NYU alums in Houston trying to get them to help you than you will in New York City. If you're a University of Houston graduate and you're in San Francisco, there's probably only 20 of you in the whole town and all people are hardwired to help people who come from afar. If there's a limited population and it goes kind of with that thing of being unique, like you know how many people come from Houston to San Francisco for a meeting. 20 years ago I mean it happened, but it wasn't every day that a head of human resources got that phone call right. Dave: In my business that it's easier for me to get an appointment in Syracuse, New York, if I'm going to be up there for business anyway. It's easier to get that appointment than it is with somebody in Houston, Because in Houston they're just like I'm busy this week, you know. Call me next month, you know, because you're so available. It's just like it seems like if you're meeting somebody for dinner, the closer the restaurant, the more likely you are. The closer the restaurant, the more likely you are to be late, or the more likely I am to be late, because if I'm driving 30 minutes I'm going to allow 45 for traffic and stuff, but if it's three minutes away, I'm going to leave two minutes before the dinner and then exactly a stoplight pot ad and then the parking lot's full and yeah no, it is, but it is something about the further something is away. Jane: And I remember one of the ways I built up our and some of our first clients. Most of our first clients were California companies because California had more. They were more used to women in doing C-suite searches. But you know, I was in California every two weeks for probably 30 years and I would call and go well, I'm from Houston, I'm a woman-owned search firm, I'm going to be in LA, can I come see you? And we got a lot of great clients like Wells Fargo, warner Brothers, yeah, a lot of McKesson company, because they were like oh, the visitor from afar they're coming to, they're coming from Houston and they're women in the search business Great, they're coming from Houston and they're women in the search business Great, you know. And I I spent a lot of time where people would go well, I have time tomorrow morning at 11 o'clock and I'm going to be there. And I quickly hung up the phone and called United and called Continental Airlines and started booking that airline ticket as fast as I could. Dave: Yeah, I do remember my listeners love stories. What are some stories of just interesting or amusing or candidate screw up things that come to mind where, yeah, I don't know a candidate showed up intoxicated or a candidate showed up and forgot to put pants on that day, you know. I don't know a candidate showed up intoxicated, or a candidate showed up and forgot to put pants on that day. Jane: You know, I remember way back in the early days one of my first big searches was a senior lending officer for a regional bank here and the candidate was great and it was. I was so excited and so I called the CEO of the bank after the interview and I said Rex, how did the interview go? He goes, jane, he didn't come. I said he didn't come. What the hell? Why didn't he come? He said, oh, it was okay. He drove through the teller window and passed a note to the teller to pass to me that he wouldn't. He changed his mind, you know, and you just go, who drives through the go in for the interview but drives through and says will you give this note, handwritten note on a scrap of paper I'm not coming. And so that was kind of the early days. A second story, and I mean it's crazy what we did back in the early days but one client wanted us to live in LA and take over all their staffing for it. This is when we were hourly billing and we were pretty cheap and they said, yeah, we'll get your room at the Biltmore Hotel in downtown LA. We want you there for a month and we're trying to figure out how to save money, because back then, you know, we just wanted to be and so we bought Dave a $700 car so we wouldn't have rental car charges, and we called it the gray ghost. It was a delta 80 and we drove this car and I am embarrassed to tell you, and I hope your listeners will think we were really creative rather than really cheesy but when we were done with the car, when we finished the search and the client actually is still a client in other iterations we just left the car at a Friday's Marina Del Rey and that was it, because it was on its last legs, you know, and we just that was it. We just left the keys in the car and that was it. Dave: That was it. We just left the keys in the car and that was it. You know you reminded me of something. A good friend of mine owes you his job because you just reminded me of something and I know I learned this from you. So it's really good friend of mine. Cpa, a classic, stereotypical CPA, introverted, not very outgoing but very technically sound, and he was working at a public accounting firm and he was kind of stuck at the senior level. He couldn't get promoted to manager, which usually happens after like five years. And there's a firm in town that I knew a guy there and they were looking for like a first year audit manager. So he was perfect for it. Looking for like a first year audit manager, so he was perfect for it. And so the three of us met for a drink at Papa Do's on Westheimer, over in the Galleria. But I told him ahead of time. I said Pete, he is. I'm just going to tell you right now, he's not Mr Personality. If you're looking for a glad handing, you know, outgoing salesman type, he's not the right guy for you. And so, of course, what did he say? No, we're not looking for a salesman, we're looking for a manager, right, somebody technically solid. So we met and afterwards we had a good time. And afterwards I said so what'd you think? And he said I'm glad you told me that he wasn't Mr Personality, because I was kind of prepared for it. And he did the same thing when they met with the people at the firm. He told them on the front end hey, this guy's not Mr Personality, but he's really smart. I think he can do the job. And 30 years later he's a senior partner at this Houston CPA firm and I know I learned that line from you. Now let me just tell you this person's not Mr Personality. Does that sound like something you might've said for? Jane: Yeah, well, you know what I mean. Part of what I look at a recruiter's job, an executive search person's job, is you tell the client what's wrong or what's missing, because they're smart and they're going to get it themselves. And if you tell them, you are adding value, you're being a consultant and you've managed expectations. So when we do a search, we write a paper, basically a report. These are the things that might not exactly fit, but these are the things that overcome what you are looking for. And which reminds me of one more story. I remember doing a audit partner search, for I think it was Grant Thornton up in St Louis and it was in Chicago actually, and so, as you recall, we would fly to the cities, park ourselves at a hotel restaurant and just sit there and make that our office. It was pretty soon, and so I got to O'Hare sitting down and my 3 o'clock appointment comes up at one o'clock and I go buddy, you're here a little bit early. He said, oh, yeah, yeah, I've heard great things about the Alexander group and I'm just going to sit at this next table and watch you in action. And I'm like, well, buddy, that's just not going, not gonna. And mentally I'm thinking well, buddy is no longer a candidate, but he wanted to sit and listen in on every other interview so he could get some good tips of how to interview himself, and anyway not a bad idea if he had just simply kept that information to himself. Right and not done it when I'd already started the interview. You know, I mean, I kind of lost two candidates right in one sitting. You know, you can't make this stuff up. Dave: That is something. I got a question somewhat related to search. Some of this conversation is about executive search. Right, we probably should have at least maybe a third of it about search. What about board members? So you know, I've got clients who ran, built, ran, sold $50 million revenue successful privately held companies, sold $50 million revenue, successful privately held companies. And they maybe think, yeah, I might like to be serve on a board. Now for somebody to be on a public company board do they need public company experience? Jane: You know, Dave, I think the question as I'm kind of rounding third base in my career and a lot of my peers are in their 60s and they're finishing, They've sold their private company, they retired from a public company. They, for whatever reason, they say well, you know, I'm going to retire, I'm going to, I want to be on a board. Can I get on a board? My answer is always this yes. However, it's a question of how much time do you want to spend to get on your first board? Once you get on one board, even if you're a private company executive, can you get on a public board, Asterisk, if you're willing to really work hard on at that. The average board tenure is 10 years. Board positions don't really turn over that much of a healthy company. So people get on a board and especially if it's a public board, there's incentive comp, there's options. It's not a hard gig for a lot of companies. So the answer is yes. And then what do you do if you want to get on a board? If you want to get on a board? Probably 70 percent of all board positions are not gotten through search firms. Does that surprise you? Dave: Maybe, yeah, maybe some. It's the network, the network of the other board members. Jane: Yeah, yeah, because people will say, oh well, I know somebody I'm going to, I'll go back to my UT alum group and see if they, you know, kind of knows around there. Or I'll see if, oh, I know a guy that works at Goldman Sachs, Maybe he knows somebody. I know a friend that's a part retiring from Ernst Young and I'll ask her. And so there's a lot of you know, with the call for diversity, search firms are becoming more involved but and doing more and 30% is still a lot to be putting out to search. But so the things that if any of your listeners are interested, I tell people, If any of your listeners are interested, I tell people, do a board resume. A board resume is different than a job resume. It's talking about your experience assessing risk, building a company, governance compliance, things that a board member would look at, governance compliance things that a board member would look at and the board members not looking at the details of you know, do you get two weeks or three weeks for vacation? They're looking at what's our strategic plan, the being the boss of the ceo, representing shareholders. So you want a board, one page board resume that talks about what you've done. That would be analogous to that. And then you really want to get on. A not-for-profit board Helps because, especially if it's big enough, there will be other corporate people there and you will make contacts. But it's really about making contacts. A lot of investment banks they don't use search firms when they take a company public. They have databases, they go through their contacts. Bankers know people. It's all about the three sources. I would say. If any of your listeners are saying I want to be on a board one day, do you know anybody in investment banking, private equity, public accounting, M&A law firms anybody like that and tell everybody you're looking for those recommendations. And then the last thing is a lot of your listeners are successful people who've had roles in companies that are entrepreneurial in nature, and a lot of them I know people that have taught an entrepreneurship class or a lecturer at Rice University here. And there's a lot of smart kids who are starting businesses. Let's not forget Google, Facebook, some of these companies that started from college kids, and I think that's a great avenue to think about when, if you're thinking about ways to get on a board. Dave: I like it. That's really cool. Well, speaking of rounding third base, I can't believe how the time has flown by. I have just a couple other questions for you. One is I've heard about this great resignation. For you One is I've heard about this great resignation. What has been your experience? Is this trickled up to the C-suite and the board level, or is this a problem that those people are having to deal with? People lower in the organization? Tell me about the great resignation from your perspective. Jane: Well, one thing hasn't changed. If you look at CEOs of Fortune 500 companies that are recruited from the outside, I would say they have a 50% chance of being there two to three years out. And why is that? Culture fit so the top. You will always have CEO changes, especially if they come from outside and they don't fit with the culture. What I think we are seeing and we see from our clients is post-COVID. There's been so many obvious changes but a lot of things that aren't obvious. People don't want to relocate as much as they might have pre-COVID. Why is that? Well, covid scared people in terms of my parents I've got to take care of my parents, I may have to have my kids at home for high school, and do I want to go to someplace new and have something like that happen? So I think you're having that we're coming out of. But you're also having middle range employees who aren't as loyal, and you know I always tease that a lot of the younger people today. If they have a bad Monday, they may be somebody someplace else by Friday. So I think there's not quite that dickiness of what you grew up with and I grew up with. Hey, you know we want to. You know we don't want to be a quote job hopper and I think people today don't care if they're job hoppers quite as much. And there's not that people are more willing. I think in COVID accentuated that where they're more willing to take risk. And, you know, maybe I'll be without a job for a month, two months, and yeah, I think we're seeing that. And what I tell small businesses that you know be focusing on long how do you make a culture that will keep people invested long term? And there've been a lot written on that and it's different for every company depending on where your location is and what your employee mix. But I think that's a really important thing that everybody's got to do in a bigger way. And also, lastly, dave, the emphasis on mental health, something that has changed dramatically in the last three years, where you know we've got to take care of people financially. And also, how are they doing? Because so many people were isolated during COVID and had mental health issues and people talk about that more, which we never did back in the day. You just bucked it up and, you know, kept making those source calls, dave, you know. Dave: For every six you made, you got to check off a tenth of an hour of work. Jane: Exactly. You had to make a left message with 10 people to get that six. I had it backwards. Dave: It was even harder than I remembered. That's why you get so excited if somebody answered the phone because that, even if you only talk 30 seconds, you got to put them down as a yeah, no, that's right they go no, I'm not interested and you go, that's OK. Jane: Awesome, ten minutes ahead here. Dave: That is great. So so I think the two questions left, so one. Is there anything that I did not ask you that you wish I had? Is there anything we did not talk about that you think we should have? Jane: No, you're a really good interviewer, Dave, which? Dave: I learned it from you. I learned it starts with interviewing candidates and it translates to other things. Jane: Well, I'm, you know, I'm really honored to be here, dave, because the people that you serve and that you do work for. I think it is much harder to run a smaller private company than it is a big company, because you've got to have employees who are multifaceted, You've got to have employees who have an entrepreneurial mindset, you've got to have employees who have an entrepreneurial mindset. So my hat is off to the work you do the clients that you serve, because it is a hard business. Dave: Well, I appreciate that. I love serving entrepreneurs, that is for sure. So here's the last question. This is a curveball one you may remember. When you asked if you need to do any preparation, I said no, we're just going to talk about your life story and you don't need any prep. But I promise you one curveball, and here it is. Are you ready? If you could go back in time and give advice to your 25 or 28 year old self, what advice might you give yourself? Jane: Yeah, oh, that is a great. That is a great question. Don't sweat the small stuff and it's all small stuff. Dave: Okay. Jane: And the things that you worry about about 90% of them do not materialize. Dave: Was that? Was it Mark Twain or Will Rogers? I always get their two quotes conflated. But one of them said I'm an old man, man, and in my life I've known a great many. I've known a great many difficulties, most of which never came to pass, or something to that effect yes, that's right. Jane: And Mark Twain, as you will recall from our time together, said I didn't have time to write a short story, so I wrote a long story, right? Dave: Exactly. Yeah, I learned a lot about incise writing and just I'm always amazed that people that just the simplest stuff that I never picked up in English class. Like you know, bob is a person who does XYZ, he's not. It's not Bob that does something, it's Bob. Bob's not a that, he's a who. Jane: That's, that's right and word choice, and. But you know I, you know I sound like a geezer, but you know stuff like that is. I mean a lot of people today really don't know that. I mean even you know I see at the executive ranks a lot of people who, who just, and you know, I think one of the things when I talk to people early in their career is learn to write, learn business writing out there. I mean especially now with Zoom and you can do business with people by email A lot of people. And if I get a resume from somebody that doesn't spell check or anything else. Dave, one final story, and it's so good and it reminds me. It does remind me of you for obvious reasons, but I don't know if you remember that we sent a letter out one time when you joined, maybe when you rejoined us, and we said Dave is from you know, arthur Anderson, a leading public accounting firm, but we left out the L of public. Do you remember that? Dave: I remember that does sound familiar. I remember somebody saying well, I don't know what it is, but we want some right, that's funny because, yeah, when you send out as many, as much written correspondence as the firm has for so long, it can't try as you might, it can't all be perfect. Just like I'm amazed when I read, like a bestselling book that sold 20 million copies and you find a typo. You're like but you know, when I talked to an author about that they said, yeah, there's, you know, 100,000 words in here, like you, just sometimes they slip through the cracks. Jane: Well, Dave, I the thing I remember about you and I always feel like I can learn something from everybody, even though there's an you're younger than I am. But even back when you were really young and with us, you were so effective at client communication and getting business. And do you remember that? You are the ones that taught us that people are hardwired to want to help, but you have to give them a way to help you. And you would come up with a list, Like, do you know people from any of these five companies? And people would look at and go, oh yeah, I can help you, I do know somebody from here. And what a great way to teach someone how to develop their own clients as to teach the client how to help the potential client or source how to help them. Dave: Well, that's one of the benefits of being a bad employee who changed jobs every year is I was exposed to a lot of things. I learned that in the financial services business and what made it so powerful was because in the financial services business you're always trying to get you know referrals to folks and if you just say, hey, jane, you know who, do you know who's looking to buy life insurance, probably nobody comes to mind. Nobody, because nobody's come up and said hey, I need life insurance. Do you know anyone? But what I learned in that is still helpful today. But instead, if you give somebody a list of 10 people and you say, jane, I'm going to be calling these 10 people next week, I'm just curious, can you tell me, is there anyone on this list you think's particularly great or you think really highly of? And they'd say, oh sure, let me borrow your pen. They check off the before names, you're like great. And then I would say, hey, by chance, if you happen to talk to them before next week, will you tell them I'm going to call them and they, of course, would say, sure, I haven't talked to this guy. I went to law school in five years. It's unlikely I'm going to talk to him this week, but sure, I'll tell him, okay. And then, finally, jane, when I talked to John Lamar, is it appropriate to mention that you know that we had a conversation? You know that he came up in conversation? Sure, yeah, no problem. So then, when I would call the person, it was so easy. Hey, john Lamar, by chance did Jane Howes tell you I'd be calling? No, how's Jane doing? I haven't seen her since law school. Boy, she's really wonderful, I like Jane. And so, yeah, you know Jane. Huh, yeah, I haven't known her a long time. I haven't known her as long as I've known you. Meaning I've met her for 10 minutes, but all of my dealings with her were first rate, all of them. And then just say, hey, you know, jane had some nice things to say about you and she thought we might benefit from knowing meeting one another. You know, know, when are you? It was amazing how well that. But it all started with just having a list to start with, because there's a difference between if somebody like, let's say, that conversation went poorly and john lamar called you back and said, hey, why'd you have? that dave spray guy call me. Well, if you can say, I didn't tell him to call you. He already had your name. He was going to call you anyway he just asked me. Jane: Anyway, great guy, yeah right. Dave: He just wanted to know if you were a jerk or not. And apparently I was wrong because you're gonna give me a hard time. All I did was say you were a nice guy and and now you're giving me a hard time, but yeah and and dave. Jane: What I remember the funny thing was john lamar are my 30 year partner. He went to a meeting with you and he said jane, dave pulled out the list. And I said he pulled out the list. And he said yes, and it worked and we just like we were so nervous about the list. But, Dave, it really worked. Dave: It is funny. And the irony is, the time you pull the list out is when the meeting doesn't go well. You know, like it's a brief meeting and they're like no, my best man at my wedding is a partner at Horn Fairy. That's where all of our search goes. We'll never give it to anyone else. Well, now you have nothing to lose by pulling out the list. I mean, if they on the spot want to sign you up for some searches, well, just keep the list in your pocket. But and the irony was the worse the meeting goes, the more helpful. Jane: They would seem to be right because they kind of feel bad that you flew away from houston. Dave: You flew all the way from houston out to see them and they can't help you. So now, sure, I'll look at your list. I'll give you some. Jane: But it's true, the list, dave, I mean that is a course in business development and we were like God, that list is not going to work. But it works, it absolutely does. Dave: Well, and you know when I first used that this shows what how I approach business development when I was in the financial services business right at Arthur Anderson attorneys were my best prospects. So this was like 1990, excel hadn't even been invented, they were using Lotus one, two, three. And I bought the Martindale Hubble legal director. You remember this thing? The blue, yeah. Maybe it was an yeah, but it was a blue thing and what I did that I was so proud of myself. I went through that and I created a spreadsheet and I knew one attorney in Houston and he was like a second year attorney at some place and he went to U of H and I played basketball with him and I went and I had lunch with him and I pulled out the graduates from like the top 20 law firms in Houston and I'm sorted by year in college. So the first list I gave him was all of the people who graduated from law school, the ones in his start class. And then I gave him a list of all the other U of H grads who were like a couple of years older to a year younger Same thing, who do you know? And then I made the call to them and then, jane, it got to be so crazy. I would go to like V&E and I would be there like I'd have like 12 meetings in a row, like, and they would literally walk me from one office to the next and they'd be like, hey, so who's next on your list? Oh, bob. Oh, he's a hoot, yeah, you'll enjoy meeting him. And so they would escort me into the office. It was like it was this introduction from one stranger to another one, but then the new person I would meet with. So you know, lauren introduced me to a guy who started with him that went to UT, so I would have all the other UT guys at his firm and at the other firms in town and it just exploded. Like in three or four months I was like the guy for all the third year attorneys at Baker Botts and V&E and Fulbright, but anyway, that is so fun, but it works, dave, and it's something you know. Jane: 15, 20 years later I still remember. Quote the list. Dave: Yeah, yeah, some great times. So, jane, thank you so much for not only inviting me to the 40th anniversary party that was just spectacular. Seeing some of my former colleagues, that was just great and just having the ability to be friends with you and your husband and John Lamar all these years is very special. I like to say there's only one ex-girlfriend I keep in touch with and there's only one ex-employer I keep in touch with, and that's you all when you are a VIP favored status. Jane: you work for us twice and we keep hoping that phone will ring the third time, dave, and it'll be the charm. Dave: Yeah, you never know. And I would jokingly say I did two tours of duty which you know doesn't really sound very complimentary to the firm. I must say, tour of duty has a certain negativity to it in a way, you know, conscription drafted. Jane: Yes, it's. At least it's not like prison sentence. You know I'll give you that. Dave: That is awesome. Well, Jane, I could talk all day to you. Thank you so much. I really appreciate everything. Jane: Oh, my pleasure, Dave. How much fun this has been. Dave: It has been have a great day. Jane: Thanks, Dave Bye. Special Guest: Jane Howze.

Intuit's Dave Raggio shares why SMB MediaLabs doesn't own inventory, how it prioritizes privacy for its customers, and the reason consumer and CPG brands are turning to Intuit's data.  Episode TranscriptPlease note, this transcript  may contain minor inconsistencies compared to the episode audio.[00:00:00] Damian: I'm Damian Fowler.[00:00:01] Ilyse: and I'm Ilyse Liffreing[00:00:02] Damian: and welcome to this edition of the current podcast.[00:00:05] Ilyse: This week, we're delighted to bring Dave Raggio to the podcast. Dave is the vice president of S& B Media Labs, a B2B media network owned by Intuit, which is of course known for business products like TurboTax, QuickBooks, Credit Karma, and MailChimp.[00:00:22] Damian: Now Dave developed the idea of SMB Media Lab, which leans on the first party data from the millions of people who use QuickBooks, and it provides small businesses with the intelligence they need to reach their customers across channels like audio and CTV.[00:00:38] Ilyse: We start out by asking Dave about the origins of S& D Media Labs.[00:00:42] : It really came from honestly my personal frustration, in trying to reach SMBs for my, what I'm calling my day job. So, I was hired four years ago, at Intuit to lead QuickBooks acquisition marketing. And I actually still hold that position today. Um, my entire career has [00:01:00] been consumer brand. So I was with North Face before this.[00:01:02] Um, spent a lot of time agency side, working on a variety of clients across CPG and e comm retail. And when I got to, into it, um, I tried to essentially apply the same data sources and tactics that worked very well for me in the, in the consumer world. And it was met very quickly with the reality that SMB data is very hard to find, and when you do find it, the accuracy is just not great.[00:01:28] So, you know, I have a friend, um, that works in the agency that me that at the top you have enterprise level data, which is pretty high quality at the bottom. You have your consumer data, which is abundant and high quality, but between there's a big void and that's pretty much where all S and B data lives.[00:01:49] Um, so it started off. Kind of, it's just a joke internally that I really wish there was a company like QuickBooks that I could partner with and [00:02:00] buy media through that would allow me to find not only the scale of audiences that Intuit has, but also the depth of knowledge about how those, how those businesses are operated and run.[00:02:10] And then that joke kind of became a realization that it is a need for other advertisers that Intuit could very much fill and very uniquely fill as well. Just considering kind of. The breadth and depth of information that we have, um, on, on our small business owners. Um, so that was the start of it. Um, but of course, you know, we wanted to make sure that we were doing it in a way that was beneficial to our customers, um, and done in a privacy safe way.[00:02:38] So that was kind of the start of the journey was just the realization that we had something that advertisers would be interested in, but we also wanted to make sure that it was something that benefited our customers as well.[00:02:47] Damian: That void that you talk about in the middle between enterprise level data and consumer data is quite surprising, isn't it? That there wasn't anything there for those small businesses. I know that 99 percent of all businesses are [00:03:00] SMBs. So that's a huge, uh, yeah, that's a, that's a huge amount of, uh, data that's not being used.[00:03:09] So was it a surprising moment when, when, when you go, when you saw that and you thought, Oh, this is an opportunity.[00:03:15] Dave: Yeah, I, you know, there are small pockets of data where you can get very narrow in, it's just not scalable. So that was the sort of challenge. So you can go to a lot of individual professional sites. But the reality is the world of media is not built around the business that you run, it's built around you as a person.[00:03:31] So stitching those two parameters together, because, you know, as QuickBooks growth, We're looking for specific types of business problems. And, you know, a lot of these small business owners are not active on professional networks. Um, if they have profiles there, they're not looking at them on a regular basis or updating them.[00:03:51] Um, so they, they kind of become. In the shadows, like the S and B part of the data and the targeting capabilities and the need state from the business that they [00:04:00] run sits behind their sort of consumer profiles. So I think it was a surprise when I first joined, but. Logically, after a little while, I was like, okay, that makes sense of why we're not able to find the business traits and qualities that we are able to.[00:04:18] Damian: Yeah, that makes sense. The[00:04:20] Ilyse: Now, how would you go about like describing the value of these small businesses and the data that their advertisers are trying to use to reach this audience?[00:04:31] Dave: Yeah, um, so great question. And there's, there's a couple of different layers of sort of knowledge that we have on our, on our customer base, and we're not unlocking all of those just yet. So we want to, again, going back to the want to do what's right by our customers, we want to make sure that. All the information that we're collecting is something that they would expect us to collect, that they have full control over their ability to participate in this, and that we're only partnering with advertisers that, um, you know, have the best [00:05:00] intent for, for our customers.[00:05:02] With that, uh, we are layering on top of ad buys, data that seems to already exist in the market, but is much more accurate. So that was one of the sort of uphill battles that we've had in the early stages of this. So things like industry, age, revenue, employee count, these are things that on the surface appear to exist in other third party data sources, but You know, again, being on the other side of the buying of this one, I see how wildly off some of those data sources can be and the assumptions that they have about a small business.[00:05:34] So what we're adding on to that is just a very, very, um, deterministic one to one knowledge and accuracy that didn't exist. So we eliminate a lot of waste that comes with using some of the other data providers or even just kind of doing broad market advertising. So that's kind of the main value prop.[00:05:54] That said, we are working with our legal and privacy team. And our [00:06:00] executive sponsor is actually the head of privacy. So that should tell everyone a little bit about how serious we're taking this. But we're also thinking about with our customers, what value can we add to them if we continue to go into what we're calling transactional type data, if we're able to go the next step deeper.[00:06:16] And the reason for that is every business. on the surface may look the same in an industry size employee count, but how they run their business could be very different. So if you're a construction company, that's in the same region as another construction company, roughly same revenue, roughly same employee count doesn't mean that you invest completely different in marketing.[00:06:37] And you may be, Think about your supply chain very differently. What that allows us to do is actually find need states for our customers and be able to pair them with the advertisers that might be able to serve, um, solutions for them in those needs states. And so that's kind of the next wave that we're working on.[00:06:52] It's something that we haven't done yet, but we're hoping to unlock for our advertisers.[00:06:57] Ilyse: Yeah, that's definitely a good example. [00:07:00] Um, I feel like, In a, such a new kind of company like this, and I know you refer to you guys as like a retail media network, although you're not exactly a retail media, um, so it's, it's, it's definitely hard to kind of describe, I would assume, to other B2B businesses exactly what to do and how your like first party data And you essentially use QuickBooks, um, primarily, right?[00:07:27] Um, how they can use that data to their advantage. Is there, like, another example that you can give how, um, advertiser would use your, your media network in order to, like, reach their audience? Heh[00:07:43] Dave: you mentioned that, that, you know, we've, we've been using the term retail media network, but we're, we're very much not a retail media network. So we do not have owned and operated inventory and that's by design. Um, you don't start a business because you're passionate about bookkeeping in most cases.[00:07:55] Um, so we're leaning into as a company, AI and, and, [00:08:00] um, automation to make sure that we're trying to reduce the amount of time that That a customer has to spend in our platforms in order to, um, to get their work done. So throwing ads in there will slow that down. It's not something that, you know, someone that's already paying for subscription would, would want to have that said, there are potentially ways that we've been looking at that. Provide additional value to that. That said by not having owned and operated, I think that we accidentally fell into what I'm calling kind of the next wave of retail media network. So we are more of an audience network that can be layered on to any part of your ad buy that's programmatic. So we have partnerships with the trade desk, with physio, with DV360, with meta, and we We are agnostic to inventory source.[00:08:44] We just allow the advertiser, whatever their KPIs are across the board to just get more efficient and more focused on just the right people. And that's been, um, again, slightly different than what most retail media networks are going, but attending a bunch of [00:09:00] conferences, that seems to be really the hot topic of your own and operated inventory is great.[00:09:04] It is the last. bottom, bottom, bottom of the funnel that you're able to, um, that you're able to really leverage. We are able to address full funnel campaigns with that audience targeting.[00:09:18] Damian: That's very interesting. What kind of advertisers in this space are keen to take advantage of this opportunity to reach these millions of small businesses?[00:09:29] Dave: Yeah, it's so that's been one of the larger surprising things when we started this up. So we built this assuming insurance, banking, credit cards, those would be the The sort of the very close in some of the software SAS providers. Um, that has been very true for us that that's where we're seeing a lot of interest, but we've had a lot of consumer brands coming to us.[00:09:48] There seems to be a wave of interest in small business as a segment for a lot of advertisers. So we've had one of the largest CPG brands approach us. I worked at Method for [00:10:00] a while, so I know firsthand that shipping a bottle of hand soap is very expensive, and it's only a 3 bottle of hand soap, but it's mostly water and fragile, so you're upside down in your e comm costs.[00:10:12] So the area where e comm works really well for CPG brands is concentrates in large formats, and the normal consumer do not want that. It is very profitable to go that direction. Um, so they reached out to us, same thing with one of the largest beverage companies reached out to us cause they want to be in more restaurants, more independent restaurants than the chain restaurants.[00:10:30] So it's been a little surprising across the board of, you know, who's really approached us. Um, and, and some of these non traditional sort of B2B, as you would think about it are really the ones that have a ton of interest.[00:10:42] Ilyse: yeah I must say. It seems like B2B is on like some kind of upward trending line right now. Um, we are seeing like a, an increase across like all channels, I feel like, maybe. Like, um, maybe that's due to like, I don't know, the rise of like [00:11:00] LinkedIn or like, um, just more businesses coming forward. And being created in general, maybe the pandemic even, I don't know, it's, it's curious because I do feel like even like channels like CTV, for instance, there's a lot more like B2B kind of marketing happening.[00:11:16] Is[00:11:16] Dave: Yeah. We're seeing the same thing and we're excited that we're kind of showing up at the right time for that. You know, I think our hypothesis on that is, um, very much correct. There was a small business boom during the pandemic, but a lot of advertisers I think have, have started to kind of run out of scale and saturation that they can have amongst the sort of consumer.[00:11:36] And this is an entirely new audience with tremendous spending power that you can talk about different products that you wouldn't want to put, you know, on a Super Bowl spot. You know, the CPG brand is not going to run a large format concentrate ad in the Super Bowl, but there's now a new path and a new audience that is kind of untapped.[00:11:54] And we're also seeing that also in the marketing space. So a lot of the major social networks and ad providers. [00:12:00] Their next target is all the S and B's because they've got so much share of wallet amongst the enterprise level brands that their, their next growth area is going to have to come from the long tail of S and B's.[00:12:10] Um, so we're happy because we truly feel like we are the most accurate and best way to reach those S and B's. Um, so we're, we're hoping that, that, you know, everything kind of comes together.[00:12:20] Damian: Is there a, is there some kind of nuance in terms of the channels that advertisers trying to reach businesses use versus, you know, more traditional, you might say consumer channels? I mean, they're obviously consumers. are also business owners and business owners are consumers. But is there a different sort of way that you're thinking or the advertisers are thinking about leveraging, um, the data that you're providing?[00:12:48] Dave: We've not seen that. So kind of going back to the challenge that brought this whole thing to life is that The the line between them as a small business owner and them is just a person [00:13:00] is almost indistinguishable between the two of those. So The nice thing is because it's programmatic wherever they happen to be We're able to find them and able to serve them relevant advertising at that point I think that Um, it really the, the majority of channel selection will come down to the objective of the campaign.[00:13:22] So we had a major global logistics company that was very focused on brand advertising and we were running them on connected TV with Vizio. We were running them on some digital video formats. We had another SaaS provider that was very focused on cost per leads. And we. Much heavier on the social and programmatic, uh, display side of things.[00:13:41] So it's really more of what's the objective dictates kind of the channel mix itself. But, um, in terms of are there subtle nuances or specific places we go? Not really. We kind of just follow, follow the sort of, um, friends that we're seeing with the, with those small business [00:14:00] owners.[00:14:00] Damian: Totally makes sense.[00:14:01] Ilyse: Now, you've described SMB MediaLabs as the next wave of retail networks, which is very interesting. I like that kind of quote right there. Um, you've also said it's like a more open network than some others. Can you describe why that is?[00:14:20] Dave: Yeah, so I would say we're not the next wave. I think that we are ahead and riding the next wave. So I don't say that we are defining it by any means, but, um, we were open in the fact that we're not relying on our own inventory. So we can go. Pretty much anywhere. Um, and if an advertiser comes to us and they have a specific DSP that they really want to work with, we can onboard those DSPs if they're not already in our network.[00:14:44] So a big part of our, of our product is really making sure that we have the largest breadth of inventory sources and partnerships available, that we can develop campaigns in partnership with the advertiser and the agencies that actually, um, can [00:15:00] span wherever they believe that their customers are, whatever their objectives are.[00:15:03] So that's, that's the open part. Of what we're doing. Um, and because of that also, like there's just easier capabilities for them to, to measure it because they're already using a lot of the DSPs and platforms that they're, they're using for their normal campaign. So we're not any sort of walled garden that has hidden metrics behind the scene, which I know is also, you know, a challenge for a lot of retail media networks as well.[00:15:26] Ilyse: That's awesome. How do you, going about your own advertising for this network, how are you basically scaling it?[00:15:34] Dave: Getting the word out and, uh, getting people to, uh, to, to try it. So we have had, um, I think we're, we're in, in month eight now, and we've had a number of large advertisers come in the data's, the data and the audience targeting is performing extremely well, that is something that, um, was a concern of mine going in that, you know, a, is there enough people that are interested in S and B's and we already [00:16:00] talked about how that, you know, You know, has been something that we've been able to check that box and say, yes, there is a ton of interest from advertisers across the board.[00:16:07] The second one was, have I convinced myself that our audience quality is as good as it is. Um, and the data that's come in as, as shown that it's, it's performing extremely well, both on brand metrics and on cost per action. So, uh, our goal right now is to just have as many conversations and just do as many tests as possible.[00:16:26] And let the advertiser see how well it performs comparatively to other things.[00:16:31] Damian: I guess the next question would be how well does it perform? You know, what kind of data insights are you getting back to provide to advertisers?[00:16:39] Dave: Yeah, so, uh, we are seeing so we've done some disco studies on brand ones, and we're seeing on average 30 to 40 percent increase in brand metrics, which is huge. That was not that's actually outside of what we anticipated and hoped for on that one. And I think probably the big one was when we've run some cost per lead campaigns for SAS [00:17:00] cloud service.[00:17:01] We cut their CPLs by 75%. So just eliminating the inaccuracy and focusing your spin on deterministic direct connections with those advertisers or with those, with those customers as has worked extremely well.[00:17:18] Damian: Yeah, that's a high fidelity audience. I, I, I like that phrase.[00:17:23] Damian: I guess we have to have a question about ai, right? We have to talk about ai.[00:17:44] Um, you know. In April, Intuit introduced an AI assistant to its core product. Products, I should say, um, in TurboTax. It's going to shorten the time to file taxes, credit karma, users [00:18:00] get personalized financial information advice, I should say, and users can generate marketing content in MailChimp. You know, how are you and SMB Media Labs using AI?[00:18:09] Yeah,[00:18:13] Dave: we built, we are a managed service. So we are doing the buys and executing for the time being. That is something that is very difficult to scale because for us it is kind of core to Google. Make sure that the, that the media that we're buying, not only is targeted, but it's performing.[00:18:29] So there's a lot of optimizations that we want to be able to make recommendations on and act on. Uh, it's hard to do that. You know, our goal is to have hundreds of advertisers. You can't optimize hundreds of advertisers. So there are tools that we are bringing on board that actually use AI to understand how the various campaigns are performing, are able to serve up some sort of triggered recommendations based off of that.[00:18:51] Um, and that allows our team to scale and really make sure that everything that we're doing is. hitting the benchmarks and exceeding the benchmarks that we want them to do [00:19:00] across all of our advertisers.[00:22:09] Damian: One question I guess from that is, you know, the actual marketing of the SMB, uh, the actual marketing of SMB MediaLabs, how do you think about that?[00:22:21] Dave: Uh, well, the marketing of SMB Media Labs is a lot of. Conversations like this. Um, so I'm a little bit on a podcast tour. I am, I'm going to be at Cannes. So we do have a space in the media link to a can where we're going to be having a number of meetings, speaking engagements. Um, it's, it is different enough that it does require a little bit of explanation and, you know, in full transparency, there's an added hurdle that as it stands now, we are a managed service.[00:22:45] So, um, it is. It adds complexity to what a traditional we are not doing the model where we just park our data and anyone can go and pull it like through a marketplace. We still have to control. And that's that's because we want to have the highest bar possible for how we [00:23:00] control our data. So it just takes more conversations.[00:23:03] But, uh, You know, we are doing some programmatic media buying and we're doing some digital out of home in the elevators of a lot of the major agencies in New York City. So we're, we're trying to really focus in on, on both the agencies and the advertisers that would be interested in something like this.[00:23:19] Damian: And that's it for this edition of The Current Podcast. We'll be back next week, so stay tuned.[00:23:24] Ilyse: The current podcast theme is by Love and Caliber. The current team includes Cat Vessey and Sydney Cairns.[00:23:30] Damian: And[00:23:30] remember I'm Damian.[00:23:32] Ilyse: I'm Elise.[00:23:33] Damian: And we'll see you next time. And if you like what you hear, please subscribe and leave us a review.[00:23:38] Also, tune in to our other podcast, The Current Report.

In today's episode of the IC-DISC show, I sit down with estate planning expert Jonathon Morrison. Listen in as he shares strategic guidance for business owners worth $10+ million on safeguarding wealth in the changing tax landscape. With the looming December 2025 deadline, Jonathon explains trust structures and exemptions that can freeze business value to minimize estate taxes. From revenue crunching to complex legislation, his expertise cuts through financial jargon. For those growing rapidly or concerned about legacy, this conversation provides nuanced counsel on leveraging sophisticated legal mechanisms.   SHOW HIGHLIGHTS Jonathon Morrison, an estate planning expert, discusses strategies for business owners to preserve their wealth and protect it from potential estate tax changes expected by December 31st, 2025. We examine the importance of proactive estate planning for business owners, especially those with assets ranging from $10 to $100 million, to minimize estate tax implications. Jonathon emphasizes the benefits of sophisticated trust structures that can 'freeze' a business's value for tax purposes while providing robust defense against unforeseen events. The conversation covers the urgency for business owners to engage in estate planning before the anticipated decrease in estate tax exemptions in 2026. We explore how transferring business ownership into special trusts can help business owners maintain control of their assets while reducing their taxable estate. A case study is presented, demonstrating how strategic valuation discounts and transferring minority interest to a gift trust can result in significant estate tax savings. Jonathon outlines his unique business model, which includes direct engagement with clients, flat fee structures, and comprehensive annual reviews, to provide personalized estate planning services. The episode touches on the financial benefits of estate planning, such as savings on estate taxes and protection of inheritances from creditors, lawsuits, and divorce. During the podcast, Jonathon shares his personal background, including his passion for car collecting and his roots in Arizona. We delve into the complexities of funding designs for gift trusts, stressing the importance of optimizing both the trust structure and the funding strategy for maximum effectiveness. Contact Details Email (jmorrison@frgalaw.com) LinkedIn (https://www.linkedin.com/in/jonathonmorrison/) LINKSShow Notes Be a Guest About IC-DISC Alliance About Frazer Ryan Goldberg and Arnold LLP GUEST Jonathon MorrisonAbout Jonathon TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hello, my name is David Spray and welcome to another episode of the IC Disc Show. My guest today is Jonathon Morrison, a senior partner at the law firm of Fraser Ryan Goldberg in Arnold. Jonathon is a highly specialized estate planning attorney for people with large estates, Jonathon has a unique approach and covers a variety of different strategies. I think the biggest takeaway is that if you believe in hyper-focused specialists and you own a privately held business, then Jonathon is probably the guy for you. We covered again a number of different strategies and the urgency of December 31st 2025, why that's so significant for estate tax planning and he also encouraged everybody to address this year rather than waiting until next year. I hope you enjoyed this episode as much as I did. Jonathon, welcome to the podcast. Jonathon: Thank you, David. Thanks for having me. Where are you? Dave: connecting from today. Jonathon: I'm down here in Scottsdale, arizona. I'm a senior partner with Frazier, ryan, goldberg and Arnold. We're the largest trust and estate firm in Arizona. I'm a senior partner focusing on advanced estate planning for large, complex estates. Dave: Awesome. So I know you went to Arizona undergrad. Are you from Arizona? Jonathon: Yeah, I grew up here, all 18 years of my life in the same house. I've got a nice-. Dave: You're like the only one. You're the only that's right, a lot of yeah. Jonathon: Yeah, so I went to U of A studied finance accounting, and then I went up to law school in San Francisco. I lived in the heart of the city for about 11 years and met my wife, and then we came back to raise kids here in 2015. So I've got a six-year-old Jack and a three-year-old Rose. Dave: That's awesome, and I love Scottsdale. I go there every January for the Barrett-Jackson auctions. I always enjoy being there. Jonathon: Well, you probably saw my bio I am a car enthusiast, collector, track driver. Oh, I didn't realize. I didn't realize that. I know cars are like kids, you can't really have a favorite. But if you did have a favorite, what's your favorite? Over the years I've had a lot of cars, but I primarily drive and collect bmws, porsches and ferraris. Dave: Okay, yeah do you have a 2002? Jonathon: no, I don't have a classic 2002, mostly modern stuff. Okay, all the modern sort of m2s, m3s. I usually I only have about three or four cars at a time, unlike a lot of guys, but I swap them every six, twelve months I'm changing them in and out understood, so I drove a tesla model s plaid three years ago and my enthusiasm for gasoline engine just kind of went away. Dave: I always said I was brand agnostic and powertrain agnostic. So at one point I had the Tesla Model S Plaid, I had a Camaro ZL1 convertible six speed and I had a Jeep diesel Grand Cherokee which I had a special order to get the three liter diesel. So I'm like three brands, three propulsion types, but I'm down to actually one vehicle for the first time in a long time, a Rivian R1S, which is by far the best vehicle I've ever owned. My biggest concern with them is just whether they're going to be in business in another year or not. Jonathon: Right, right. It's like Fisker they keep coming in and out and I just saw news today they're not doing well. Yeah, I've never driven the Plaid, although my one of my Ferraris is faster than that Plaid, believe it or not? Oh wow. Dave: That's great. Well, we'll have to talk about it more and I'll be sure to look you up next January on Scottsdale, please do so. We're going to talk about estate planning and I know enough to be dangerous. My listeners and clients are privately held business owners with enterprise values between probably $10 and $100 million. The business represents the majority of their net worth and I understand there's some things going on that have some deadlines that create some urgency, so why don't we get into it? So just start wherever you want to. Jonathon: Sure, yeah. So those clients are really my clients, mid-market business owners for the most part. My practice, again, we call it advanced estate planning. What that means is the net worth, including business real estate, is high enough to warrant planning beyond just the will and living trust, powers of attorney, the core estate documents that everybody needs. Once you get to a certain wealth level or income level, then you need to start focusing on advanced planning, which encompasses we joke all the acronym planning, all of those acronyms you hear about in the estate and gift world. So for mid-market business owners, right now generally you're looking at $10 million minimum enterprise value. That warrants a good look at estate planning. We have the urgency at this point it's not as urgent quite yet which is the time to catch us because there's a limited number of Jonathon Morrisons in any state other than, you know, california I practiced up in Silicon Valley for about a decade or Manhattan you know there's about 50 of us, but in most of the smaller any other state there's maybe five, maybe that really you know, do this day in and day out. It's like a heart surgery. I've done this over 500 times transactions, design, implementation, and you've got to have at least 200, 250 reps before you really know what you're doing, mastering the vehicles themselves and then being able to distill it and communicate it to clients and be able to then get it done very quickly without you know. Business owners they hate this stuff. This is complex, it's annoying. They don't want to talk about death and taxes. They want us to operate their business. So I've done a very unique model that we can get into a little bit. I wanted to focus on the urgency, but a very unique model that's really custom tailored for busy business owners that need to get this done quickly, with high quality and low stress. But the urgency back to the urgency. So I think most of your listeners probably know that the 2017 Tax Cuts and Jobs Act, the Trump tax reform, is going to expire or sunset as of January 1st 2026. Dave: Okay, Less than two years. Jonathon: Yeah, yeah. So you know a year and nine months and as part of that, in the estate planning world, really the biggest change, perhaps the only significant change, is the reduction in the federal gift and estate tax exemptions. Okay, what are those? Well, right now there are all-time highs, okay, there are all-time highs, okay. Right now you can gift during life or at death up to $13.5 million if you're single, without any gift or estate tax. Or if you're married, you can give to about $27.2 during life or at death, and above that, if you go over that, there's a 40% gift tax. If you gift during life or at death, a 40% inheritance tax paid by your children, and so that exemption amount is scheduled to be cut in half on January 1st 2026. We don't know quite yet the number. It's probably going to be somewhere around 7 million for a single and 14 million for a married couple. So significant amount less that you can gift to individuals children, grandchildren, anybody else in 2026, unless you lock in that exemption before then. So upon so. Let me just interject one second. Dave: So just understanding numbers that I do. If you consider a population one, everybody within a state over 27 million is group one and group two is everybody between 13 and 27 million of a state size. I'm guessing that group two is probably way larger than group one, even though on absolute dollars there's folks from 26 million all the way to billions. But I'm guessing is that assumption correct that a multiple of people who needed to worry about exceeding the exemption, those number of people, are now being multiplied. Is that right? Jonathon: Yeah, once exemptions go down. You've got a lot of people now that have to worry about estate taxes. So in 2026, there's going to be a lot more people that need my services. But between now and 26, it's really. You know, if I had to pick a number, it's somebody that either already has about 10, $15 million or more, because you're doubling every 10 years, assuming the rule of 72. Yep, those people need to look at this planning. But, more importantly perhaps, are a lot of your listeners. These are business owners and their businesses are on fire. They're just going out there. Ebit is jumping every year. Multiples might be getting higher and so between now and their death they might be in their 40s, 50s, 60s. They got a long life expectancy. They're likely going to have a lot of them over $100 million net worth at death. That's when you have to measure this tax. You file a federal estate tax return within nine months after death and the government wants valuations and they want to see what you're worth and there's a 40% tax imposed at that time and that's due within nine months. There's a huge check that gets written. The good news is a Harvard professor famously said the federal estate tax is optional as long as you plan for it. I don't care what you're worth If you've got 20, maybe 30 years to live, unless you're like over a half billion dollars of net worth. I can usually wipe out the federal estate tax through proactive planning and I've got, like I said, a finance and accounting background. I've got financial models that I run free of charge all up front to show you Like I just did one for a $100 million business owner and it showed that he had about 20 million of other assets. But it showed and he was 55, it showed that if he was willing to transfer 60% of his business into the special kind of trust that we were going to wipe out his $200 million projected estate tax in 30 years it was going to go to zero and he had totally stabilized cash flow and liquidity between now and year 30. So the name of the game is to figure out how much do we need to transfer, and you got to run financial models. Most attorneys don't do that, but for a business owner there's so much that we can do because we can value the business at less attractive values at the time of gift number one. So valuations in the tax code say the valuation firm has to look at it from a discounted cashflow perspective, not a strategic buyer perspective. I just had a $600 million company that just sold a year ago. We got a value to $80 million because it wasn't valued from a strategic buyer standpoint. So if you come to me and you're 80 and you've got $100 million of cash, it's a lot harder to wipe out the estate tax versus a business owner that's got a EBIT of $5, $10 million. But they're in their 50s. We can transfer some of that business out and rely on a number of other mechanisms to wipe out that estate tax and get asset protection while they're living Very easily. They keep total control over their estate if you do it right and the business so I'm intrigued. Tell me more do it right and the business. So I'm intrigued, tell me more. Yeah, I'll tell you the exemptions going away when you run the financial models out 30 or 40 years for a lot of your business owner clients. Okay, there's, the exemption is prompting a lot of this planning and I'll explain one of the reason. But the exemptions are going down. It's use it or lose it. Okay. So let's say you've got a nice boring balance sheet $50 million stocks and bonds. Okay, single guy, you guys should definitely gift his $13.6 million exemption before 2026. We'll talk about you know, just gift it to kids. I've got a special vehicle that's done over 200 of these without an audit, making the cover of the state national state planning journal in May. So you've got a trust receptacle. If you do it right, that client could gift $13 million and keep total control and access while they're living. Again, if you know what you're doing and that irrevocable trust is designed from the outset correctly, which a lot of them aren't, I call that the optimized gift trust. So, again, that's a boring $50 million cash, stocks, bonds. So, business owners, we got the exemptions going away. That's prompting some of this. Here's the more important impetuses for reasons to act. Number one, the business keeps going up in value. We want to freeze that appreciation on that business, gift it out of the estate. So all that post-gift appreciation on the business when they sell, all of that is soaked up off balance sheet. You don't your clients, my clients are too wealthy and we don't want them getting any wealthier because there was creditor and lawsuit exposure while they're living and then at death the government takes the estate tax. So the sooner we can get a client before the business takes off, transfer some or all of that business to that special type of optimized gift trust. Get them all the control, but start building wealth off balance sheet. Rockefeller famously said you want to own nothing but control everything. If you do it right, they won't own that business anymore but they can control and access that gift trust in so many different ways. The IRS has lost so many cases in the last several decades. That allows us to pack those optimized gift trusts with so many cases in the last several decades. That allows us to pack those optimized gift trusts with so many controls. So again, number one urgency is really the fact that a lot of business owners are going to continue to grow their business and we want to shelter it. The second major reason is we have a lot of legislative risk right now. I mentioned how over the last 40, 50 years, the IRS has pretty much been on the losing end of all the cases in estate and gift. In the old days you couldn't pack that much control in these gift trusts. The IRS has lost cases or given up or acquiesced in rulings that now, if you do it right, these gift trusts that you put in your business or other assets into, there's pretty much nothing we can't. It's technically irrevocable if you don't own it anymore. But if you do it right, like you'll see in my paper, my materials for the gift trust, they have so much control In 2021, they almost patched it. Remember that building back better bill yeah. A lot of its owners were worried about. While there was a little piece nobody was paying attention to except for us in the state and gift tax eight pages it would have killed all of these flexible trusts that we use. Any quote, grant or trust would have been abolished unless you got it funded before Biden signed it into law. So I did 160 deals, $3 billion of gifts, those 18 month period. It didn't pass because remember there were two senators, manchin and Sinema, that didn't vote for it but with and this is covered in my paper in the journal they could. There's always rumors they could take another stab at trying to kill off Grand Tour Trusts. We also have interest rates that could keep going up. A lot of what we do leverages those interest rates. So there's a lot of headwinds in the near future, next few years perhaps. And the lowered exemptions this is sort of the golden age of estate planning. That's kind of fleeting because they're trying to kill off the trust. Exemptions are going down, interest rates are going up. If you're a business owner, this is the time to act. If you haven't already, okay. Dave: Yeah, because I'm assuming, since you're talking about valuations being discounted cashflow, that these higher interest rates are creating bigger discounts. Jonathon: That's part of it, I mean the major reason for interest rates being relevant is you can gift assets to these types of trusts. But you're limited by that exemption $13 million. There's another way you can actually get up to 10 times that amount in these trusts and that's the so-called sale to a defective grantor trust. What does that mean? It means I put $13 million of cash in this trust. I can then actually transfer another 130 million 10 times in exchange for a note back to me. Okay, that note. The IRS requires a minimum interest rate pretty much tracks the 10-year treasury. So the higher the interest rate, the more this trust is feeding back into your name, your taxable estate. So we want low interest rates, we want to be able to-. I see, a couple of years ago we were lending so much money at the 1% interest only 30 year fixed Right Gift trust is arbitraging and we froze that client's estate at that note value with 1%. So there's other strategies like GRATS and CLATS that are interest rate dependent. But bottom line it's one headwind is. So why don't we talk a little bit? So we talked about sort of the urgencies, business value going up. These cool trusts that we've been using for decades might be gone soon. If you don't get it done, you'd be great to put it in under everything we've ever seen. So this is the time to act. Now let's talk about the importance of that gift trust being flexible. Okay, I developed this thing in 2020. I call it I just I call it an optimized gift trust. Okay, it's. If you know any of my gift trusts and many of your podcast listeners, I've probably heard of idgits or generation skipping trusts or dynasty trusts or slats, all these things. All those things basically mean is, hey, they're features of a gift trust that give you either tax benefits or retained control. So what if you create a gift trust and you just put all those things into one? I call it a hybrid. It's nothing new. If you go to Manhattan or Silicon Valley, they're not going to call an optimized gift trust. It's just how we do it there. But you go to smaller markets like where I live, phoenix or it isn't even a small market but there's attorneys that aren't just getting. They're just not getting enough repetitions over the years. So these gift trusts a lot of the ones I review locally, for example just don't have the maximum strengths and controls that your business owner client can have if they're gifting. And it's a big deal because if you run the financial model, the majority of wealth is going to be in these gift trusts. If they're not done from the outset, you might never be able to get that money back or change the beneficiaries or access it or do many, lots of different things. And I clean up bad, irrevocable gift trusts all the time. So in 2020, I developed this thing called the Optimized Gift Trust. Three page in out overview. I got a seven page frequently asked questions. I try to productize things. I've done this 500 times. I try to take all this complexity and put it into a nice, easy to go package for business owners that are way too busy, and so this gift trust has all the bells and whistles and I mentioned. I was just asked by the National Estate Planning Journal, the top journal in my field. I made the cover back in 2020 with a different product. This one, in May 2024, in a couple of months will be on the cover, the full legal citations. It was peer reviewed, everything. There wasn't a single change. So it all checks out, never been audited. It's audit defensible as well. We've got an army of lawyers here at this firm, about three or four of them that are former IRS trial attorneys that can defend it. But my point is is these business owners need to make transfers here soon and you better darn have your gift trust within that 60 page document. It's irrevocable, meaning you can't change it, the terms of that trust, once it's done, and so if it's not optimized from the outset, that can be a big problem. So, yeah, you really want a flexible, accessible trust. If you do it right, the business owner, literally there's no downside. We can get it back in four or five different access points make changes, especially if they're married. You can include slot powers, spousal life access, trust powers which give the marital unit even more control. So that's the again number one, the urgency to act, and the number two, making sure you've got a strong gift trust to receive that gift and make changes down the road. Dave: Okay, yeah, that sounds that makes a lot of sense. So could you give us maybe a case study example, like anonymously. Sure, you know just to kind of give some color to some of this yeah, sure. Jonathon: So I mentioned I have a unique process and as part of that, what I do is I prepare. I built out this financial model. Okay, if you go to any of the top I mean, I haven't found a bank yet that I really like their financial model. Even the top banks in the world. They've got these financial models that will illustrate what it looks like to gift into these gift trusts and they'll run it out 30 years and it'll show you cash flows and tax savings. But all the models I've reviewed are really developed by financial people, not estate and gift attorneys like me. So about 10 years ago I developed this bespoke model. It's Excel-based and we can input all you know. I basically have it custom tailored to what I like to do. So I put in spending, you know assets, asset performance, business assumptions, how long you're going to live all of these things and you put in. Really, it's determined. The goal of this is to output for me. How much does my client need to gift into this gift trust to cause it so that they I joke die poor? We want them burying life. If you get sued, you don't own it anymore. That objective, the competing objective, is we don't want them to put too much in the gift trust, because the IRS doesn't like if you're poking and prodding and grabbing the assets out of there. Ideally they'll never need to touch it. Okay, we've got all these access points that they need to get back in emergency Great, but I want to make sure that they haven't given it away too much. They've still got plenty of liquidity, stabilized cash net of expenses, net of taxes, net of spending over here. So that's the output. So you wanted a case study. You wanted a case study so I just did one of the sample model. That's client business owner. He's got about $5 million of liquid assets, cash stocks, bonds. He's got $10 million of investment, real estate. He's got a $5 million home. So you know 20, 25 million, but the bulk of his net worth is in the business. It doesn't have to be that way. A lot of business owners have a lot less. But the assumption was it was you could sell the business to a strategic for $100 million in two years. We went and got a valuation, looked at the company from the worst possible lens defensively low top valuation firm, looked at EBITDA, looked at the markets and also applied minority interest valuation discounts. So a lot of times we're gifting minority interest in the company to the gift trust. You get further discounts Bottom line. It's not atypical for a $100 million company to be valued at maybe $20 million when all the discounts are applied. Okay enterprise discount, maybe down to 40, and then maybe another 40, 50% discount on that for minority interest. So we put all this in the model. He's spending 750 grand a year and then you've got inflation adjustments and everything. But the model showed that if he gifted 60% of the shares in his company to this special gift trust, that over the next 30 years, rather than his estate just growing, I think he has about $500 million in 30 years on these assumptions, causing a $200 million inheritance tax at death 40% of 500. By gifting that 60% interest we froze his estate tax. I think about $15 million. So he always had about $50 million in his hands. But all but because he had that sweet spot, all of that future value, even when the business is sold and reinvested, we froze his net worth at about 50 over here and effectively, because of all the thing that's going on, the gift trust was worth $450 million at death. That gift trust is not only exempt from 40% of state tax at his death but it's generation skipping, meaning it's totally out of, permanently out of the federal 40% gift inheritance tax for generations. In Arizona we got 500 years Depends on which state you live in or you set it up but we wiped out $200 million state tax and it made sure he had plenty of money to spend. Totally accessible gift trust if he ever needed to access it Controlled the business units that he gifted away. We can still make changes to beneficiaries or give it all to charity or some of the charity. Down the road he could borrow from the gift trust all sorts of stuff. His wife could take distributions out, so that's a great. I mean this is a very common example of the power that state attorneys that know what they're doing can do for a business owner for relatively small fees very small fees compared to that type of savings. Dave: Sure, and I presume that's where the word optimized comes in, because you're talking about that modeling and you're kind of trying to find that sweet spot of him having enough cash flow, enough control, right? Is that kind of what the optimization means? Jonathon: You hit it on the head. There's two optimizations okay. The first is making sure that gift trust has optimized his retain and control right. We've given as much as the irs case law allows with minimal risk. We're not going over the edge and there's a ton of stuff we can pack in there. So if he needs to do anything with the gift trust, we've got that optimized. And then the second thing is making sure exactly that the transfer into trust I call it the funding design, how it's transferred. Is it a gift? Is it a sale? For a note back, are we loaning additional assets? Modeling that out so that the funding design is optimized? I have to put a disclaimer in here. I'd say 95% of trusts and designs that I review probably less than that are totally optimized. There's a lot of attorneys out there that are going to seminars. They're reading about certain gift trusts, especially SLATs, spousal Life Access Trusts and they think they can get on their computer and go on some document program and start pushing buttons and making it work. This is dangerous. I didn't know what I was doing until probably about 200 transactions. I was at the top firm in Silicon Valley took public Apple, google, facebook, amazon, tesla and I was training for 10 hard years before I knew what I was doing. So making sure that your gift trust is prepared by somebody that specializes in the field has done it many times, and not just the trust being done right. Maybe you can get those buttons right if you're pushing them. The funding design is much more complex and I don't know many attorneys that can the no numbers backwards and forwards. They usually rely on the financial advisor usually doesn't really know how to apply their financial modeling to estate planning. It's just, it's a concern. So, anyways, that's enough of that disclaimer. But yeah, you got to optimize the trust and the funding design, which is my journal article 15 pages, goes into everything I'm talking about in detail. Dave: No, thank you very much. That is very helpful and we'll want to link some of that information that I'll get from you after we finish recording. Jonathon: Excellent, yeah, happy to. I'll share the overview. Frequently asked questions and I'm not sure if I can share that journal article. It's in the final peer reviewed draft but once that comes out, I'm bulk of their wealth is in the business. Dave: Now what about? So is it safe to assume that, say, somebody has a? They have a business that's worth $5 million. They have another $3 or $4 million outside the business. They don't anticipate huge growth in the business. Do they have a need for this planning? Jonathon: Yeah, I think I mean. Again, it depends on what the value of the business If you pass away, the IRS is going to require a valuation of that company within nine months If you're over the exemption amount again in a couple of years. Here you know, exemption is $7 million for single, $14 for married. So yeah, I think if the value of the company and all the assets are $10 million or above, I think it's at least worth a conversation. There's a different design for a $15 million contract individual or couple than 100 million dollar. You might, for example, you know a lot of 20 or 30 million dollar cases I come across not all business owners. But, like the design there is, you want to consume one spouse's exemption you don't need and then preserve the second spouse's exemption. So gift out of that spouse's exemption, lock, lock that in at least before 26. Right, partial forfeiture of the other spouse there's lots of things you can do. But yeah, I think I'd say it's probably closer. You know, 15 million is kind of net worth level all in real estate business. If you die tomorrow it's worth talking about and running it, you know, and see if it's worthwhile. Dave: Yeah, and because, like you're saying, one of the biggest risks of that scenario is, let's say, this hypothetical person is married and you know, let's say the exemptions drop in 27 to what you're thinking they will be, yeah, but let's just say, though, that the year before. And then let's say he dies in 2029, but let's say the year before he dies he just has a huge year, a record year, yeah, and then the business gets valued. Within nine months of when he dies, he might have a surprise valuation, right? So so, like that's, another piece of it too is you're locking in this valuation at the most conservative value and it sounds like postmortem. Some of those tools may be limited. Jonathon: They're gone. Yeah, once somebody passes away, we can't do any estate tax savings for them. Yeah, you're right, locking in low valuation. So, for example, I just I represented these famous restaurateurs and you know definitely a couple hundred million dollars of restaurants. 2020 happened and all the restaurants shut down and I remember I was just I tried so hard they ended up not pulling a trigger. I said look guys, I said your value of your restaurants because of the COVID pandemic is like probably 20% of what it used to be. Nobody knows how long this pandemic's going. I said let's get these restaurants transferred out of your estate at a depressed gift value. By the way, we got a file the only filing for this is a one-time gift. Federal gift tax return said hey, here's our valuation, irs, here's what we transferred. There's only there's a less than 1% reported audit rate on those. Okay, IRS has three years to challenge the value. If they don't which they never do then you've cleansed that gift and that valuation At death. Right now, there's almost 100% chance that an estate tax auditor at least somebody's going to look at it from the IRS. They might not do a full audit, but somebody's going to look at it. So if you've got attractive valuations, especially if it's a depressed year on your EBITDA. For whatever reason, that's the year to get it in. It's like buying low, selling high. Similar you want to transfer that into the gift trust. When it's low, use a minimal amount of your exemption and soak up all that post-gift appreciation out of the estate. Two more things. Life insurance is a big deal. It's not something I sell, but for business owners it's just good estate planning. Dave: Yeah, just to have the liquidity to pay the estate tax. Jonathon: Exactly yeah, because there's a section of tax code the good news that says if you pass away and more than 35% of your estate is trapped up in a business, or even if you're a real estate professional, real estate business can qualify and you get to pay that estate tax actually over up to 15 years. Okay, section 61. Here's the problem. The IRS wants liens. You've got now IRS as your partner or you died and your partner's now the IRS liens and all the headache. So here's what I tell clients. I say look, I can, if you live long enough, I can almost certainly wipe out your estate tax without you ever having to, you know, lose control or give up a penny, essentially. But until, like, if you've already come to me, you've got a hundred million dollars, say well, or a business worth a hundred, say it's going to take some, there's some time component. Can't immediately wipe out the death tax, but there's a time component, usually by like year 10, 20, we're getting close. So buy a big old policy of life insurance. We get it into the gift trust, irre. We get it into the gift trust, irrevocable life insurance trust or an islet, at least the death benefit isn't getting included in the estate. And then if you get a flexible life insurance policy, you can always scale down that death benefit as I'm doing my job over the years in the estate tax. You can reduce that death benefit, but if you have an unexpected death, at least we've got some liquidity to get the IRS out of the way and you don't got liens on the business for 15 years, right, yeah, so that's critical. We've got a few more minutes, unless you have something else, I want to talk about my process, yeah, so again, this is very unique. Attorneys drive me as crazy as they drive most businesses. What's the complaints about? In fact, in 20 minutes I'm going to present to all my attorneys here at the firm on best practices, on efficiencies and productivity, because I've got all these systems down. But what are the knocks? Right, attorneys, they never get back to you. They don't use email, hourly billing, some range, you know. I remember a famous quote. You know some attorney said oh, it's going to cost I don't know $5,000 to $10,000. And it was a construction, a builder, and I remember the builder said wait a second, I can quote a $20 million project down to the penny and you can't quote a darn estate plan to give me a $5,000 to $10,000 range. Anyways, hourly billings, all this talking over their head. It takes five meetings to get anything done. It's complicated. So I solved all this Five years ago. I went to just kind of revamp the whole model and I do a number of things. First, I don't have any junior lawyers. Okay, you think it's hard to hire in your industry for your business? Try the neurosurgery of the law in a small market it's impossible even find senior lawyers that are really good at this at the advanced planning. So it's driving me crazy. You know quality control and delays, where who's on which client stuff comes back. It's a mess. I got a red line in it, lots of control lock with control, caseload control and quality control and delay. So I'd only use no junior lawyers. I take a limited number of cases. I charge a premium fee but I joke that you buy my brain. You don't buy some 30 year lawyers. Brain number two it's a flat fee model. I've got a scheduled flat fee model, almost always tax deductible against the business income as a legal expense get. You get a 40, 50% discount right after that One-time fee. So we go through this process and we get it set up. Most people they need a will trust update. They need the optimized gift trust. Maybe they need this other charitable trust for income tax planning. But if you do it right, the structure is simple and it's easy to operate. At the very end of my process I've got an instruction manual. I call it. It says, hey, the lawyer set all this stuff up, but here's how you operate it. Copy the CPA, copy the investment advisor. Here's six pages. Here's what you did. Here's how to operate it. Let's have annual reviews. I don't charge for annual reviews. I don't charge for phone calls. After they've done it, they want to add some minor assets in there. We don't charge for that. You get a one-time fee and you'll get all these hourly billings. And then the third thing that I do that's pretty unique, although probably in the next two years I'll be buried, so I don't know if I can do this part always, but right now, when it's slow years, we don't have a tax law change. If I have a conversation with a new prospective client 30, 45 minute call I then get all the information I need. I work for free initially, come back about four weeks later with a full roadmap recommendation about 10 pages. So here's your objectives, here's your background. Here's exactly what I would do if I were you. Include a diagram, include those financial projections. I give it all away for free, picks me maybe eight, 10 hours, but because I've it all away for free, it takes me maybe eight, 10 hours, but because I've got all the processes, it usually takes other lawyers a lot longer than that. And then it has the fee, quote one-time fee. I'd say three out of four times people say maybe one of that. People say I like this lawyer. I see I've gotten to know him, I've gotten to see his work. I like the plan and here's what it costs one-time fee. He's not relying on junior lawyers. He's going to get this done in three phone calls, maybe two, and so they like to probably get to sample the process without having to pay 20 grand in hourly fees find out this lawyer isn't going to do it. Dave: Yeah, lots of that is really. And the thing is, even if they took your roadmap to another attorney, unless they had your level of expertise, they really couldn't execute on that roadmap anyway, right. Jonathon: Yeah, that's the thing I joke. Sometimes I say I can give you the key to my Ferrari, but I don't know. It doesn't mean you can drive it right, you could turn it on, but you're not going to know how to really use it. So that happens every now and then and I'm straight up I say look, if you shop this around, you can probably get it for half a third of the cost. Dave: But you're going to get a junior lawyer. Jonathon: You're not going to get somebody that's done this 500 times Top firm in Silicon Valley. You know you're not going to get it in two or three. I mean you just I'm doing all the drafting over time. I mean iron sharpens, iron, you get those reps. Senior lawyers are lazy, they're just sourcing business and sending it down the hall to a junior and they don't know what's going on in those documents. And if it's not done right. You're building a house for all of your wealth $450 million my client projected. If that trust isn't done right, we have client, like a lot of our clients myself, we'll spend 20, 30 grand on a kitchen remodel. But I have clients that say wait a second, I don't want to spend 50, 100 grand on this, I can get it done for 15 or 25. And I'm like do you know how important this is? This is not the area to skimp. You want to experience lawyer drafting because you can't change it later if it's not done right. Dave: Yeah Well, and then the fact that it's a, fact that it's a, it's an upfront payment. Jonathon: Like you know that they get the annual reviews for you know, right? No ongoing billings and you're working? Dave: yeah, there's huge value. It's unique it shouldn't be unique. Jonathon: In my industry it sounds like you know most industries they've come a long way. The law is still behind the times, at least in the state. Dave: Yeah, the law and in the accounting profession too. Yeah, right, so the other thing that I think people don't realize is that folks really don't need a pure custom estate plan. My sense is they need a standardized plan, right? Because I'm guessing that all of those 500 estate plans you've done fall into a small number of categories, fact patterns, right. Jonathon: I agree. There's probably about five fact patterns. You've done enough. You know this is this bucket, this is the design and then when you go through, there is customization, right, Once we go through I send out the draft gift trust. It goes out with an explanatory memo. There's 15, 20 custom decision points usually that we go through. So there's customization. But generally you're right, the design, the funding design, most of the time goes in four or five buckets. Dave: Well, it's the same reason that you know, for better, for worse, a Toyota objectively has better big build quality than a hand-built exotic car because of the repetitions and the standardizations and the perfection, and you know six Sigma, you know defect measurement, and now so I can appreciate the value of starting with a framework that's proven. I mean even just something as simple as you know when you're, if you start with standardized documents that you can search and replace, you know stuff with you're far better off than just starting with a clean slate or something that's very different than what you're going to end up. Jonathon: You're right. Yeah, I mean my process, my documents I put hundreds of hours into and I'm constantly. That's again, a benefit of doing it myself and not relying on junior lawyers is I'm constantly tweaking my forms. At least once a week there's something in a memo or something I'm going to add this or change this, and so you're constantly improving it. That happens at a lot of law firms, but again, it's usually junior lawyers that are updating, doing all that, and you don't have senior lawyers doing this over and over. Dave: So yeah. Jonathon: And again, the times suck for business owners. They, like you know, you know when I've done. Probably each of these cases takes me I don't know 10, 20 hours, all in right. If you multiply that by my billable rate, you know it's more expensive. You're buying the premium of making sure something that's been done. You know, optimized right and so yeah there's a premium. I have a buddy that jokes, or he's always asking me well, I've got this document model, this software that I can just push the buttons, like you know. Why are you charging so much? Like I said, it's so much more than just even if you get a good document. It's the funding design, it's being able to immediately respond with answers, being able to simplify complex things like we've had during this call, and spit it out in a digestible, understandable format. It's the process. It's the backend instruction manual and the front understandable format. It's the process. It's the back-end instruction manual and the front-end memo. It's all of that. That's where the value is. And again, I'm going to tell my lawyers in about 10 minutes. I'm going to talk about all this with them, because lawyers don't do this right. They don't do it. Dave: Yeah, they're really paying you not for your time, but for your expertise, knowledge, best practices, all of that. Well, hey, I know we're running up against our time limit. If somebody wants to reach out to you, what's the best way for them to reach out? Linkedin email phone. Jonathon:Email's best. jmorrison@frgalaw.com. So Frazier Ryan, goldberg, arnold, f-r-g-a-l-a-wcom, and again reach out say hey, here's my situation. Heard you on the podcast and I've got a forum process. I respond here's all the materials, here's where I think hop on a 45-minute Zoom. A paralegal usually gathers some 10 minutes of information before that. We'll run the numbers on the fly. We'll look at the stuff on the fly and see if it makes sense and I tell clients look, I make a good living. I say if this doesn't work for you, I'm happy to talk myself out of a job and tell you doesn't. But if it does, you know let's get going. Because there's so much there's no other industry that you can get thousand to one return. I mean $200 million of estate taxes saved for less than a hundred grand. No other any good financial advisor knows to run to the estate attorney, cause that's where the that's a low hanging fruit, it's the best money you can spend. And then making sure we also make sure all your kids inheritance protected from creditors. Lawsuits and divorce like that may be more important than the tax savings. Making sure that the kids inheritance is well-managed and protected, even if they have control over it. We can do it, so it's all protected so a lot of there's a lot of benefits to what I do. I love what I do and it's easy to sell because it's something I believe in. Dave: Yeah, there's a lot of. Well, Jonathan, I can't tell you how much I appreciate you taking time out of your day. I know you have a meeting to get to, so why don't we wrap it up and again, thank you so much for your time and have a great day. Jonathon: Thank you Wonderful, appreciate it.

In today's episode of the IC-DISC show, Eric Miller from the Export-Import Bank of the United States (EX-IM) provides valuable insights into how this 90-year-old institution supports American exporters through strategic financial services. I also learned that EX-IM is one of just two governmental agencies that is an actual profit center. ​ Before joining EX-IM, Eric worked for a privately-held exporter that was a customer of EX-IM. His expertise both inside and outside of EX-IM sheds light on crucial products like export credit insurance, export financing, and financing for foreign buyers. These solutions can alleviate common hurdles inhibiting international trade growth. ​ We also talk through some real-world examples of these various EXIM solutions. This is a must-listen episode for any company doing substantial direct exports.   SHOW HIGHLIGHTS Eric Miller from the Export-Import Bank of the United States (Ex-Im Bank) discusses the role of the bank in aiding exporting companies with financial services, operating without costing taxpayers. We delve into how Ex-Im Bank and the Small Business Administration (SBA) offer loan guarantees and insurance to boost companies' borrowing capacity. Eric shares insights into export credit insurance and how Ex-Im Bank's products can help resolve common financial challenges in international transactions. The discussion covers Ex-Im Bank's new domestic project finance product, designed to support projects that have a significant export component. We touch on the requirement for a U.S. majority in product content, aiming to foster manufacturing and job growth in the United States. Eric explains the importance of services, like engineering and architectural services for foreign projects, requiring a U.S. majority for cost. We discuss government resources that can aid businesses in exporting, such as tax incentives and the Gold Key service provided by the U.S. Commercial Services. The episode highlights the STEP grant, a federal program managed by states to support companies with export-related expenses. Eric and I settle the Tex-Mex vs. BBQ debate with an appreciation for both, adding a lighthearted twist to the episode. Contact information for Eric Miller is shared for listeners who wish to connect and further explore export financing options. Contact Details Email (eric.miller@xmexim.gov) Phone Number (713-306-7969) LINKSShow Notes Be a Guest About IC-DISC Alliance About Export-Import Bank of the United States GUEST Eric MillerAbout Eric TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, this is David Spray. Welcome to another episode of the IC Disc Show. My guest today is Eric Miller of the Export-Import Bank of the United States, colloquially known by the acronym of XM. More useful takeaways for privately held exporting companies than any guest I've ever had. We talked about the history of the XM, its purpose and the four service offerings that they have for privately held exporting businesses. We also talked about three other governmental arms that can also be of value. The other interesting thing about Eric is he actually was a customer of XM early in his career when he was a minority owner of an exporting business. So Eric's a really dynamic guy. He's really passionate about serving exporting companies and he really understands what it's like to be in the shoes of their customers. I really recommend you take a listen to this one. It's really valuable hey good morning Eric. Welcome to the podcast. Eric: Thank you, Dave. It's a pleasure to be here. It's an honor. Thank you. Dave: Well, the pleasure is all mine. So where are you connecting from today? What part of the world are you in at the moment? Eric: The great state of Texas. I'm in the Houston area, born and raised in Texas and been all over the world, but this is home. Oh, that's awesome. Dave: In fact, I think you even stayed close for college, right. Eric: I did. I'm a Cougar alumni, so a proud Houston native. Dave: Awesome, so I'm really excited to have you on. You are with the Export Import Bank of the United States, correct? Correct so we also go by XM Bank, sorry. Eric: Yep. Dave: So tell me about XM, tell me about the kind of the history of the organization and why it exists, and then we'll get it. We'll see where the conversation goes. Eric: Yeah, no, it's a good question. I'm biased, of course, working here, but I think it's one of the most fascinating government agencies that exist. We're set up in the executive branch of the federal government. We've been around for 90 years. Most people haven't heard of us. We are small. We've got anywhere between 400 and 500 people as a part of the agency. Most are headquartered in Washington DC, but we do have a dozen regional offices scattered throughout the US and all the major cities. I cover the Houston office and in doing so, I work with exporters in the great state of Texas and help them export more US made products and services. That's really what we're about here at XM Bank is supporting our US companies that are exporting a US made good or service. We're on the finance side of that help. There's other government agencies. Throughout the whole process of a transaction, whether it's finding buyers, whether it's financing a transaction or even getting grant money to help you export. There's other support, but EXIM is specific on the finance piece. Dave: Okay, and so does EXIM. At the end of the day, you know, does this cost taxpayers, you know, billions of dollars to have this thing in place. Eric: Yeah, that's another good question. So you know, we're one of the few agencies historically that have actually built a surplus of money for the taxpayer. In other words, we're using less than we're making and we send money back to Treasury. It changes year to year, but historically, if you look over the past you the past 20, 30 years we're generating a surplus and sending that back to treasury, so costing taxpayers billions of dollars. No, we like to operate a little differently than a government agency. We are an independent government agency, which means we're not inside a cabinet, but we are set up in the executive branch and we like to say we run at the speed of business Internally, we're very efficient, we're very effective and we're very aggressive, trying to reach out to US companies and get them involved in helping them. Dave: Well, that is awesome. I think it sounds like just a win, right. It's a win for the taxpayers. It's actually a profit center, if you will, for the taxpayers. It's good for the exporters, it's good for the country. Am I correct? I think the only other government agency I've ever heard of that's a profit center is like the Patent and Trademark Office. Have you heard that too? Eric: I think you're right. Now, I haven't researched that myself, just in passing and conversations I've heard of the same and there might be one or two others out there. But yeah, it's an unusual feat of a government agency to kind of generate that surplus for a taxpayer and send it back to Treasury. We do charge, you know, fees and that's how the agency itself makes and brings in money. We charge fees for our different products and you know we have products like export credit insurance. To just kind of dive into what we do, yeah, let's do that In export credit insurance to just kind of dive into what we do yeah let's do that In export credit insurance. So let me take a couple steps back. When an exporter engages in international business, when they find a foreign buyer in a country and they say, hey, here's what I sell, whether it's a product or service, there's always a sticking point. If you will product or service, there's always a sticking point if you will in the negotiations, when it comes to money flow. And what I mean by that is the exporter will say, hey, I'll ship my product or I'll do the service, but go ahead and wire me money before I ship it. And then the importer, the buyer there's always a reluctance to say well, I don't want to wire you money, because what if you close your doors? I never hear from you again. So when there's a new relationship and there's a transaction that's trying to occur, money, the movement of money, is always a sticking point. Who sends it first? And exporters lose a lot of deals because of this. I speak to exporters on a daily basis and every week there's at least one that says I wish I would have known about this. It would have helped me with the last negotiation I had with a foreign buyer who said you know, ship me the product on open account and I'll pay you 60 days later. I wasn't comfortable with that as an exporter so I closed the door and lost the deal. So XM gets involved and we say no, go ahead. And you know, if they're asking for credit terms, go ahead and provide that to them and we will back you up on the payment. We will insure that receivable from default. So if something goes wrong and the foreign buyer doesn't pay back the exporter as intended, we will insure it. They put a claim into us. So when I say claim, just like any other insurance policy, right, you're driving a car and you get to an accident, you file a claim. Something goes wrong with the house, you file a claim with the home insurance provider. We're no different. We're an insurance provider on foreign receivables and the government gets involved in this space because you know, david, look at the trade deficit. Last year we're nearing a trillion dollars. Most years, from year to year in the last 10 years, it's getting worse and worse. So what I mean by that is we're bringing in way more than we're sending out, and what we have found through our research as a government agency is the number one reason more US companies are not sending more product abroad is the number one reason is fear. They are fearful of what that process looks like and the government gets involved. Then we say let's take away that fear. We'll put the risk on our shoulders as it relates to credit insurance. Go ahead and give your foreign buyer terms or open account. We'll shoulder the risk and if they don't pay you, we'll pay you. And we want to help the trade deficit. We want to as a government agency. We want to stimulate US manufacturing. We want to create jobs through exports. That's really what the mission is here at Ex-Im Bank. Dave: Okay, yeah, no, that's really good. And do you specifically underwrite each customer? You know each foreign customer, or is there just you guys? Just use some general parameters. Eric: Yeah, no, it's a good question, like what does that process look like? So we have four different credit insurance policies. We can do everything from hey, we'll underwrite every buyer if you're not comfortable with it. Or hey, we'll give you a policy where you can do your own underwriting according to our credit standards but give you that autonomy inside your company to do it without coming to us every time there's a buyer. So there's different approaches. Most exporters like the autonomy because they can approve a credit right then and there, rather than sending us the paperwork and then us process it and then get back to them. So it just depends on timeline. But yeah, we can do either. Dave: And does the policy insure 100% of the invoice or is there a co-insurance piece where your customer is taking some of the risk? Eric: So the coverage will be anywhere from 90 or 95%, depending on which policy. Most of them are in that 95% range, but some of them are in the 90. Okay, they have the option. Dave: Yeah. So it's enough that as long as the company's got decent margins right, if their margin's greater than 5% or 10%, then their risk is just if a deal goes bad. They didn't make any money on that deal. Eric: That's a fair way of looking at it? Dave: Yep, but they have enough skin in the game that they do want to make a profit on that transaction. They want to all that trouble. So they have a motivation to not, you know, sell to people who you know they have serious concerns about their ethics or integrity or ability to pay. Eric: Exactly, and that's really what it's all about. Hey, I've got a new relationship and you know, name a country. They're asking for open account. And open account, you know, most people are comfortable with that in the US. They have a recourse in mind. Hey, if I don't pay, here's the process where I can recoup. But that all goes away when you send it to a foreign country. Like you know, how do I even get my money if I don't? I'm dealing with a different legal environment, political currency, culture, I mean. The list goes on and on. So that's where, wherein lies the fear for the exporter. And there's government agencies, both local, state and federal, all of them. We want to surround the exporter, prop them up, take away the fear, shoulder the risk and get them comfortable in international business. Dave: Okay, so you may mention the one person you were talking to that said they wish they'd known about XM because they kind of lost this deal. Do you have another case study, if you will, or example and obviously you don't have to mention the specific company by name where everything did work out kind of a success story, where maybe they were not exporting much but with this credit insurance it really helped them materially increase their sales? Do you have any examples like that, just to help people further understand? Eric: Oh yeah, we have a whole list of resources on our website. There's a section dedicated to success stories of all the different companies and we like to diversify the industry and the product and we've got you name it and it's probably up there. One that just immediately comes to mind is a company and they've been kind of a strong advocate of Ex-Im Bank. They're called BuzzBalls and it's alcohol manufactured here in Texas in the Dallas area, and they were very successful domestically. I mean, you can find these little alcohol glasses basically in any kind of retail store in the US. But as they looked abroad they wanted to de-risk a lot of their open account with distributors and really I think the last I heard they either doubled or tripled the revenue by focusing on foreign buyers, distributing it to the distributors, the foreign distributors giving them credit to pay and Ex-Im Bank insuring the risk. I mean, it's just one interesting example that you know, if little cups of alcohol can move abroad, mostly anything can. Dave: Oh, that's great, I love that and thank you for that. Thank you for that example. So now let's say that a company is contemplating exporting and let's say they have this large potential order you know large for them, you say it's a $5 million company annual revenues and suddenly they have this pay for the materials from their supplier and they maybe don't have enough working capital to do that and maybe they're in a spot where you know a traditional bank loan or line of credit. They're maybe, just maybe what you'd call not bankable. What happens then? Does the whole process just fall apart? You know they've got the credit insurance but they don't have the cash to buy the goods. What happens then? Eric: Yeah, that's really the second big problem in international trade. So the US banking system in general is challenging to help US companies fill export orders, and what I mean by that is, in your example, a $5 million revenue company. It can even be bigger than that, it could be 20, 30, 40. The problem with a lot of US companies is when their foreign sales start to get significant and they go to the bank and say, hey, I need a line of credit, not just for my domestic business, I need it for my international too. There becomes a problem in the banking system. There's this view that it's high risk and, as bankers tend to be more conservative and shy away from risk, so most times US companies have problems getting the money they need to fill these export purchase orders. So government gets involved, Ex-Im gets involved and SBA also has a product similar to the Ex-Im bank. It varies according to the banker who wants to use the product, but the idea behind it is we become a guarantor of repayment to the lender. So in your example, $5 million a year company, $2 million foreign sale that we're going to insure they walk that over to the bank and they say, hey, I got insurance on the receivable. Great, it's a $2 million deal. Now I need a million bucks or whatever as a line of credit to build all this stuff or go out and buy it. The bank will say, okay, where's it going? Oh, it's leaving the country. I can't help you. But when you come back with a US purchase order, then we can get serious in our talks. The company is stranded and they can't get the money, the capital they need to fill these orders with working capital. So we get involved and we say, hey, if they're presenting financial statements and the financial statements merit the ability to borrow what they're asking for a million, whatever it is and you're only saying no because it's an export, go ahead and give them the money that they need that they're asking for again, as long as it meets the credit standards, and we'll co-sign, we become a repayment guarantor to that line of credit so they can have access to the money that they need to fill these foreign buyer purchase orders. Guarantees and insurance is really kind of what we're about here at Ex-Im Bank to enable this cross-border trade. On the finance piece, Now, with that line of credit that we guarantee, they could also use it to issue bid bonds or performance bonds or standby letters of credit. Because another problem in our banking system is when a exporter bids on a foreign tender, that tender sometimes will say hey, if you want to bid on this, you got to put up a performance bond or a bid bond and that kind of weeds out the non-serious suppliers versus the serious. And when they want to supply that bid bond and they go to the bank, put the equivalent amount of cash in your account, I'll escrow it and then issue the bond. And then the exporter you know has this confused look. And well, I don't want to pay for my own deal and block my own cash. So under the XM line of credit you can actually use borrowed money to issue those bid bonds, performance bonds, standby LCs at a reduced cash collateral, so you're not tying up your cash. Dave: Interesting. Eric: And what's the? Dave: typical I think the term like if you're factoring an invoice, it's called. I think it's called like the advance rate, like what percentage you could borrow, like on the you know the purchase order or the invoice that you create. What's that percentage? You know, through the XM financing. Eric: So we put it into two categories pre-export and post-export. Okay, pre-export is the working capital right, the inventory, work in process, finished goods. So under that you could borrow a 75% advance rate. Then post-export, once it becomes a receivable, you could borrow 90. So it's pretty generous advance rates and typically it helps exporters fill these purchase orders much easier if we weren't involved. Dave: Yeah, Cause I think I was a CFO of a company many years ago and we were growing rapidly and we're using factoring and the. It seems like the advance rate we were able to get on the factoring for domestic sales, let alone international, was only like 70 or 80%. So, and even I think I'm told that even if a company has a line of credit that they're backing with inventory and domestic receivables, that still a typical kind of advance rate is really only like I think, about 80. And so you're talking about an even higher, if I'm using the correct term, than what a traditional bank would provide to a traditional bankable customer for a domestic sale. Is that accurate, based on your knowledge? Eric: Yeah, very accurate. And sometimes you know I go back to the example of US banks don't like export orders, and they don't. Sometimes they will give an advantage. They've got a traditional line of credit set up for domestic. They may say we'll let you borrow 10, 20, 30% advance rate on the export stuff. With our guarantee we can expand that to 75, up to 90. So it could be that we expand the borrowing base or just let alone get them access to it for export orders, with our guarantee. Dave: Okay, yeah, this is really valuable and I can't wait to get the word out to our contacts. So, on the working capital piece so how does that work then? Is the process that they call up their bank and say, hey, do you guys do anything with XM and they just work purely through their banker? Or do they call you up and say, hey, we need some working capital? We don't really have a big banking relationship. Can you recommend somebody? Help me understand the logistics? Eric: of it, Absolutely. Yeah, it's a good question. We recommend starting with us. It's very easy to get lost in the banking system and trying to figure out who to talk to about getting the setup. A lot of time exporters will speak to their local relationship manager and they start talking about XM working capital and they're like you know who's XM? I don't, I don't even know what you're talking about. Slow down, so it's more efficient to start with us and if they're working with a bank that is in our lender network, we can go directly to the right person and connect them with the exporter to have those conversations. If they're working with a lender that is not inside our our network, we can still locate a lender to set up kind of a XM specific line of credit if that's something they want to pursue. Dave: Okay. Eric: Okay. Dave: Now this is really valuable. Does the bank have any other service lines besides the foreign receivables insurance and the working capital? Eric: We've got a couple others. One of them is called foreign buyer finance. Okay, this is a real interesting one. This is when a US company is selling capital equipment to a foreign buyer and when that capital equipment quotation gets to the foreign buyer, what we see often is they'll go to their bank. In some of these emerging markets, developing countries, the buyer will go to the bank and say, ok, you know, I got a quotation for, let's say, you know, john Deere equipment, ag equipment or Caterpillar, construction equipment or mining equipment, whatever. They go to their bank and they say I need to borrow to pay the US company for the equipment. And when they get a term sheet from their local bank, if you're familiar with international business and international finance, the cost can be much higher than what we're used to paying in the US as far as cost of capital Cost of capital I've seen even triple and quadruple in some of these developing markets. And then the buyer the deal falls to the wayside because the buyer can't afford to pay the bank all this cost associated with the capital. So in situations like that and kind of high cost capital markets, we can get involved and find a lender, as long as we've got good audited financial statements and they meet credit standards, we can find a lender to give that foreign buyer a term loan, a three to seven year term loan, of which we guarantee repayment of to the lender, to buy that US made capital equipment. So, in simple terms, we can finance a foreign buyer when the foreign buyer is buying US made equipment, and what we have found is the US companies that really know this product inside and out use that as a competitive advantage. They're saying, hey, sure, on one hand, here's my quotation for the equipment and on the other hand, I can get you finance if you need it. And I can get you finance if you need it. And the companies that do that well, I mean their sales shoot through the roof because now they become this finance facilitator for foreign buyers to access cheaper capital, which we've even seen companies where maybe they're 10% higher on the bid than some of the other countries, but they're saving them 15% on the finance. Dave: Yeah, I can see that. Yeah, I can see that that's really clever. I was familiar with the first two pieces, but I really was not familiar with that. I mean, yeah, that's a real competitive advantage. I mean it makes you wonder how a company in I don't know pick your country, brazil, that you know is trying to compete Like how do they compete when they can't? I'm guessing that they probably don't have the same type of capability to offer you know these, you know more attractive financing rates. Eric: So, yeah, that's a great point XM Bank we're also referred as an export credit agency, eca. So every developed country in the world has the equivalent of us. Out of, let's say, roughly 200 countries, there's 120 of us representing the nation of each country. So what we know is, as it relates to international business, there are, you know, foreign. When there's foreign competition in the tender, sometimes that foreign competition knows about their local ECA also. Right, so they could be offering the same thing. Hey, I can get you, you know, finance through my local ECA. You know name, a country, country. So we want companies in the US to be aware of how we can help them and support them, just like other member countries of partner ECAs do, because it's a competitive advantage and if they're not aware of it, it's a loss really for the exporter. And I mentioned four products. So we went over export credit insurance, the working capital getting the foreign buyer a loan, and then the fourth one. It came out about a year and a half ago. It's a new product that we're super excited about and it's really domestic project finance where there's an export nexus. And what I mean by that, david, is let's take an industry, let's take LNG. When an LNG liquid natural gas. When liquid natural gas projects in wherever let's call it Texas, when they go live and you've got a solid entity set up for the purpose of building an LNG plant maybe there's corporate shareholders, maybe there's individual shareholders, whatever it may be when banks take a look at this and they see that it's a domestic project finance structure meaning the off of any kind of contract will repay the loan Bankers don't like that. Bankers don't like project finance. If we look at a project where there's an export nexus and what we define as an export nexus is 25% of the sales will be exported we could potentially be a lender or a loan guarantor to that domestic project as long as there's going to be 25% foreign sales, and we could go down to 15% if it's a small business, so we can involve oh, that's really cool. Dave: Yeah, because I mentioned the bank is going to say, yeah, it sounds like a great opportunity. Go find some investors to fund this and then, once you start exporting the LNG, give us a call. We'll give you some working capital and you'll work with XM to ensure the receivables, but until then, hey, it's on you. Eric: That's it. That's the problem. That's where a lot of these projects get stuck in the banking system as it relates to traditional banking. They can't get the money they need to lift this project up, and it could be a great project, but yeah, banks like to see history right. I want to see your balance sheet income statement, cash flow last three years. Let me underwrite it Well, there is none. It's a new project and we're building it. Well, we can't help you Go find some investors, and that's typically the conversations. So, instead of these deals disappearing, as long as there is solid offtake agreements, we can look at that, potentially to repay the loan, and we do that on the foreign buyer side too. Dave: Yeah, and to be fair to the bankers I know many bankers and have great relationships If a bank is paying 5% for a deposit and they're lending it out at, say, 8%, by the time they pay their fees and stuff they really don't have a lot of margin left. So you know they have an imputed default rate. You know that they can tolerate of like half a percent, right, maybe 1%, right. I mean, that's just their model. Eric: Margins are thin, you're right. Dave: Yeah, and they're probably even I'm guessing even prohibited from saying okay, yeah, we'll finance this deal for you, but this is high risk. So instead of a 7% loan, it's gonna be 30%. I mean, the banks probably aren't even allowed to do. There's probably usury laws or something. Am I correct in that? Eric: Yeah, yeah. So they would definitely view the risk differently as a domestic project finance. But I would say, even more so, the regulatory issues involving domestic project finance probably prohibit the lenders from doing that. Dave: Even oh yeah, yeah, that's right. I never thought about that. Eric: There's definitely some challenges in that space. I never thought about that. There's definitely some challenges in that space. Dave: Yeah, that makes sense because really, from a holistic perspective, you would say hey, bank, this isn't your sweet spot. This is like venture capital, risk capital. Let them find a lender, like a hard asset lender, that'll charge a much higher rate, or let them raise equity capital to finance this. This isn't what you're designed for, mr First National Bank, Exactly. Eric: Okay. Dave: What are some of the limits, minimum maximums for these different products? Let's start with the credit insurance. Is there a minimum size that you all have insurance? Is there a minimum size like that you all have? I mean, I'm guessing if somebody has a hundred dollar foreign receivable that they want to insure, probably doesn't really make sense for everybody. So is there a minimum size? Is it a hard minimum or kind of a soft minimum? Eric: Yeah, that's a great question. So we don't have a minimum per se, documented minimum, but yeah, it's got to make sense right To go through the process. So I mean, we've insured receivables as low as a couple thousand bucks, so that's for credit insurance. For working capital we also don't have a minimum, but that's set by the lender. So we say hey, as long as the lender will do the loan, we'll take a look at the guarantee and most lenders that we have spoken to we probably would say that the minimum with most lenders is around a half a million for a working capital line of credit. And then on the foreign buyer side, again it's got to make sense to the lender. We don't have a minimum. Most lenders, I would say the minimum I've seen where a US lender would give a loan to a foreign buyer is also around a half a million. Maximum, no maximum, but anything above 25 million has to go to our board. The largest we did in the bank's history was in Mozambique, for an LNG facility was 5 billion. Oh wow. Dave: And then are there limits on the working capital and credit insurance, similar limits that require board approval. Eric: Anything above 25. Yep, it's the same 25 number, correct, which it's. You know it's not prohibitive, it just adds another layer to the process. Yeah. Dave: And even again, even if XM wasn't involved, I know a lot of banks, just you know, when loans get above a certain amount they want to syndicate them with other banks, just for their own risk. And I think a lot of times those syndication amounts for a medium-sized bank will start in that 10 to $25 million, as I understand it. And then what about the domestic projects that have 25% export expectations, any minimum or maximums there that you've seen? Eric: So I would say there's no hard set minimum, but the soft minimum I'm seeing is probably 5 million plus and the reason for that is the SBA, the Small Business Administration, also a federal government agency. They have similar products that go up to five, so this will take it past five and we don't want to compete with another government agency. They have similar products that go up to five, so this will take it past five and we don't want to compete with another government agency, so it's five below. Sba might be a better fit. Five above we're probably the only game in town. Okay, zero to five, taking some notes on this Five plus. Dave: You know, one of the other interesting things is we've had this conversation that if you think people have never heard of XM, they're even, I think, less likely to have heard of the ICDISC program. You know we specialize and what's interesting is how is the number of parallels? I mean, the thing that I can't, you know that blows me away is how logical everything is with XM. Like you know, there's a, you know there's a perhaps a belief that some government programs, agencies that there's no real logic to it. It was just it was some negotiation in Congress and they had just some arbitrary rules. But you know, as I kind of look at these, they just all seems very logical, right? And you know, like you know, above a certain amount you need board approval Again, just like in a bank, right, when they're doing a $25 million loan, it's probably got to go to a loan review committee or something. But the other thing is there's some similarities between XM and the ICDISC and one of them is the 51% US content. Can you explain how that works with XM, because I think it's pretty much the same as ICDISC. Eric: To my knowledge it is also yeah. So it goes back to really the mission right Creating jobs through US exports, and we want to stimulate US manufacturing. So we can't support a trade where you know Houston companies buying from China and sending it down to you know name a country in South America. There's no value add for the country. So Congress basically put a policy to the agency that says anything that we support has to be greater than 50% US content. So another way of saying it's just 51%. Right, majority of the product has to be US content, and the way that we calculate that is we look at the cost. So if they're selling a widget that they sell for $100, but it costs $70, we're going to look at the $70 and say $30 of that, 70 needs to be US content. So that's really we look at the cost and the majority of the cost needs to be US made, whether it's product. Dave: Or another way of saying it is no more than $36 foreign cost Yep, that makes sense. Eric: And if it's a service, by the way, sometimes we get these service questions, by the way, because sometimes we get these service questions where, hey, you know, I'm an engineering company designing, you know, a refinery plant for a foreign buyer. How do I look at that as far as US content? So what we do is we say, okay, start with your invoice. Right, whatever you're billing out, if it says engineering services or CAD drawings or whatever, take that and then look at the cost and greater than 50% needs to be US citizens or green card holders as part of that cost for services. So we basically look at the citizenship of the provider for evaluating US content and the cost. Dave: Yeah, and that's somewhat similar to the ICDISC really only includes two types of services that are eligible engineering services and architectural services for foreign construction projects or services that are an integral part of the sale. You know, like if you sell a product for a million dollars and there's a $200,000 installation service, as long as that's an integral part of the, you know the project that qualifies, you know that service does. But yeah, that's interesting. So let's say somebody says hey, you know, eric, I really like the sound of this and I'd like to talk to you. But you know, I just feel like you know, you're probably a lifelong government employee. You probably want to work right out of college. You don't know what it's like to sit in my shoes. You don't know what it's like to have been on the private side. You know having these foreign customers. What would you say to them? Eric: Yeah, so being a government employee is new to me also, yeah, so after college I started at a company and worked there for a decade, grew into sweat equity. I was a part minority shareholder and I was a customer of Ex-Im Bank for 10 years. Yeah, we were a company that exported capital equipment all over the world, but with a concentration in Sub-Saharan Africa. Okay, and we grew rapidly with the help of Ex-Im Bank. We used all the products of credit insurance, the working capital, getting the foreign buyer a loan and that really became a competitive advantage to the company. Because we looked at ourselves saying, hey, we're an equipment supplier, but so is the other hundreds of companies around, if not thousands of companies. How do we make ourselves different? And the finance became very important to that conversation, because you can Google, search equipment companies in the US and you're going through thousands of pages trying to find an equipment supplier. But not everybody is saying, hey, we have financial solutions too. If you need them, we can get you a loan. We can sell to you an open account with our insurance. We can get the capital we need to fill these export purchase orders. We can get the line of credit that we need to send bid bonds and performance bonds to some of these large tenders. So, going back to your question, I've been at Exxon for seven years, but the majority of my career was in the private sector and being a minority shareholder of a company that used the bank that I work for now to grow a small business. Dave: What a great story, like it would seem like you have the perfect background for your role I mean, you're actually a customer for your role. I mean you're actually a customer. So the private companies that you're trying to help you really do understand what it's like to be in their shoes. Eric: I think most employees that work here at ExxonMobil found we're very service oriented. We like to help. We like to help. It's fun for us to help. It's fun for me to help. The best part of my day is meeting small business exporters, helping them become aware of all the resources that are available to them to become more competitive and grow, like we did when I was with that company. Dave: Yeah, it's just amazing how similar our days are. That's also the favorite part of my job is when I get a phone call from somebody and they say hey, you know, bob said I should call you. You know we're. Our exports have really grown a lot, and there's this thing called ICDISC and you know, tell us about it, are we the right fit? And it's great to be able to help them. Oh, I was just going to ask you something. Oh, what about indirect exports? Do they qualify under an indirect export? Eric: Great question, yeah, so under the working capital it does. So if you have an exporter that's selling to you know name a major company, let's say a major oil and gas company who in turn is exporting that out, we call that an indirect export. That does qualify them to get the capital they need to fill that order. Dave: Yep, Another parallel with the IC disk. The IC disk is the same way. Yeah, Most of our clients are actually indirect exporters. So some of the products would not be as beneficial, you know, like the credit insurance, for example, because they don't have any foreign receivables. But you know, they don't have any foreign receivables, but they still may have use for some of the other products. Okay, so I've got just a couple more questions. Eric: Well, first off, is there anything we didn't cover that you wish I had? I would say there's other government resources that every exporter should know. Dave: Okay, what are those? Eric: Yeah, so one of them is the US Commercial Services. They're a part of the Department of Commerce and they've got an office in every major city in the US. I think there's a hundred, if I remember right, a hundred US Commercial Service offices scattered throughout the US. If you're in Houston, there's one in Houston. Great folks, we work with them closely. They've got some really good products as well for exporters. One of them is called the Gold Key, and the Gold Key it basically connects buyer and seller. So once the agency understands the company, they met with them. They understand the company, they understand what they're selling. They have to be what's called export ready. So an existing business that's already selling, let's say they're successful here domestically and they want to export. You know, let's say that to the, to our closest neighbors, first Canada and Mexico. But they're like hey, I don't, how do I even do that? How do I find a buyer, how do I find a distributor in these countries? That's really the first step in kind of the. The maze of exporting is first you got, you have to have a buyer. We're kind of second to that right. Once you have a buyer, then it's money talks and then we get involved. But even before us. The commercial services can get involved and under the gold key they can find distributors, partners, buyers in foreign markets. Wow, yeah, under the gold key. So they basically, once they understand the business, they work with the embassy in that country and say, hey, I've got, you know, bob, here's his company, been around for 10 years, successful in the U? S, but they want to start with Mexico. And can you find them buyers, can you find them distributors? And they try to play matchmaker. So they generate a list and they recommend going to the country that you want to export to shake hands, stare them in the face, sit down with them physically, because that's another important thing in international business you can't just stay behind the phone or email. You really have to go to these places. Dave: Wow, so that's amazing. Now the bad news, Eric, is you and XM may have just dropped to number two as far as my favorite government agency. I mean, depending on where a company is, that might be even more valuable, right? Because without the customers, they don't even need the other products of XM. That's really cruel. Eric: That's right yeah. I mean they need a buyer before they come to XM. They need a foreign buyer and commercial services can help with that. Dave: So be careful. You're about to list some other agencies and may further knock you down on the priority list, so be careful there. Eric: That's OK, we're here to help. So you know. Another problem with small businesses you know I'm selling domestically. You know successful I'm selling domestically. You know I'm successful. Maybe I'm running on thin margins. I don't have the capital that I need to go into all these countries and spend all this money and cross my fingers that I get business. And I just don't want to spend that kind of money and risk that kind of money because I need to keep my lights on and pay employees first. So there's something called the STEP grant S-T-E-P grant. Dave: STEP grant. Eric: It stands for statewide trade export promotion, so most states participate in it. It's federal money given to the states who in turn give grant money to companies who are looking to export, and they can use that grant money for travel you know, hotel, stay, airfare. They want to do website translation on their website from you know English to Mandarin and Spanish to. You know capture half the world. They want to. You know create design, create print flyers. You know any kind of marketing collateral that will aid them in promoting their company to foreign buyers. This is a reimbursable grant, which means you apply for it. You can say, hey, I want to go to Mexico, my airfare is going to cost this, my hotel is going to cost this, conference in Mexico is going to cost this, and all together it's going to be $10,000. So you apply for it and then, once approved, you can get up to 75% of that back. Dave: So you have to actually spend the money. Eric: First you got to spend. That's the key thing there. You got to spend the money, but you got to get it approved. Once it's approved, then you spend the money and then you come back and give them your receipts. Dave: Wow, that's pretty cool. Does that fall under one of the federal agencies? Is that kind of the ultimate umbrella, or is it really more of a state by state program? Eric: In Texas the Department of Ag is administering the fund and I think it does vary state by state on who holds the money and approves it and disperses the money, and I may be wrong, but I think it goes up to $10,000. It's either $7,500 or $10,000 max amount that can be approved. Okay, you can apply every year. Some companies do that. Okay, and what else? Are there some other? The SBA, small Business Administration Sure, most people know them for domestic business, but they also have an export arm called the OIT, which is Office of International Trade. So they have export finance products just like we do. They're not competitive to one another. They're slightly different in various aspects. They can get you working capital, usually for smaller loans, or they can get you something called an international trade loan and what that is used for is like, hey, I need to buy some capital equipment to go into my factory and it's going to cost a million bucks and it's going to generate export sales, that kind of finance structure. Dave: Is the structure kind of the same, or does the borrower have to put up a bigger percentage? Or do you know? Eric: For the international trade loan. I think it's similar. They guarantee the lender just like we guarantee the lender. The international trade loan I think it's similar. They guarantee the lender just like we guarantee the lender and lenders. You know, we like to say the lender makes the decision because our guarantees are slightly different than one another. So some lenders will say, hey, I'm more comfortable with XM, or hey, I'm more comfortable with the SBA, or hey, this is above $5 million. The only one you could do is XM Bank. So it's really up to the lender to evaluate the guarantee and what fits them best. Dave: Well, that is awesome. Any other government agencies that you tend to work with regularly those are the big ones. Eric: They'll always be in the same circles the SBA, the commercial services, and ourselves in the same circles, promoting as much as we can to our communities. Dave: That's awesome. Well, this has been so informative. I really appreciate the time. I just have two more questions, and they're really kind of fun ones, okay. So the first one is if you could go back in time and give advice to yourself, like right, when you were graduating college, what advice might you give to yourself? You know, with the benefit of hindsight, you know, if you kind of go back in time. Eric: What advice might you? Dave: give to yourself. You know, with the benefit of hindsight, you know if you kind of go back in time what advice might you give to yourself, you know? Things to do instead, or do sooner, or what comes to mind. Eric: That's a really good question, you know, going back in time, I would say, for the company that I worked for and some of the things that I don't like to say did wrong. But if we could repeat it and how we would do it differently. When the business grows and we grew fast our operational costs also grew fast and I think if we were better controlling the operational cost when there was a dip in revenue, there wouldn't be so much growing pains or slowing pains. I think getting a better grasp operationally on a business when it's going through the growth phase is key to its long-term success, because a business is not always going to accelerate up. There's going to be peaks and valleys and as long as you manage the operational cost of the company, it can get through. You know look at COVID right Nobody predicted that how many businesses went through all kinds of painful experiences. So that, going back in time, just from a business standpoint, I think that would have been super helpful in our judgment and assessment of looking towards the future. Dave: Okay, I really like that. Well, we just have one left, and this one's even more fun. Don't think about this, I just want. It's kind of a snap answer. Okay, so you're a native Texan, right Native Houstonian, tex-mex or barbecue. Eric: Oh, I got to go with Tex-Mex. I love barbecue, barbecue. Oh, I gotta go with tex-mex. I love barbecue, but you know the chips and queso and salsa and guacamole. Dave: I don't think everything competes with that. Yeah, I, I asked this question of all my guests and and I had two answers that were interesting. One answer was if it's, if I know that the food is going to be average, I, I absolutely would take the Tex-Mex, because Tex-Mex has more tolerance for averageness. Ok, they said. But if it's going to be world class, then they would take the barbecue. But they don't want mediocre, tough, dried out brisket. Ok, so I'm like, well, that's a good one. And then I had a guest telling me about I forget the name of the place, but it was a place that had like brisket tacos or brisket enchiladas, and they basically said both, they'll take both. Eric: There you go. I like that. Dave: Yeah, I am with you. If people want to get ahold of you, what's the best way to reach out? I know you're on LinkedIn. Are you very active on LinkedIn? Eric: Not super active on LinkedIn, but I'm very accessible Cell phone, email, office phone. You can always get ahold of me. Dave: What's the email address? Eric: So ericmiller M-I-L--LE-R X-M-E-X-I-Mgov gov. Dave: So eric.miller@xmexim.gov and if they want to just call you, what's the best number to reach you? Eric: at 713-306-7969 awesome. Dave: well, thank you so much for taking the time to come on here. This may be the most information dense episode I've ever done for an exporter. Usually it seems like we've got one or two good nuggets, but we may have a dozen takeaways, so thank you so much for making time out of your day and this has really been fun. And don't be surprised when this goes live if you don't have a few folks reaching out to you. Eric: I look forward to it. Thanks for having me. It's been an honor. Special Guest: Eric Miller.

In today's episode of the IC-DISC show, I sit down with Dan Corredor, the owner of Strategic CFO, to discuss how his firm is revolutionizing the accounting landscape through near-shoring in Mexico. We explore Dan's journey starting in Colombia and arriving in Houston, where his bilingual skills have helped Strategic CFO carveout a unique niche. Our conversation reveals how Strategic CFO blends accounting expertise with innovative strategies to strengthen businesses from the inside out. Through insights on US GAAP, technology, and building capable teams, Dan shows us why accounting is about more than compliance - it's about fostering strategic growth. Near the end, Dan offers us personal anecdotes about cultivating early savings habits and his culinary interests. Our discussion provides a blueprint for navigating accounting challenges with an international perspective and strategic foresight to propel businesses higher.   SHOW HIGHLIGHTS Dan Corredor's firm, Strategic CFO, is leading a cost-saving revolution by near-shoring back-office accounting services to Mexico, significantly reducing costs compared to traditional US-based services. Strategic CFO was acquired by Dan Corridor in 2017 after the passing of founder Jim Wilkinson, and Dan has continued to evolve the company while maintaining its legacy. We discuss the importance of differentiating between bookkeeping and accounting, where bookkeeping involves recording transactions and accounting involves analyzing and interpreting financial data according to US GAAP. We highlight how an effective accounting team can steer companies beyond outdated systems, and how technology is transforming financial statement preparation. Dan emphasizes the symbiotic client relationships that result from a combination of coachability and strategic foresight in financial matters. There's a discussion about the challenges in the US accounting landscape, including talent shortages and wage inflation, and how near-sourcing with Mexican talent offers a solution. The near-sourcing model involves Mexican employees supervised by Texas-based controllers, ensuring quality control while offering CFO-level support to US companies. We touch upon the personal side of Dan Corridor's journey, including the importance of early financial savings and sharing personal culinary favorites, to connect with the audience. Strategic CFO brings a unique international perspective to each client they serve, emphasizing their hands-on approach and operational expertise. We wrap up with anecdotes and stories that provide insight into the practical application of financial strategies and how companies can scale efficiently with the right accounting support. LINKSShow Notes Be a Guest About IC-DISC Alliance About Strategic CFO GUEST Dan CorredorAbout Dan TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, my name is David Spray. Welcome to another episode of the IC-DISC Show. Today, my guest is Dan Corredor, the owner of Strategic CFO. Strategic CFO is like many virtual CFO service companies, except that Strategic CFO has an interesting twist that they implemented a little over a year ago. They use what Dan calls near-shoring similar to offshoring, but done in Mexico, where it is very near, and we go into great detail about how they have developed a model that allows for providing professional grade back office accounting for 60% less than a traditional US-sourced solution. There's a lot of great ideas in here, whether you're looking at developing a professionalized accounting group or not. I hope you enjoy this episode as much as I did. Good morning, Dan. Welcome to the podcast. Dan: Good morning David. Thanks for having me. My pleasure, my pleasure. Dave: So where are you calling in from today? What part of the world are you in? Dan: So we are in Shurgland, texas, which is a suburb of Houston, houston, gotcha. Dave: So let's so. You're a native of Houston. Dan: No, I was actually born in Bogota, colombia, in South America. Dave: Okay. Dan: My family moved to the States when I was a baby about six months old, grew up First 10 years in Ohio, moved to Houston area in 1976, and we've been here ever since. Dave: Oh wow, Did y'all speak Spanish at home then? Dan: We did. That was my first language. My dad always said speak Spanish at home and I don't care what you speak outside of house. We learned English outside the house when I went to school and we still speak Spanish today, and my kids do as well. Dave: That's awesome. I'm so jealous. My heritage is German and both of my grandmothers were born in the Dakotas in German communities. They only spoke German until they started school, but then they married non-German guys and then it was during World War II where, you know, speaking German was kind of frowned upon, so we lost the language. I'm always jealous of you truly bilingual folks, and bilingual with no accent in either language, because I'm assuming your Spanish has a nice Colombian accent. Dan: Right, it's pretty good as well. Yeah, it's certainly paid off. I really think that I've gotten a couple of jobs I've had in my career because most of the time I spoke Spanish and could be in Latin America. Dave: That's awesome and good for you for keeping it going to the next generation. I'm told that's easy to kind of let it slide. Dan: Especially as kids grow up, you know, get a little bit older and they start talking back in English and we have to kind of remind them. But it works. You know, my kids are not 20 and 21, and they both are fluent Spanish and English. Dave: That's awesome. What a great skill set to launch them into the world with. Dan: Yeah, we're proud of them. Dave: That's great. So you end up in Houston at some point, at least when you went to college. Dan: Yes, I went to University of Houston, got an accounting degree there and I started working in Houston in oil and gas production first, and then oil and gas services. So yeah, it's always been in Houston, except for two years in Dallas and then almost about four years as an expat in Mexico. Dave: So other than that, always based in Houston- Okay, yeah, I tell people you go through it's like the stages of grief. I tell people that like it's the stages of Houston, right, like when you first get here at least this is what I went through you hate it. There's like it seems like an ugly city. It's flat, you know the traffic, the humidity in the summertime. Then after a while you start to tolerate it and then at some point it kind of gets in your blood and if you ever move away you're like, wow, I really miss that place. That place has got a lot going for it. Dan: Yeah, I've always enjoyed it. You know I've always liked the Houston area and love Texas. Houston has been great. I love the climate, except for these January February days where you know we made it up in 32 degrees. I don't like that. But I don't mind. It has grown a lot. The last few years has experienced a tremendous amount of growth. Dave: Especially where you are. Yeah, I remember when Sugar Land was the middle of nowhere, the country it was nothing. Dan: It was nothing. I remember going to school elementary school we'd go to private school, st Thomas Memorial, and I'd tell kids where I live and I thought I was crazy. You live where you know, but it was only a 30 minute drive back then, so I know. Dave: Well, let's talk about strategic when. When did you become involved in strategic CFO? When did you acquire it? Dan: So I acquired the business in October 2017. The business has been around since the mid 90s. The founder, jim Wilkinson, was a colleague of mine and I actually met him in the 90s and it was ironic. I met him because my brother-in-law and his family hired Jim Wilkinson back in 96 or 97 to help him on a project as a CFO and my brother-in-law said, hey, you got to meet this guy. He's a really nice guy. You know, in Houston is your area. So I met him back then and you know, jim and I had similar backgrounds in regards to the type of things. We worked on our personalities, so we would do lunch and breakfast, you know, quarterly or every six months. Over the years Never worked with each other or for each other, but we'd networked a lot and we'd run into each other. We stayed in touch. We even referred business back and forth to each other, so that you know Jim is the founder and started this business, started the brand, did a great name, developing the brand, the strategic CFO, and he started our online business where we sell a membership subscription and some coaching workshops. Jim was very much a strategic coach. He loved the academic side of accounting and operations. He was very involved with the entrepreneurship program at the University of Houston, so all that really strengthened the business. And, unfortunately, jim went to bed one day in 2017 in the summer and didn't wake up and passed away. So it was really sad. I unfortunately didn't hear about his passing for two or three months afterwards and I was not able to attend his funeral, but I heard it was a beautiful funeral with, you know, a thousand people. So that was Jim. You know he was a network, he had lots of friends and you know so when he passed, I was at a company called Opportun and I was a restructuring group and I was finding an opportunity to love that firm. They've done a great job over there. But when Jim passed, you know, I thought to myself. You know, I've always been, you know, kind of un-perno myself. I've always had the back of my mind wanting to do something on my own. So when Jim passed, I approached the family and asked them what are they going to do with the firm? And they really didn't have a plan of action. So they put me in touch with their attorney and, make long story short, I acquired the firm in October 2017. And it's been great ever since. This is a year six. I can't believe we've already been here six years and we've had a great firm, great growth. We've got really good people. The brand continues to build and strength and it's a well-known brand and I meet a lot of people that a new Jim you know, and they go yeah, I knew Jim, you know, and congrats for taking over Jim's business. You know, so to me it's a privilege to take on his legacy. Dave: Yeah, no, I really like Jim. I think the last time I had dinner with him he had a restaurant I forget where it was in West U that he liked to go to and we'd had dinner or drinks probably after work one day, but that was about a year before his passing, and also like you. Well, no, I think I did hear about it, but I was out of town, I was in, I was out of state and was not able to make the funeral. But same thing I heard. Yeah it was well attended. Well, I'm glad that you reached out to the family because I'm sure they were. His wife was likely in shock from the whole thing. And so that probably worked out well that there was somebody that she knew him had a clean relationship with. So that's great. So talk to me about who are the companies that you all are best set up to serve what's really your sweet spot and who you really can add value to Right. Dan: So people ask us what are the typical companies you work on and boy it's a wide range Our clients, our smallest clients probably seven million in revenue, and our largest client is literally a 13 billion public and trade company. Dave: So it's a wide range. Dan: Now what's right down kind of the middle of the fairway? It's that typical entrepreneur or family owned business that started small and grew and is now doing 40, 50, 80 million hours in revenue and they need to professionalize the back office. It's the companies that started with very basic financial statements and cash reporting and things like that and have bookkeepers and then they move on and now their bank or their partners or investors somebody or the business owner needs professional financial statements. So we professionalize the back office, we professionalize your financial statements. I always explain to business I have this same discussion almost every single day with business owners there's a difference between bookkeeping and accounting and everybody knows bookkeeping. Everybody does bookkeeping. Bookkeeping is entering transactions into a system. You enter a PAR, you push a button, generate a report. That's bookkeeping. We don't do bookkeeping. We don't do that clerical, administrative entering transactions. We will do it as support staff, but we do accounting. We apply accounting principles based on US GAF to those transactions and it starts with everything on the P&L and everything on the balance sheet. You can go to line by line and there are some accounting principles that apply to each one of those transactions. Perfect example Yesterday I was at a client meeting. It's been a fairly new client and they have a lot of manual processes and the transactions on the bookkeeping side. And we said, hey, we can automate this and then all you're going to need is the controller and the accounting manager. And his response is wait a minute, but if you automate all this transactions, I don't need anybody. And I was like well, you're automating the bookkeeping, you're not automating the accounting. Somebody has to apply the knowledge of accounting principles to all those transactions to make sure you have the right P&L and the right balance sheet. But if you just do the bookkeeping, then all you have, in whatever accounting system you're using, is transactions in a system that are really meaningless because you don't have the right margins, you don't have the right assets, you don't have the right liabilities, because you're not applying accounting principles. So oftentimes we find ourselves as a firm educating and coaching the business owners on what is accounting. Why do they need financial statements based on US GAAP? It's not just for the public and credit companies that are trading on the Dow Jones, it's not for those billion dollar companies Every business if you don't have the proper financial statements the financial we call it financial tools, because it's more than just financial statements. If you don't have good financial tools, how do you make decisions in your business? How do you know what projects are making money and not making money truly based on accounting principles, not on a cash basis? So we have to often educate them. So our ideal company is one. Well, one is the entrepreneur or business owner that wants to listen, because we have some that they don't know what they don't know and they think. I had one business owner not too long ago, probably four months ago, telling me that these financial tools and financial statements are just purple unicorns. I was like, okay, so if somebody doesn't want to accept the fact that I've been doing this for 32 years and we know what financial statements are and how they improve your business, if that business owner thinks that they know more than we do, we can help them. If they don't want to be coached, if they don't want to listen, we can't, and we've run into those. We've run into business owners that they think they know everything. They've run their business 20, 30 years, which they run very well. They have good widgets that they make, but they don't know anything about financial statements or accounting principles. So that's the ideal client when it's coachable when it allows us to bring process and procedures and US gap so that they can have not only good financial statements, which are all historical in nature, but also what do we do with that data? Now we have to interpret that historical information, forecast it, analyze it, look at margins so that the business owner can make better decisions about the future. And we that's hence our name, strategic CFO we always want to think strategically. What do we do with that data? To interpret it so that we can properly forecast and know where the business is going and keep it financially healthy. The balance sheet and the P&L are going to describe to you the health of the business and we want to make sure it stays healthy. So that's the ideal client. Dave: So it sounds like yeah. So it sounds like really it's. Companies are kind of a victim of their own success. You know, companies who have, I mean, a $5 million company who stays static for 20 years, you know probably can't add as much value, but that $5 million company that quadruples in revenue over five to 10 years, where they outgrow their accounting system, their processes, the team. It sounds like that's where the opportunity starts, with you all. Dan: That's right. That's right when they want to grow, they want to professionalize the back office, have professional finance savings. Now there's a lot of companies do what we do and since I bought the firm, I've always thought how can we differentiate ourselves? How can we really stand out and bring something to the table? So initially, the first five years of voting the business, I thought that you know we're and it's true, we are very different because we do have a tremendous amount of operational experience. Myself speaking, I've been CEO of companies with as many as 2000 people. I've been general manager of business. When I was in an expat in Mexico, I was general manager for that business after first being the CFO. So we've got tremendous, got tremendous operational experience. I've been interim CEO for one of our clients as strategic CFO. We have that operation, and operations and accounting always have to talk to each other, Sure, but about a year and one month ago, year and two months ago, we really came up with a differentiating factor where yeah. So we, you know I've always been against outsourced accounting and I've been asked previously if we do outsource counting. I've always said no and I don't want to do it because the companies that exist today that do the traditional outsource accounting. I have two main problems with them. Number one is that they are very far removed from the operation. They are located somewhere else. They never said foot in the business, so there's not that connection with operations. Number two is that those companies do outsource accounting. They're working on 10 other clients at the same time, so the business doesn't really get the biggest bang for their buck, and that always bugging as being an operating guy. So, out of a need, one of our clients who came to us said Dan, we love y'all, we love these two people you have here. They're doing a great job, they find us. They finally got us professional accounting, financial statements and these tools and we budget and forecasting all this stuff. But we can't afford you because we're charging U of S rates and we have to charge US rates. We have to pay our people good wages, fair wages. We have to have a little margin in it. We're not going to become millionaires out of this, but we have to have a margin. So I told the owner. I said you know what? You're right, you can't afford us, you're too small. They were seven million in our business. So I went to the drawing board and came back a couple months later and we have developed now a product called mirror sourcing. Mirror sourcing is outsourced accounting, improved and on steroids. We took those two things that I don't like, which is far removed from the operation and working on multiple clients at once. So what we've done with mirror sourcing we will hire an accounting team and it's it starts. It could be a team of two kind of the typical model. It could be one, it could be 10. We actually have one that's 20, but the typical model is a controller and accounting manager. We hire them. They're dedicated to your business and they are on live every day. They only work for you. They are on teams. You go to the group and teams and join a meeting. You're talking to your accounting teams, like having them down the hall Monday through Friday. So that that eliminates that they only work for you, they're not working for anybody else. Number two the onboarding of that team and quarterly visits are on site. So the business owner, the operating team, the clerical staff. They get to know the accounting team because the onboarding is there and on according to the basis. They fly in and they sit there and they do a quarterly review review with you and they're usually there three to five days with you at the office, working with you, hand in hand. So now you start developing that relationship. Now you have a connection between the accounting team and the operations and it's dedicated team and we're able to offer that at a 60% savings. That's six zero, wow, that's huge. Yeah, because the team happens to be located in Mexico. Now why Mexico? Mexico? I spent four years in NexFAT there. I got to work with all the big four firms, got to establish a good network over there in Latin America and Mexico and Columbia and other places. There are very strong professionals. And let's just talk about accounting. The accounting professionals. The accounting professionals that we hire usually have big four experience. They work for US companies. They're all bilingual, they speak very good English, they all know US GAAP and they just happen to work remotely for that period of time between their visits and the wages and economy in Mexico is much different than US. A controller in the US will easily a qualified controller. Let me start with that, because I've seen people labeled controllers that aren't. A qualified controller is the $150,000 person in the US. An accounting manager is going to be $85,000, $90,000 person. In the US. You're spending with benefits and 401k and taxes and everything else. You're going to spend over $300,000, $350,000 on just two people for a small 10 million dollar business. That's a big pill to swallow, sure, we realize that. So we've brought that cost down. So for $12,500 a month, which is less than half of what you'd pay here, you get a team of two qualified professionals dedicated to your business that are providing this professional accounting. We started this out of a need with one company we're up to 10 and we had a very. I have got a contact at a very large public-traded company and I was telling her about this over dinner. She came back to me a couple of days later and she goes you know near source thing you told me about, can you scale that up? I said absolutely. Make long story short. We've opened up an office in Monterey, mexico, only for this publicly-traded company of 13 billion and we now have yeah, we now have I think we're at 22 accounts and that's probably going to be over 30 or 40 accounts because again, any business will benefit from reducing costs. So this large public-traded company is shifting some accounting rules and it could be AP accounts, payable accounts, receivable fixed assets, inter-company cash applications, whatever the needs are. We're able to provide that a huge savings. So with that we've developed near source and it's a successful model. It applies to any business anywhere in the US but we're able to finally bring professional accounting the work done remotely but it's on-site business every three months for 60% savings. So that's a new differentiating factor for our firm at strategic CFO and we think that's going to really take. It has taken off. We think it's going to be a change, game changer for us and our future as a business. We'll continue to do everything we're doing. We're not leaving that, but we're just adding to our revenue stream. Dave: That's really. I really appreciate the innovation of that, and it also just seems like the college students just are not enamored with entering the accounting profession right. There just seems to be staffing shortages and whereas it seems like these countries outside the US there's a greater enthusiasm to do the work. Dan: Yep, there's a large pool. There's a large pool there. You're right. I heard numbers as high as 30% less enrollment in accounting in colleges over the last couple years than historical. So there are less people entering the accounting profession. A lot of them have retired. A lot of people have simply left the accounting profession. It can be grueling, it could be long days and long month ends and long quarters, long year ends. So people have found other ways to make a living and that means it's supply and demand. That means the ones that stay in place, that are controllers and account managers. The wages they're demanding higher wages because there's less of them and there's high turnover. That's. The other thing is that companies, if they hire us in our near sourcing team, if there's tone or turnover, that's our problem, it's not the company's problem. We will fill in a role, fill in a position, if somebody leaves the near sourcing team and we have such a large stack of resumes that we're able to do this quickly. So now we've got now over 30, 35 accounts in Mexico working for us and we hope to double that number in 2024. So we are going to have a very large pool. We have a formal legal entity, we've got Bank account in Mexico, we've got any in Mexico. Payroll in Mexico. We're paying our taxes in Mexico, so it's all legit. It's all meeting all the guidelines and labor requirements that we do in Mexico. But even with all that, we're able to save US businesses a tremendous amount of money. Dave: That's awesome, and I was just reading about a new Department of Labor ruling making it even more difficult for companies to have contractors. There's always this desire by the federal government to have as few people classified as contractors as possible, and it seems like your model avoids those issues as well, because these aren't even US contractors. Right, that's right. Dan: That's correct. Yeah, they're all our employees but they're through a Mexican entity that we have down in Mexico. I failed to mention that. Each team is supervised by one of the controllers we have here in Texas. That controller is available if the client says, hey, I need to see somebody tomorrow. You know, all right, fine, controller myself can the car and go see the client and a month end all the. We have quality control. The controller here in Houston reviews a month and reports, meets with the team several times during the week. So the controller usually supervises three or four teams and that's how we're splitting it up. So the controller is busy full time. We'll continue to hire local controllers in Houston because we need more supervisors and are supervising these accounting teams in Mexico. So we do have local support and, being the strategic CFO, our specialty is CFOs, so we actually bring that to the table also. So a company, by signing up with us for the near sourcing, yes, they get the team, but they also get the support of our firm at the CFO level. So I've attended many bank meetings, many business owner meetings you know, strategic meetings with business owners because they are our clients and we're able to provide that CFO support by them joining our near sourcing model. Dave: Now I really, I really love that and I, you know, our clients tend to be similar to yours, you know, except all of our clients are privately held. You know median annual revenues probably 60 or $75 million, and so here's a question so there's obviously a cost to professionalizing the back office accounting function. Dan: What are? Dave: some of the financial benefits to having more. So, as I mentioned, there's a cost to professionalizing your back office, right, but I'm sure there's also financial benefit. What are some of the financial benefits that you've seen from companies who do upgrade their accounting function, the quality of their financial statement? I mean, I can imagine some benefits, but what are some of the benefits you've seen? Dan: Great question and oftentimes a new business owner that I meet will ask me the same question. So my response is if you do not do this, if you do not spend money on professional accounting we call US GAAP accounting whatever books and records you're keeping are wrong Period they're wrong. The most common example is cash basis account. If you manufacture widgets or you install something or you have contracts and you do not have the professional US GAAP accounting, you do not have a true picture of your margins Period Because it's cash basis. The world we live in is a world of accrual accounting and I don't want to get into accounting and accruals and all that, but it's a timing difference. The easiest example is an invoice and a counter-sealable. That is, in essence, the most basic example of an accrual. We have a timing difference. That's the economy we live in. Unless you sell the company that does not need professional accounting like we provide, is the guy who has a hamburger stand and sells burgers for cash and receives every day, for example, a little bit bigger than the hamburger stand or hotdog stand. We really can't help. For example, a fast food business that's point of sale. They sell a burger and fries and they collect At the franchisee level. At that small business level, they're not going to benefit from US GAAP accounting. Now the company that owns them and has multiple franchises will, because they've got accruals, they've got vendors and they've got this and they've got that and they buy machines the cash basis transaction. In the most simplest explanation, if I sell you something for cash and I don't have any inventory and I don't have any receivable or any payable or anything else, and I don't buy equipment, they don't need us. But that's a tiny business. That's what the US government calls a micro business. The companies we deal with are not micro businesses. The company we deal with have employees, they've got insurance, they buy equipment, they have inventory or they have complicated services or they have contracts that go over 30 days. There's some nuance and by not having professional accounting, you don't have a good financial statement. If you don't have a good income statement, how do you know your margins? How do you know what you really have? How do you know if you're losing money? By having them, not only do you have good reporting tools, but we've also increased your enterprise value. I've had several investment bankers tell me over the years that the difference between having the professional accounting versus not is at least a multiple of one of enterprise value. That's huge. If you've got a business that does a million dollars of EBITDA, that's a multiple of one. We just added a million dollars of value by bringing a professional accounting to your business. Not only does it help you in the short term which is running the business, because now you understand your margins and you're able to forecast and plan your cash flow and determine if you're going to reinvest in your business but we're also adding value on a long-term basis enterprise value those are the benefits and we're never going to cost you that added value that we bring to the table. We're not going to cost you a million dollars a year, but we're adding that value and what about Most business owners? Dave: will listen yeah and I can also imagine that, let's say, their bank starts requiring reviews or audits. I'm guessing that the audit fees by the accounting firm are probably going to be less if you're providing them professional financial statements that are gap basis already. Dan: That's right. So if somebody, first of all, I would recommend that everybody go through an audit because it's just good to have. But if you're required to have an audit, yes, an audit firm which we do not do audits we're not a CPA firm, but an audit firm will come in and do an audit First of all, they cannot complete an audit if you don't have professional accounting Right. So what the audit firm is going to tell you is you need to hire somebody, get your books and records per US gap so we can audit you. Otherwise, we're going to audit you and you're going to have a qualified opinion because you don't meet any of the accounting principles. And the audit firm cannot do that service for you because they get conflicted out. Dave: They can audit their own work. 30 years ago, I think they had more latitude. Dan: Yes, yeah, before my prior employer, enron, before Enron in 2000,. You know, the Sarbanes Oxley was formed. A lot of accounting principles were changed at that time. I think it was at that time that it was required that if you have to split your services, if you're going to be auditing, you can't be consulting and you can't be auditing your own work. So, and we've been hired by companies that are going through an audit, and audit firms have contacted us and said hey, I have a client, here's what they need help on to get their books and records to this professional level. And we are hired by the client. The audit firm comes in later, after we're done, and they can complete their audit and we're able to save us some money by doing that. Dave: But yes, I know that makes sense. What do you enjoy most about your role with the company? Dan: I love dealing with businesses that trust us and I've got, and most of our clients do, 95% of our clients do, or 99. We may have one or two that don't believe yet because we're still new, but I love getting involved with the business owner or business owners that trust us and they allow us to deliver over time. Because it takes time, it doesn't happen overnight. It'll take three or four months to develop a relationship. It'll develop six or eight months to finally get things really where they're seeing the deliverables. But I love seeing the transformation and we've got many examples in our firm of transformation where a company started with no financial reporting that was accurate to really good financial reporting and cash flow forecasts and budgeting and financial models where we interpret that data and everything's working. So watching that transformation is very rewarding. That's what I love the most and I love dealing with business owners on the operating side where we can add value as well. Dave: Sure, yeah, no, I can certainly relate to that. Well, I can't believe how fast this time has flown by. I've just a couple of kind of fun questions for you. Are you ready for some outside the box questions? Bring it on, I love it Awesome. So let's say you could go back in time and give advice to your 25 year old self. What advice might you give to your 25 year old self with the benefit of you know, the last few decades? Dan: If I were to go back to my 25 year old self, I'd say start saving money early. And that's what I tell my children. We had a discussion over Christmas In your early 20s. Unless you're really smart and talented and I wasn't you don't understand the time value of money and compounding interest. Dave: Yeah. Dan: Like you do now. And if I literally told my kids to go for Christmas, we had this exact same discussion. I said you know, take 25% of your paycheck and put it away in some account that you're never going to touch, yeah, don't even think about it. And by the time you're 50 or 60, you're going to see a huge nest egg and it's going to feel very rewarding. That's something I would do differently. I was. I got married late, you know, I was 34. So I worked hard. In my 20s I was already working for very large companies in nice positions controller roles. In my time I was 30 controller roles. So I was busy with making good money but also spending money, you know, getting the nice. I was really focused on getting the nice car, you know, traveling and, you know, not so focused on planning ahead and planning a family. Then I stumbled onto my beautiful wife and said, oh my God, I got to get married, you know. And then you know, soon after, kids, and then you know the house, and then but so anyway, that's the long response I would say early, mid 25, start saving early. Dave: Okay, yeah, I see I read a study once that said and it was a crazy number Like if you saved a certain you know amount of money you know call it $10,000 a year from the time you were 22 until you were 30, and then you stop saving, you never saved again. You'd have more money, like when you were 65 or seven. Then if you started saving at like 40, and you saved that $10,000 a year for 25 years, like you'd end up with less money than saving for eight years early on, which just demonstrates that whole time value of money. I think Einstein said the compound interest was the most amazing invention in the history of the world, or some crazy thing. Dan: It's crazy that the effect on that dollar saved early on is huge, you know, and I think I would do that different. Dave: Okay, well, here's the last question. I guess I have one and a half questions. I have the last fun one and then the last one will just be if there's anything we did and you covered, that we should have but the fun one is barbecue or Tex-Max barbecue. Okay, that's usually the most common answer. I stole that question. We helped Chris Hans, like the managing partner, and Boiler Miller. We were able to help them launch a podcast, and that's one of his standard questions that I've copied. I find it to be a fun question. Dan: It's a tough one. I almost said Tex-Max it's a tough one, or? Dave: I guess I should have asked you barbecue Tex-Max or authentic Colombian food. Dan: Yeah, I'd still go with barbecue or Tex-Max. Yeah, club with food is okay. I find it to be a little bit blander, but it's okay, that's good, I'm gonna knock it. My Colombian friends will hate me, but I don't know. It's good. Dave: Well, is there anything that I didn't ask you that you wish I? Dan: had. Well, maybe you know one other comment that I'd like to add about our firm, which is a little bit differentiated. Facts is, we have a lot of good international experience, not just myself, but my managing director, oscar Pinoe, cindy Dinn. They both have tremendous audit and international experience, oscar also interesting. If we haven't made it, let me tell you Oscar's story. We actually met in a small town in Argentina 23, 24 years ago when we were both at Weatherford. I hired him when I was in at Weatherford as controller for Latin America and he was an accountant that I hired. He ended up staying at Weatherford for 20 plus years, did very well, grew throughout the. You know the ladder at Weatherford and he left Weatherford a couple years ago and joined our firm. But we've got tremendous international experience, tremendous operational experience that could also add value to companies. Dave: So okay, well, yeah, that is great to know. Well, Dan. And then, if people want to learn more about the services, what's the best place to learn more Best? Dan: place to go to is our webpage, strategiccfocom. There's two C's in the middle there strategiccfocom. Or just call my cell phone. You know I don't mind people call my cell phone 713-501-7481. But we're still small enough that we touch every client I do. I like meeting all our clients and spending time with them. We're very involved with all of them. Myself and our managing directors are available to any one of our clients at any time. So yeah, we'd love to continue Jim's legacy and continue to build this firm. Dave: That's awesome. Well, Dan, thank you again for spending time with me today. I know the listeners are really good. Thank you, David. More and especially this near sourcing model. I think that's really intriguing, and I hope you have a great day. Dan: Thank you very much, appreciate your time and thanks for having me All right. Special Guest: Dan Corredor.

Tom: Thanks, Gary. Dave, as you know, for the last two weeks we discussed the critical distinctions between Roman Catholicism and biblical Christianity, and following that discussion we need to address the differences between Islam and biblical Christianity, especially regarding salvation. So let's begin with your chapter title: “How, or on What Basis, and to Whom Does the God of the Bible Offer Salvation?”Dave: Yeah, Tom, it's a good question. It's a logical question. The fact is that we have broken God's laws; everybody knows that. You break the laws of the state, and you can't tell the judge, “Well, let me off this time and from now on I'll never break the law again.” 

Dave Mangot, CEO and founder of Mangoteque, joins Coreyon Screaming in the Cloud to explain how leveraging DevOps improves the lives of engineers and results in stronger businesses. Dave talks about the importance of exclusively working for private equity firms that act ethically, the key difference between venture capital and private equity, and how conveying issues and ideas to your CEO using language he understands leads to faster results. Corey and Dave discuss why successful business are built on two things: infrastructure as code and monitoring.About DaveDave Mangot, author of DevOps Patterns for Private Equity, helps portfolio companies get good at delivering software.  He is a leading consultant, author, and speaker as the principal at Mangoteque.  A DevOps veteran, Dave has successfully led digital, SRE, and DevOps transformations at companies such as Salesforce, SolarWinds, and Cable & Wireless. He has a proven track record of working with companies to quickly mature their existing culture to improve the speed, frequency, and resilience of their software service delivery.Links Referenced: Mangoteque: https://www.mangoteque.com DevOps Patterns for Private Equity: https://www.amazon.com/DevOps-Patterns-Private-Equity-organization/dp/B0CHXVDX1K “How to Talk Business: A Short Guide for Tech Leaders”: https://itrevolution.com/articles/how-to-talk-business-a-short-guide-for-tech-leaders/ TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. My guest today is someone that I have known for, well, longer than I've been doing this show. Dave Mangot is the founder and CEO at Mangoteque. Dave, thank you for joining me.Dave: Hey, Corey, it's great to be here. Nice to see you again.Corey: I have to say, your last name is Mangot and the name of your company is Mangoteque, spelled M-A-N-G-O-T-E-Q-U-E, if I got that correctly, which apparently I did. What an amazing name for a company. How on earth did you name a company so well?Dave: Yeah, I don't know. I have to think back, a few years ago, I was just getting started in consulting, and I was talking to some friends of mine who were giving me a bunch of advice—because they had been doing consulting for quite some time—about what my rates should be, about all kinds of—you know, which vendors I should work with for my legal advice. And I said, “I'm having a lot of trouble coming up with a name for the company.” And this guy, Corey Quinn, was like, “Hey, I got a name for you.” [laugh].Corey: I like that story, just because it really goes to show the fine friends of mine over at all of the large cloud services companies—but mostly AWS—that it's not that hard to name something well. The trick, I think, is just not to do it in committee.Dave: Yeah. And you know, it was a very small committee obviously of, like, three. But yeah, it's been great. I have a lot of compliments on the name of my company. And I was like, oh, “You know that guy, the QuinnyPig dude?” And they're like, “Yeah?” “Oh, yeah, it was—that was his idea.” And I liked it. And it works really well for the things that I do.Corey: It seems to. So, talk to you about what it is that you do because back when we first met and many, many years ago, you were an SRE manager at a now defunct observability company. This was so long ago, I don't think that they used the term observability. It was Librato, which, “What do you do?” “We do monitoring,” back when that didn't sound like some old-timey thing. Like, “Oh, yeah. Right, between the blacksmith and the cobbler.” But you've evolved significantly since you were doing the mundane, pedestrian tasks of keeping the service up and running. What do you do these days?Dave: Yeah, that was before the observability wars [laugh] [whatever you like 00:02:55] to call it. But over time, that company was owned by SolarWinds and I wound up being responsible for all the SolarWinds cloud company SRE organizations. So, started—ran a global organization there. And they were owned by a couple of private equity firms. And I got to know one of the firms rather well, and then when I left SolarWinds, I started working with private equity firm portfolio companies, especially software investments. And what I like to say is I teach people how to get good at delivering software.Corey: So, you recently wrote a book, and I know this because I make it a point to get a copy of the book—usually by buying it, but you beat me to it by gifting me one—of every guest I have on the show who's written a book. Sometimes that means I wind up with the eclectic collections of poetry, other times, I wind up with a number of different books around the DevOps and cloud space. And one of these days, I'm going to wind up talking to someone who wound up writing an encyclopedia or something, to where I have to back the truck around. But what I wanted to ask is about your title, of all things. It's called DevOps Patterns for Private Equity. And I have to ask, what makes private equity special?Dave: I think as a cloud economist, what you also just told me, is you owe me $17.99 for the book because it was gifted.Corey: Is that how expensive books are these days? My God, I was under the impression once you put the word ‘DevOps' in the title, that meant you're above 40 bucks, just as, you know, entrance starting fees here.Dave: I think I need to talk to my local cloud economist on how to price things. Yeah, the book is about things that I've basically seen at portfolio companies over the years. The thing about, you know, why private equity, I think it would be one question, just because I've been involved in the DevOps movement since pretty much the start, when John Willis calls me a DevOps OG, which I think is a compliment. But the thing that I like about working with private equity, and more specifically, private equity portfolio companies is, like I wrote in the book, they're serious. And serious means that they're not afraid to make a big investment, they're not afraid to change things quickly, they're not afraid to reorganize, or rethink, or whatever because a lot of these private equity firms have, how they describe it as a three to five year investment thesis. So, in three to five years, they want to have some kind of an exit event, which means that they can't just sit around and talk about things and try it and see what happens—Corey: In the fullness of time, 20 years from now. Yeah, it doesn't work that well. But let's back up a little bit here because something that I have noticed over the years is that, especially when it comes to financial institutions, the general level of knowledge is not terrific. For a time, a lot of people were very angry at Goldman Sachs, for example. But okay, fair enough. What does Goldman Sachs do? And the answer was generally incoherent.And again, I am in no way, shape or form, different from people who form angry opinions without having all of the facts. I do that myself three times before breakfast. My last startup was acquired by BlackRock, and I was the one that raised our hand internally, at the 40-person company when that was announced, as everyone was sort of sitting there stunned: “What's a BlackRock?” Because I had no idea. Well, for the next nine months, I assure you, I found out what a BlackRock is. But what is private equity? Because I see a lot of them getting beaten up for destroying companies. Everyone wants to bring up the Toys-R-Us story as a for instance. But I don't get the sense that that is the full picture. Tell me more.Dave: Yes. So, I'm probably not the best spokesperson for private equity. But—Corey: Because you don't work for a private equity firm, you only work with them, that makes you a terrific spokesperson because you're not [in 00:06:53] this position of, “Well, justify what your company does here,” situation, there's something to be said for objectivity.Dave: So, you know, like I wrote in the book, there are approximately 10,000 private equity firms in the United States. They are not all going to be ethical. That is just not a thing. I choose to work with a specific segment of private equity companies, and these private equity companies want to make a good business. That's what they're going for.And you and I, having had worked at many companies in our careers, know that there's a lot of companies out there that aren't a good business. You're like, “Why are we doing this? This doesn't make any sense. This isn't a good investment. This”—there's a lot of things and what I would call the professional level private equity firms, the ones at the top—and not all of them at the top are ethical, don't get me wrong; I have a blacklist here of companies I won't work for. I will not say who those companies are.Corey: I am in the same boat. I think that anyone who works in an industry at all and doesn't have a list of companies that they would not do business with, is, on some level, either haven't thought it through, hasn't been in business long enough, or frankly, as long as you're paying them, everything you can do is a-okay. And you know, I'm not going to sit here and say that those are terrible people, but I never wanted to do that soul-searching. I always thought the only way to really figure out where you stand is to figure it out in advance before there's money on the table. Like, do you want to go do contracting for a defense company? Well no, objectively, I don't, but that's a lot harder to say when they're sitting on the table with $20 million in front of you of, “Do you want to work with a defense company?” Because you can rationalize your way into anything when the stakes are high enough. That's where I've always stood on it. But please, continue.Dave: I'd love to be in that situation to turn down $20 million [laugh].Corey: Yeah, that's a hard situation to find yourself in, right?Dave: But regardless, there's a lot of different kinds of private equity firms. Generally the firms that I work with, they all want—not generally; the ones I work with want to make better companies. I have had operating partners at these companies tell me—because this always comes up with private equity—there's no way to cut your way to a good company. So, the private equity firms that I work with invest in these companies. Do they sell off unprofitable things? Of course they do. Do they try to streamline some things sometimes so that the company is only focused on X or Y, and then they tuck other companies into it—that's called a buy and build strategy or a platform strategy—yes. But the purpose of that is to make a better company.The thing that I see a lot of people in our industry—meaning, like, us tech kind of folks—get confused about is what the difference is between venture capital and private equity. And private equity, in general, is the thing that is the kind of financing that follows on after venture capital. So, in venture capital, you are trying to find product-market fit. The venture capitalists are putting all their bets down like they're in Vegas at re:Invent, and trying to figure out which bet is going to pay off, but they have no expectation that all of the bets are going to pay off. With private equity, the companies have product-market fit, they're profitable. If they're not profitable, they have a very clear line to profitability.And so, what these private equity firms are trying to do, no matter what the size of the company is, whether it's a 50-person company or a 5000-person company, they're trying to get these companies up to another level so that they're more profitable and more valuable, so that either a larger fish will gobble them up or they'll go out on the public markets, like onto the stock market, those kinds of things, but they're trying to make a company that's more valuable. And so, not everything looks so good [laugh] when you're looking at it from the outside, not understanding what these people are trying to do. That's not to say they're not complete jerks who are in private equity because there are.Corey: Because some parts are missing. Kidding. Kidding. Kidding.Dave: [laugh].Corey: It's a nuanced area, and it's complicated, just from the perspective of… finance is deceptively complicated. It looks simple, on some level, because on some level, you can always participate in finance. I have $10. I want to buy a thing that costs $7. How does that work? But it gets geometrically more complex the further you go. Financial engineering is very much a thing.And it is not at all obvious how those things interplay with different dynamics. One of the private equity outcomes, as you alluded to a few minutes ago, is the idea that they need to be able to rapidly effect change. It becomes a fast turnaround situation, and then have an exit event of some kind. So, the DevOps patterns that you write about are aligned with an idea of being effective, presumably, rather than, well, here's how you slowly introduce a sweeping cultural mindset shift across the organization. Like, that's great, but some of us don't have that kind of runway for what we're trying to achieve to be able to pull that off. So, I'm assuming that a lot of the patterns you talk about are emphasizing rapid results.Dave: Well, I think the best way to describe this, right, is what we've talked about is they want to make a better company. And for those of us who have worked in the DevOps movement for all these years, what's one great way of making a better company? Adopting DevOps principles, right? And so, for me, one of the things I love about my job is I get to go in and make engineers' lives better. No more working on weekends, no more we're only going to do deployments at 11 o'clock at night, no more we're going to batch things up and ship them three or four times a year, which all of us who've done DevOps stuff for years know, like, fastest way to have a catastrophe is batch up as many things as possible and release them all at once.So like, for me, I'm going in making engineers' lives better. When their lives are better, they produce better results because they're not stressed out, they're not burned out, they get to spend time with their families, all those kinds of things. When they start producing better results, the executives are happier. The executives can go to the investors and show all the great results they're getting, so the investors are happier. So, for me, I always say, like, I'm super lucky because I have a job that's win, win, win.And like, I'm helping them to make a better company, I'm helping them to ship faster, I'm helping them do things in the cloud, I'm helping them get more reliability, which helps them retain customers, all these things. Because we know from the—you know, remember the 2019 State of DevOps Report: highest performers are twice as likely to meet or exceed their organization's performance goals, and those can be customer retention, revenue, whatever those goals are. And so, I get to go in and help make a better company because I'm making people's lives better and, kind of, everybody wins. And so, for me, it's super rewarding.Corey: That's a good way of framing it. I have to ask, since the goal for private equity, as you said, is to create better companies, to effectively fix a bunch of things that, for better or worse, had not been working optimally. Let me ask the big, dumb, naive question here. Isn't that ostensibly the goal of every company? Now, everyone says it's their goal, but whether that is their goal or not, I think, is a somewhat separate question.Dave: Yeah. I—that should be the goal of every company, I agree. There are people who read my book and said, “Hey, this stuff applies far beyond private equity.” And I say, “Yeah, it absolutely does.” But there are constraints—[gold rat 00:15:10]—within private equity, about the timing, about the funding, about whatever, to get the thing to another level. And that's an interesting thing that I've seen is I've seen private equity companies take a company up to another level, have some kind of exit event, and then buy that company again years later. Which, like, what? Like, how could that be?Corey: I've seen that myself. It feels, on some level, like that company goes public, and then goes private, then goes public, then goes private to the same PE firm, and it's like, are you really a PE company or are you just secretly a giant cat, perpetually on the wrong side of a door somewhere?Dave: But that's because they will take it to a level, the company does things, things happen out in the market, and then they see another opportunity to grow them again. Where in a regular company—in theory—you're going to want to just get better all the time, forever. This is the Toyota thesis about continual improvement.Corey: I am curious as far as what you are seeing changing in the market with the current macroeconomic conditions, which is a polite way to say the industry going wonky after ten years of being relatively up and to the right.Dave: Yeah, well, I guess the fun thing is, we have interest rates, we had a pandemic, we had [laugh], like, all this exciting stuff. There's, you know, massive layoffs, [unintelligible 00:16:34] and then all this, kind of like, super churn-y things. I think the fun thing for me is, I went to a private equity conference in San Francisco, I don't know, a month ago or something like that, and they had all these panelists on stage pontificating about this and that and the other thing, and one of the women said something that I thought was really great, especially for someone like me. She said, “The next five to ten years in private equity are going to be about growth and operational efficiency.” And I was like, “That's DevOps. That's awesome.” [laugh].That really works well for me because, like, we want to have people twice as likely to meet or exceed their organization's performance goals. That's growth. And we want operational efficiency, right? Like, stop manually copying files around, start putting stuff in containers, do all these things that enable us to go fast speed and also do that with high quality. So, if the next five to ten years are going to be about growth and operational efficiency, I think it's a great opportunity for people to take in a lot of these DevOps principles.And so, the being on the Screaming in the Cloud podcast, like, I think cloud is a huge part of that. I think that's a big way to get growth and operational efficiency. Like, how better to be able to scale? How better to be able to Deming's PDSA cycle, right—Plan, Do, Study, Act—how better to run all these experiments to find out, like, how to get better, how to be more efficient, how to meet our customers' demands. I think that's a huge part of it.Corey: That is, I think, a very common sentiment as far as how folks are looking at things from a bigger picture these days. I want to go back as well to something you said earlier that I was joking around at the start of the episode about, “Wow, what an amazing name for the company. How did you come up with it?” And you mentioned that you had been asking a bunch of people for advice—or rather, you mentioned you had gotten advice from people. I want to clarify, you were in fact asking. I wasn't basically the human form of Clippy popping up, “It looks like you're starting a business. Let me give you unsolicited advice on what you should be doing.”What you've done, I think, is a terrific example of the do what I say not what I do type of problem, where you have focused on your positioning on a specific segment of the market: private equity firms and their portfolio companies. If I had been a little bit smarter, I would have done something similar in my own business. I would fix AWS bills for insurance companies in the Pacific Northwest or something like that, where people can hear the type of company they are reflected in the name of what it is that you do. I was just fortunate enough or foolish enough to be noisy enough in order to talk about what I do in a way that I was able to overcome that. But targeting the way that you have, I think is just so spot on. And it's clearly working out for you.Dave: I think a Corey Quinn Clippy would be very distracting in [laugh] my Microsoft Word, first of all [laugh]. Second of all—Corey: They're calling it Copilot now.Dave: [laugh]—there's this guy Corey and his partner Mike who turned me on to this guy, Jonathan Stark, who has his theory about your business. He calls it, like, elucidating, like, a Rolodex moment. So, if somebody's talking about X or Y, and they say, “Oh, yeah. You want to talk to Corey about that.” Or, “You want to talk to Mike about that.”And so, for me, working with private equity portfolio companies, that's a Rolodex moment. When people are like, “I'm at a portfolio company. We just got bought. They're coming in, and they want to understand what our spend is on the cloud, and this and that. Like, I don't know what I'm supposed to do here.” A lot of times people think of me because I tend to work on those kinds of problems. And so, it doesn't mean I can't work on other things, and I definitely do work on other things, I've definitely worked with companies that are not owned by private equity, but for me, that's really a place that I enjoy working, and thankfully, I get Rolodex moments from those things.Corey: That's the real value that I've found. The line I've heard is always it's not just someone at a party popping up and saying, “Oh, yeah, I have that problem.” But, “Oh, my God, you need to talk to this person I know who has that problem.” It's the introduction moment. In my case at least, it became very hard for me to find people self-identifying as having large AWS bills, just because, yeah, individual learners or small startup founders, for example, might talk about it here and there, but large companies do not tend to complain about that in Twitter because that tends to, you know, get them removed from their roles when they start going down that path. Do you find that it is easier for you to target what you do to people because it's easier to identify them in public? Because I assure you, someone with a big AWS bill is hard to spot out of a crowd.Dave: Well, I think you need to meet people where they are, I think is probably the best way of saying that. So, if you are—and this isn't something I need to explain to you, obviously, so this is more for your listeners, but like, if you're going to talk about, “Hey, I'm looking for companies with large AWS bills,” [pthhh] like that's, maybe kind of whatever. But if you say, “Hey, I want to improve your margins and your operational efficiencies,” all of a sudden, you're starting to speak their language, right? And that language is where people start to understand that, “Hey, Corey's talking about me.”Corey: A large part of how I talk about this was shaped by some of the early conversations I had. The way that I think about this stuff and the way that I talk is not necessarily what terms my customers use. Something that I found that absolutely changed my approach was having an investigative journalist—or a former investigative journalist, in this case—interview people I'd worked with to get case studies and testimonials from them. But what she would also do was get the exact phrasing that they use to describe the value that I did, and how they talked about what we'd done. Because that became something that was oh, you're effectively writing the rough draft of my marketing copy when you do that. Speaking in the language of your customer is so important, and I meet a lot of early-stage startups that haven't quite unlocked that bit of insight yet.Dave: And I think looking at that from a slightly different perspective is also super important. So, not only speaking the language of your customer, but let's say you're not a consultant like me or you. Let's say you work inside of a company. You need to learn to speak the language of business, right? And this is, like, something I wrote about in the beginning of the book about the guy in San Francisco who got locked up for not giving away the Cisco passwords, and Gavin Newsom had to go to his jail cell and all this other crazy stuff that happened is, technologists often think that the reason that they go to work is to play with technology. The reason we go to work is to enable the business.And—so shameless plug here I—wrote a paper that came out, like, two months ago with IT Revolution—so the people who do The Phoenix Project, and Accelerate, and The DevOps Handbook, and all that other stuff, I wrote this paper with, like, Courtney Kissler, and Paul Gaffney, and Scott Nasello, and a whole bunch of amazing technologists, but it's about speaking the language of business. And as technologists, if we want to really contribute and feel like the work that we're doing is contributing and valuable, you need to start understanding how those other people are talking. So, you and I were just talking about, like, operational efficiencies, and margins, and whatever. What is all that stuff? And figuring that out and being able to have that conversation with your CEO or whoever, those are the things that get people to understand exactly what you're trying to do, and what you're doing, and why this thing is so important.I talk to so many engineers that are like, “Ah, I talked to management and they just don't understand, and [da-dah].” Yeah, they don't understand because you're speaking technology language. They don't want to hear about, like, CNCF compliant this, that, and the—that doesn't mean anything to them. You need to understand in their lang—talk to them and their language and say like, “Hey, this is why this is good for the business.” And I think that's a really important thing for people to start to learn.Corey: So, a question that I have, given that you have been doing this stuff, I think, longer than I have, back when cloud wasn't really a thing, and then it was a thing, but it seemed really irresponsible to do. And then it went through several more iterations to the point where now it's everywhere. What's your philosophy of cloud?Dave: So, I'll go back to something that just came out, the 2023 State of DevOps Report just came out. I follow those things pretty closely. One of the things they talked about in the paper is one of the key differentiators to get your business to have what they call high organizational performance—again, this [laugh] is going back to business talk again—is what they call infrastructure flexibility. And I just don't think you can get infrastructure flexibility if you're not in the cloud. Can you do it? Absolutely.You know, back over a decade ago, I built out a bunch of stuff in a data center on what I called cloud principles. We could shoot things in the head, get new ones back, we did all kinds of things, we identified SKUs of, like, what kind of classes of machines we had. All that looks like a lot of stuff that you would just do in AWS, right? Like, I know, my C instances are compute. I know my M instances are memory. Like, they're all just SKUs, right?Corey: Yeah, that changed a little bit now to the point where they have so many different instance families that some of their names look like dumps of their firmware.Dave: [laugh]. That is probably true. But like, this idea that, like, I want to have this infrastructure flexibility isn't just my idea that it's going to turn out well. Like, the State of DevOps Report kind of proves it. And so, for me, like, I go back to some of the principles of the DevOps movement, and like, if you look at the DORA metrics, let's say you've got deployment frequency and lead time for changes. That's speed: how fast can I do something? And you've got time-to-recover, and you've got change failure rate. That's quality: how much can I ship without having problems, and how fast can I recover when I do?And I think this is one of the things I teach to a lot of my clients about moving into the cloud. If you want to be successful, you have to deliver with speed and quality. Speed: Infrastructure as Code, full stop. If I want to be able to go fast, I need to be able to destroy an environment, bring a new environment up, I need to be able to do that in minutes. That's speed.And then the second requirement, and the only other requirement, is build monitoring in from the start. Everything gets monitored. And that's quality. Like, if I monitor stuff, I know when I've deployed something that's spiking CPU. If that's monitored, I know that this thing is costing me a hell of a lot more than other things. I know all this stuff. And I can do capacity planning, I can do whatever the heck I want. But those are the two fundamental things: Infrastructure as Code and monitoring.And yes, like you said, I worked at a monitoring or observability company, so perhaps I'm slightly biased, but what I've seen is, like, companies that adopt those two principles, and everything else comes from that—so all my Kubernetes stuff and all those other things are not at odds with those principles—those are the people who actually wind up doing really well. And I think those are the people that have—State of DevOps Report—infrastructure flexibility, and that enables them to have higher organizational performance.Corey: I think you're onto something. Like, I still remember the days of having to figure out the number of people who you had in your ops team versus how many servers they could safely and reasonably run. And now that question has little, if any, meaning. If someone asked me, “Okay, so we're running right now 10,000 instances in our cloud environment. How many admins should it take us to run those?” The correct response is, “How the heck are you running those things?” Like, tell me more because the answer is probably terrifying. Because right now, if you do that correctly, it's you want to make a change to all of them or some subset of them? You change a parameter somewhere and computers do the heavy lifting.Dave: Yeah, I ran a content delivery network for cable and wireless. We had three types of machines. You know, it was like Windows Media Server and some squid-cache thing or whatever. And it didn't matter how many we had. It's all the same. Like, if I had 10,000 and I had 50,000, it's irrelevant. Like, they're all the same kind of crap. It's not that hard to manage a bunch of stuff that's all the same.If I have 10,000 servers and each one is a unique, special snowflake because I'm running in what I call a hosted configuration, I have 10,000 customers, therefore I have 10,000 servers, and each of them is completely different than the other, then that's going to be a hell of a lot harder to manage than 10,000 things that the load balancer is like [bbbrrrp bbbrrrp] [laugh] like, just lay it out. So, it's sort of a… kind of a nonsense question at this point. Like you're saying, like, it doesn't really matter how many. It's complexity. How much complexity do I have? And as we all say, in the DevOps movement, complexity isn't free. Which I'll bet is a large component of how you save companies money with The Duckbill Group.Corey: It goes even beyond that because cloud infrastructure is always less expensive than the people working on it, unless you do something terrifying. Otherwise, everything should be running an EC2 instances. Nothing higher-level built on top of it because if people's time is free, the cheapest thing you're going to get is a bunch of instances. The end. That is not really how you should be thinking about this.Dave: [laugh]. I know a lot of private equity firms that would love to find a place where time was free [laugh]. They could make a lot of money.Corey: Yeah. Pretty sure that the biggest—like, “What's your biggest competitive headwind?” You know [laugh], “Wage laws.” Like it doesn't work that way. I'm sorry, but it doesn't [laugh].I really want to thank you for taking the time to talk to me about what you're up to, how things are going over in your part of the universe. If people want to learn more, where's the best place for them to go to find you?Dave: They can go to mangoteque.com. I've got all the links to my blog, my mailing list. Definitely, if you're interested in this intersection of DevOps and private equity, sign up for the mailing list. For people who didn't get Corey's funky spelling of my last name, it is a play on the fact that it is French and I also work with technology companies. So, it's M-A-N-G-O-T-E-Q-U-E dot com.If you type that in—Mangoteque—to any search engine, obviously, you will find me. I am not difficult to find on the internet because I've been doing this for quite some time. But thank you for having me on the show. It's always great to catch up with you. I love hearing about what you're doing. I super appreciate you're asking me about the things that I'm working on, and you know, been a big help.Corey: No, it's deeply fascinating. It's neat to watch you continue to meet your market in a variety of different ways. Dave Mangot, CEO and founder of Mangoteque, which is excellently named. I'm Cloud Economist Corey Quinn, and this is Screaming in the Cloud. If you've enjoyed this podcast, please leave a five-star review on your podcast platform of choice, whereas if you've hated this episode, please leave a five-star review on your podcast platform of choice, along with an angry comment almost certainly filled with incoherent screaming because you tuned out just as soon as you heard the words ‘private equity.'Corey: If your AWS bill keeps rising and your blood pressure is doing the same, then you need The Duckbill Group. We help companies fix their AWS bill by making it smaller and less horrifying. The Duckbill Group works for you, not AWS. We tailor recommendations to your business, and we get to the point. Visit duckbillgroup.com to get started.

In today's episode of the IC-DISC show, I have a captivating discussion with Carolyn Turner from the Alabama International Trade Center. We uncover fascinating details about Alabama's economic progress and the pivotal role of the Small Business Development Center (SBDC) in boosting job growth and new businesses. Carolyn shares inspiring success stories of SBDC clients who utilized free services to export goods successfully. I also learned more about the SBDC's impactful support for small businesses through cost-free assistance. We wrap it up by exploring how SBDC teams in Texas and Colorado foster business growth.   SHOW HIGHLIGHTS Carolyn Turner, the Assistant Director of Research and Training at the Alabama International Trade Center for Imports and Exports, joins us to discuss Alabama's economic progress and the impact of the Small Business Development Center (SBDC). We discuss the remarkable growth in job creation, economic investment, and new business formations in Alabama, which can be directly linked to the efforts of the SBDC. Carolyn shares inspiring success stories of businesses that have used the SBDC's free services to successfully export goods. We delve into the valuable, cost-free services provided by the SBDC and its transformative role in Alabama's business landscape. We explore the flourishing industries in Huntsville, Alabama, including aerospace, aviation, missile defense, and genomics. Carolyn and I have a lively discussion about the economic influence of Bucky's in Alabama and the importance of taking breaks. We touch on the peculiarities of international business, such as the unnecessary pursuit of perfection, and engage in a playful debate about whether to use hot or cold water when scooping ice cream. We highlight the work being done by the SBDC teams in Texas and Colorado to support small businesses and entrepreneurs. Carolyn emphasizes the importance of making use of SBDC resources, particularly for those in Texas, and encourages checking out the San Antonio SBDC. We end on a note of importance, discussing the significance of finding joy in what you do and taking breaks to maintain passion and enthusiasm. LINKSShow Notes Be a Guest About IC-DISC Alliance About Alabama International Trade Center GUEST Carolyn TurnerAbout Carolyn TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Dave: Hi, my name is David Spray and this is the IC disc show. My guest today is Carolyn Turner from Alabama. Carolyn is the Assistant Director of Research and Training at the Alabama International Trade Center for Imports and Export. I think this might be the longest title of any guest I've ever had. So the Alabama International Trade Center for Importing and Exporting is a division of the Alabama Small Business Development Center, which in turn is funded by the Small Business Administration. I learned that every state has its own Small Business Development Center focused on increasing the economic impact of small businesses. So we talked about the different ways that the Small Business Development Center in Alabama has had an impact. Carolyn shares some amazing stats as far as job growth, economic investment, new business formations in Alabama that are directly tied to the Small Business Development Center. We also discussed some specific stories of clients of her organization who export and successful export stories and success stories that developed. And then, on a more fun note, we also talked about which Texas retail behemoth has had a bigger impact on her life in Alabama the famous Whataburger or the famous Buckeys and her answer there was pretty interesting. So even if you're not in Alabama, I would recommend that you investigate the Small Business Development Center in your state as well as the exporting arm to take advantage of their free services. This was a great episode and Carolyn has a real passion for helping small businesses and it comes through in the entire conversation. Carolyn: I hope you enjoy it as much as I did. Dave: Good morning, Carolyn. Welcome to the podcast. Carolyn: Good morning. Thanks for having me. Dave: Sure. Now. Where are you? Where are you located today? I'm in Birmingham, Alabama, In Birmingham okay, and so are you a native Alabama. Is that the correct term? Carolyn: I've spent most of my life here. Technically, I was born in California, but I grew up in Alabama. Dave: Got there as quick as you could. That's what we say in Texas. Carolyn: I know it gets a bad rep, but it's a pretty good state to live in. Dave: I know I've been to Alabama several times. We have a client there and always wonderful experiences there. So let's talk about the organization, and I'm really intrigued by this whole structure and I've learned a lot about this from you. So you're technically an employee of the University of Alabama, right? Carolyn: Yes. Dave: But this is part of a bigger structure, so could you maybe give the audience a sense of how everything fits together? So let's maybe start at the top. What's the umbrella organization for everything? Carolyn: Sure, so I'm part of America's SBDC that stands for the Small Business Development Center. We are a national organization that's funded mostly through Congress, through the Small Business Administration, and there are these in every state. So Alabama SBDC is part of that organization and in the state of Alabama it's a partnership with the University of Alabama, so this is really considered a federal state partnership. Funding comes through Congress, through the SBA. We get some matching funds through the University of Alabama and the University of Alabama manages our grant. Dave: Okay. Carolyn: Slightly differently in other states. Every state can kind of handle it differently, but in Alabama that's how it's worked for the last 40 plus years. Dave: Okay, and then within the Alabama SBDC, I guess there's kind of sub organizations, of which the Research and Economic Development Center is one of those kind of subsidiary arms, is that right? Carolyn: So the University Office of Research and Economic Development is a UA department. Within the SBDC we have four kind of divisions. We have our domestic business advisors that are just called the SBDC Small Business Development Center. We have our government contracting branch, which recently changed names to APEX. We have the Alabama International Trade Center, which I'm a part of, and then we also have a separate capital access team that is part of the SBDC. Dave: Okay. Carolyn: And within UA, we are housed within the Office of Research and Economic Development. Okay, and that's the dean that we report to. Dave: Okay, well, that's, and I believe that you're a proud graduate of the University of Alabama. Carolyn: Right Double degree graduate yes, I got my undergrad in international marketing in Spanish, with some extra studies and international studies, and then, a number of years later, once I started back with the SBDC, I got my master's degree in global business management. Dave: Okay, now would, if you'd been a graduate from, say, one of the other large Alabama universities, would that have been a problem in your current role, or are they kind of not as competitive as people are on Saturdays? Carolyn: No, In fact, because the university manages our grant, they actually manage the grants for a number of the other SBCs located throughout the state. So within Alabama, we have offices located at all of the major universities Auburn, Troy, Jacksonville State, North Alabama, UAH, Alabama State University, South Alabama, West Alabama. I think that's all of them, but many of them, even though they're located at Auburn or at UAH, they can be considered a University of Alabama employee. Dave: Okay, that must be interesting for the folks at Auburn. Carolyn: It can be. We do have some people that are UA employees but are definitely Auburn fans, and it's okay. Dave: That's wonderful. Yeah, nothing like a nice friendly rivalry, friendly, some friendlier than others. Carolyn: So the way it doesn't manage all of our centers, some universities still manage their own grants. We'll just see where it goes. Dave: Gotcha, what a great attitude. So let's talk about the SBDC then in Alabama, and that's the Small Business Development Center. Is that what the C stands for? Yes, do you? I know I'm not as familiar with Alabama, but I know like in Texas the SBDC has a really big impact on the small business community. Do you happen to have any types of stats or summary or anything of the economic development that's occurred because of the SBDC or that the SBDC has been involved in? Carolyn: Absolutely we do. We publish an economic impact report every year. So last year the metrics that we had were in 2000,. We created or helped create in Alabama over 1278 jobs. We worked with a lot. I know and for a relatively small center, I think it's a pretty big impact. We had nearly 350 new business starts last year and our capital access team helped companies get over $100 million in capital access, whether that be traditional bank loans, sba loan guarantees, startup loans, investment capital all sorts of options. Wow, we do track that over the years as well. So over the last five years combined, we've helped over 7000 job creations, about 1300 new business starts and around 550 million in capital access. Dave: Wow, that's really amazing. Carolyn: It's a really incredible thing to see the impact that we can have. A few years ago, we informally did an interview of our employees and one of the questions was what is the reason you get out of bed in the morning? Why do you do this job? And the majority decision was the reason why all of us do this is because we love making an impact in our community. Dave: Yeah, that really resonates with me because our business is really serving the same market. It's those privately held, closely held small businesses that seem to be the economic driver of our economy and I find it to be very satisfying to be able to make a difference in those organizations, because they are the bedrock of our communities. So, that's pretty cool. And how long have you been doing this? How long have you been involved with these various entities? Carolyn: I just celebrated 15 years 15 years, wow. Dave: Well, that's awesome, so obviously you must really enjoy it. Carolyn: I do. I love my job. I love the different projects that we get to work on and all the different companies. I love seeing the impact that we get to have. One of the downfalls in economic development across the industry is that you have to spend a lot of time and a lot of hours trying to work on projects before something turns to fruition. So being able to be here for the long haul and seeing the results of the work that we do is really inspiring. Dave: Yeah, I bet it is. I bet it is. So why don't we now drill down to the division that you're part of, that's the Economic Development Center. So, at kind of a high level, what are some of the ways that the center helps businesses? Carolyn: So the Alabama International Trade Center is focused on helping the small and medium-sized companies in Alabama grow through international trade. Our domestic business advisors work on what I call domestic business issues how to start a business, what kind of legal formation do you want, market research on how to grow your business, hiring and firing and tax questions, and quick books and all the basics of how to run a business. When it comes to international, we help them when they are trying to either export or import their products or services. Most of our clients tend to be manufacturers, just because it's, I guess, more common industry knowledge to export a tangible product. But many of companies have services that they can export. So we definitely work with exports of services as well. But the vast majority of our clients are manufacturers. They manufacture some kind of product that has typically been selling successfully domestically for a number of years and then they start branching internationally, and so the way that we work with companies is through a variety of different services. We have educational training sessions available on different international business topics. So about once a month we host an educational seminar on some kind of international business topic. I'm hosting one tomorrow on international documentation, partnered with UP, on the documentation requirements for exporting and importing. In the past we have done sessions on inco terms, classification, export controls, hazardous material, shipping certifications, on how to sell in Europe, general data protection regulations, you name it. We've probably hosted a seminar on that topic, okay. I have to do one-on-one training. So I will go and visit companies and provide a few hours of one-on-one training on different business topics. Sometimes it's on Zoom. I'm seeing that a lot more often and I think probably across the country. You see this, Teams are not localized anymore. They might have team members spread over the country, and so pretty often we're doing Zoom sessions with clients when they'll bring in at the same time all of their employees from various locations and we'll do a training session on the basics of exporting or the basics of importing or export compliance, those types of things, and it's really great because new to export companies obviously need this training. You know they don't know what they're doing, but what we see a lot of is even successful companies. As they grow and hire more people or they have turnover in employees, they'll bring us back in a couple years later and do refresher training, continuous education, for their employees. So that gives a lot of use. And then we also provide guidance on export trade finance. So that's really a niche market kind of separate than our general capital access team. When companies need to get access to the money that they need to manufacture their product for export. Sometimes it can be very challenging for them to get access to a line of credit through a bank, and so we'll talk to them about export working capital programs that exist, export credit insurance that they could get through the XM Bank on how they can mitigate risks of foreign receivables and what companies through all of those options, Because these programs exist to make it less risky for a small to medium size company to start thinking about exporting. And you know, maybe they're exporting $250,000 worth of equipment to Germany or India, and if that customer in Germany or India didn't pay them, that could really hurt their business. I mean, who knows they could go out of business or doesn't pay them $250,000. And so why these programs exist? To make it easier. We also do a lot of market research, so that is one of the great partnerships that we have with the University of Alabama. We provide an internship to University of Alabama students that are then able to come in and help put together these industry specific customized market research reports for our Trade Center clients. So whether that maybe they have no idea where they want to export to, and so we're starting from scratch, trying to help them figure out where overseas would be a good target market to start with, or successfully exported to 100 countries, and now they're trying to get into a new one for the first time, or they're having trouble with their existing distributor and they want contact information for other options. So standard research reports for us could take anywhere from 40 to 60 hours and we pay to have access to a lot of databases. As well as being part of the university, we get access to databases through the university, and so we'll pull all these different pieces of information and put together a customized report that companies can use to help develop their export strategy. It's great experience for the students because they get to work real world projects, not just make believe, made up ones, yeah, interaction with the companies usually and it's great information for the clients as well. I mean they would pay thousands and thousand dollars on the private market sector for this kind of research. Dave: Sure, now, and that raises the question I was curious about Is there any? Does the Trade Center generate any revenues from any of its services, or are they all just complimentary? Carolyn: It's all offered at no fee, so we do not charge for any of the services that we provide. Because our funding comes from the SBA, we are allowed to offer these services at no cost. The only thing we ask in return from our clients is that twice a year, they fill out a survey letting us know it's done a good job, because we have to gather all of that data and our metrics. You know we're one of the few organizations that is really judged on our metrics and if we don't meet our goals, if we don't work with enough companies and help them grow and succeed and increase their sales and get access to capital, then we are at risk of losing our funding. So every metric point that we report, every economic impact that we report, is actually backed up by our clients. We're not allowed to claim anything, any kind of success, without their written permission. Dave: Okay, well, that's well. That seems like a really fair trade. You do all this to help these companies and they just have to complete a survey twice a year. That seems like a fair trade. Carolyn: It's pretty good and we're not just one time. That's one of the other things people think oh, you know, I'll just talk to you one time. No, most of my clients have been working with me for years and for a new to export company. Sometimes that's how long it takes, Other times, you know, they've just grown tremendously over the last few years and it's amazing to see where they've started versus where they are now. Dave: Yeah, that's awesome and I bet you're really popular with your clients because you're providing the service at no out-of-pocket cost to them. Carolyn: For the most part. Yes, I think our clients are fairly satisfied. We use a net promoter score rating that we track with our clients. It's typically pretty high up there. Every now and then we'll get a client that you know feels like they already know everything, like they don't need any help, but for the most part they're pretty helpful for the help that they receive. Dave: Yeah, I would think so, because they're certainly getting their money's worth, right? Carolyn: So at least they should feel like it. I think so. We're constantly adding to our services as industry changes, as things modernize. So, you know, especially during the COVID pandemic, we switched a lot of efforts into online marketing, global website globalizing websites, information on how to do international shipping for direct you know, direct to consumer and e-commerce. We launched a program a few years ago on graphic design, so now we offer graphic design for free so that companies that are trying to upgrade their website so that it's more user-friendly for international users. Or we have a student right now who's creating animation videos for marketing for a couple of companies all at no cost. Dave: That's awesome. Well, I love like case studies stories. I think it really kind of pulls it all together. Do you happen to have any examples of companies you've worked with in the last few years that you could kind of use as a case study and share some of the details? Carolyn: Absolutely. We do turn in success stories to the SBA every year. That's part of our goals and metrics. I think that definitely makes us a little bit unique. We have a confidentiality agreement with all of our clients, so we're not allowed to discuss specifics of what we do with anyone else without written permission, so it's good that we get these authorized success stories from companies. Over the last few years we've had quite a variety of different companies that have that we've worked with on these. So last year we worked with a company in Huntsville Polaris Solar Systems, polaris Sensor Technologies, I think is what it was called and we helped them navigate the world of export compliance. They have a regulated, export-controlled technology and so they had to make sure that they were following all the regulations and applying for licenses. We helped them practice their pitch when they were going to be pitching to foreign customers, realizing that the benefits of their products and technologies were actually different in different parts of the world and used in a different way, and so working with them to develop their pitch and their value proposition and introducing them to potential customers overseas. Another example is totally different industry sector. There was a company in a very rural, economically disadvantaged area of the state that had created a company developing very small tractors or very high tech. But the way that they came up with this design, it was easy to build, it was small, it was more affordable for individually run farms or small co-ops. And they had this novel idea of they were either going to manufacture these tractors in northeast Alabama or they would give the design, the blueprints of the tractor, for free, at no cost, to a foreign manufacturer for them to be able to create a manufacturing plant overseas and create local jobs. It's one of the ways that they wanted to give back to the community. Oh, that's how cool is that? It was really cool. They changed names a couple of times when we worked with them. It was called Kleber Technologies and so we worked with them way back in the beginning, before they had done any exporting, and we went and visited them and provided in-house training on basics of international shipping and how to do export marketing. Through the years we did market research to help them find customers or distributors and overseas parts of the world. They eventually went and visited and sent pictures of clients in sub-Saharan Africa and Central and Latin America writing on the tractors Last year. So this is probably seven or eight years after we started with them. But last year, at this particular company, one of the Alabama's governor's exports awards oh, wow, because they successfully exported to 50 plus countries now and it's just amazing to see. So I tracked back down the student who had helped work on their market research way back in the beginning. Oh, really I actually did that article on LinkedIn. I said hey, do you remember that project from eight years ago? Look at them now. Dave: Wow, that's really cool. And that first company you mentioned you said they were in Huntsville, right? Yes, and I think a lot of folks outside of Alabama don't realize that Huntsville is like one of the rocket capitals of the US, right, space industry. How would I describe the industry? Carolyn: Yeah, I mean rocket and space were known for NASA in Huntsville. We also have Redstone Arsenal in Huntsville and FBI, I think, just relocated down there. There's SpaceX activities that are planned, so aerospace, aviation, missile defense is another big one. But then surprisingly, hudson Alpha also is located there and they have been instrumental in genetics, genomics, research, pharmacogenomics, so it definitely kind of covers the gambit. When you take a tour at Hudson Alpha it's really interesting. From one side of the building you can look out and see all the NASA and space technologies, and then inside the building is genomics and genetics and agrogenetic, and then on the other side is cornfields, because that's the real Huntsville. Dave: Wow, that is pretty cool. So this has really been kind of a fun overview for folks who are listening to this, who are in Alabama, who do international trade. What would be the best way for them to learn more? Would you just direct them to the website, or where should they kind of start? Should they just reach out to you? What's the kind of ideal process? Carolyn: Just go to our website, aitcuaedu. Registration is free. As I said, we don't charge for anything that we do, and within the state of Alabama, we're part of a bigger group called the Export Alabama Alliance, so that's a group of all of the entities in the state that work together to promote trade. So we've got the Governor's International Trade Office, the US Department of Commerce on the federal level, local chambers of commerce, sba, ports, various entities that exist to help promote exporting, and so when you get one of us, you get all of us. We work together as a team to make sure that the companies get the support that they need, no matter what they're trying to do. And then, yeah, I just strongly recommend, no matter what state you're in, google your SBD, because they have a very valuable resource. Dave: That's awesome. Well, as we're wrapping up, I have a couple of kind of more personal wild card type questions just for fun. So you mentioned you joined the organization 15 years ago, and so I'm just curious if you could like go back in time and give advice to your 15 year younger self, knowing what you know now. Like, what advice might you give to yourself with the perspective of 15 years of experience? Carolyn: That's a tough one. Dave: I know that's what makes it fun Fun for me, not so much fun for you. Carolyn: I'm a. On a personal note, I am a recovering perfectionist. Dave: Oh yeah, my wife is one of those, but not the recovery stage yet. Carolyn: That has been a hard lesson to learn. A colleague that I had taught me something and it's a quote that has stuck with me and I tell it to everyone now and it is that you are a human being, not a human doing Okay, so that'd be your advice to yourself is just taking a bit of a chill pill and absolutely. Dave: Yeah, my one of the quotes I like around that subject I also have some perfectionist tendencies is that great quote progress, not perfection. Carolyn: Yes. Dave: So, although you know there are some things I do push back a little bit, there are some things you need perfection on landing an airplane, open heart surgery, right, I mean, there's some things that you know it pretty much, perfect is the only, the only option. Carolyn: Yeah, I agree. But in the world of international business I think perfection is not needed and progress is. And you know what I tell my students all the time that are doing these market research reports? Because you know they're so open ended. You could just keep researching for ever and ever and keep on finding more pieces of information. So I focused a lot on quality over quantity. Dave: That is awesome. So by last question and this is a really fun one I think there are two famous or at least you know Texas institutions that have expanded eastward and I'm going to ask you which one you think is had made a bigger difference in your life, if any of them have. What a burger or Bucky's, oh Bucky's. I had a feeling you'd answer that one. Carolyn: Yeah, it's kind of a saving joke. I mean I think we have two Bucky's in Alabama, maybe three. Dave: According to the research I just pulled up, that as of April 10th of 2023, they'll have four stations in Alabama, but it's not quite clear how many of those are up and running right now. Carolyn: There is one not far outside of Birmingham, on the path between Birmingham and Atlanta, and it is packed no matter what time of day it is. It's like a town, it's so big. Dave: But Does it have? Is the road it's on called like Bucky's Boulevard too? That seems to be. Carolyn: I don't think so. I don't know. Maybe, but it's definitely impacted everyone's road trips. I think you can't. Dave: Yeah, I'm told that, not by without stopping at Bucky's. Yeah, I'm told that Alabama has the second most number of Bucky's outside of Texas. So things are, yeah, and it's interesting because they're always Bucky's are always the same, but like in a good way, you know, and the best one, and I've always said that off on a tangent. I've always said that it seems like Bucky's competitive business advantage are the clean restrooms. That seems to be like what they really differentiate. But when you take a big picture, look at it from a business perspective, you're thinking that shouldn't be a sustainable business differentiator. Right, because in theory that anybody could copy that, but for whatever reason, nobody else cares to. Carolyn: I don't know. I mean, I would say their main competitors would be like the pilots and the lying Jays. Sure, I remember the names of them. But as far as competition, I think that's definite competition there. I think Bucky's is the shop I mean it's, I don't know. Cracker barrel meets gas. Dave: Yeah, yes, yeah. It's hard to describe to somebody who's not been to a Bucky's. Carolyn: No, but this. Dave: And they seem to be an economic development force because everyone I've ever been to because they need so much land and they always want to be on a busy highway that they oftentimes are not near cities, they're kind of in the middle of nowhere and they're always advertising really high starting hourly wages. So I get the sense that for a lot of these areas that they come into they really bring economic opportunity for folks that live nearby. I mean, it seems like the classic example is the person working the checkout registers Oftentimes seem to be a teenager that lives there locally and I think, man, can you think of a better like part-time job to have in high school than to be making $15 or $18 an hour working at Bucky's inside the air conditioning? Yeah, just talking to folks all day, I don't know. *Carolyn: * My high school job was scooping ice cream at Baskin Robbins. Oh that's. I mean with free ice cream perks. Dave: Yeah, that one might have to trump Bucky's. I bet you're. I've always wondered are your hands and wrists and forearms just worn out at the end of the day? Oh my gosh, yes. Carolyn: And gosh, the first Baskin Robbins I worked at. They used cold water in their faucets where you put the ice cream scoop and it was At my one arm. I had like huge muscle by the end of every summer. Dave: Now did you get used to it then Like by the end of the summer, were you not as fatigued by the end of the day? Carolyn: Yeah, but then you know, other ice cream shops use hot water to store their ice cream scoops in and it makes a huge difference. Dave: Oh, I bet it does. You know why they use the cold water instead of hot? Yeah, any theory. Carolyn: Looking back, I think they were just being cheap Okay. Dave: Yeah, because I think I know at home if I'm scooping up several servings. You know, I know the old trick of the hot bowl of water to dip the scooper in to make it work better. The people. Carolyn: We used to get these, the big old jars of cherries, and they would make us go through and cut them all in half. Oh wow, they would last twice as long, oh wow. Well, Honey, you know I guess. Managing is almost as hard right. Dave: Yeah, that's the beauty of the free enterprise system. Every person tries, you know, gets to do it their way, and all of that. I mean, who knows, maybe the little bit of money they saved, maybe that translated to higher hourly earnings for the employees who knows, maybe, who knows? Carolyn, this has really been a fun conversation. Was there anything I didn't ask you that you wish I had, or anything that we should mention? Carolyn: I would just say that the world of international trade is constantly changing. Okay, so find a local resource in your area that can keep you up to date. Dave: Okay, that's awesome. Well, I appreciate that and I really appreciate your time today. I've really learned a lot more about the whole SBDC program in general and you've kind of inspired me to take a look the two states I spend the most time in are Texas and Colorado to take the initiative to start to learn more about those organizations Absolutely. Carolyn: The SBDC team in Texas is absolutely amazing. This is absolutely phenomenal. I'm not sure if I've met anyone from the SBDC Colorado team, but definitely take advantage of your in Texas. Dave: Yeah, I know in Houston. I think it's associated with the University of Houston. I think it's called the U of H SBDC. Carolyn: I know it's the San Antonio SBDC that does most of international trade work in Texas. Dave: Okay Well that's good to know. I'm going to be in San Antonio in a few weeks. I should check that out. Well, that's great. Well, that's great advice and this has really been a fun conversation and I really appreciate you taking time out of your day to share the story and obviously you have great enthusiasm and passion for what you're doing and that comes through and that's always fun to see people that really are inspired and really focused on how much they enjoy their job. Carolyn: It makes a big difference when you enjoy what you do For sure, all right. Dave: Well, have a great day, carolyn. Carolyn: You too. Special Guest: Carolyn Turner.

Video game acting is a unique art form that requires strong acting skills & an imaginative approach to storytelling. Anne is joined by special guests Dave Fennoy & Randall Ryan to discuss all things Game VO. Voice actors must bring their characters to life in a way that's authentic & impactful for players. Believe it or not, the average age for video game players is 40 years old, and these people have been playing games for 15+ years. These players are seeking a high level of story sophistication & depth of character when playing games. For a voice actor, Game VO recording is often a solitary and non-linear process due to logistics, but it still requires a deep understanding of the character you're playing, the world they inhabit, and their relationship to other characters. Invent as you go. Know your character, the world, and how your character would react in the moment. As with any genre, it's best not to overthink things too much before recording, but instead trust yourself as an actor and allow yourself to get creative during the session itself. And if you want to work with the pros, stay tuned for a unique opportunity to relax, recharge, and level up your game VO skills with Dave & Randall…   Transcript    It's time to take your business to the next level, the BOSS level! These are the premiere Business Owner Strategies and Successes being utilized by the industry's top talent today. Rock your business like a BOSS, a VO BOSS! Now let's welcome your host, Anne Ganguzza.   Anne: Hey everyone. Welcome to the VO BOSS podcast. I'm your host, Anne Ganguzza, and today I am pumped to level up my BOSS knowledge about Game VO, and I am so excited and honored to have the best in the industry, Dave Fennoy and Randall Ryan. Dave is a renowned voice actor and instructor based in LA with a vast portfolio of work in commercials, narration, TV promo, animation, and of course video games. He's best known for his character, Lee Everett in the Walking Dead Game, and has voiced characters for more than 500 games on some of the industry's biggest titles. And IMDB has named him one of the 20 best male game voices of all time.   Randall Ryan began his career as a musician in touring rock bands, and today is an award-winning composer and producer of gaming and commercial music scores. He co-founded Hamster Ball Studios back in 1995, where he's been directing talent and producing game audio for more than 20 years and has since contributed to numerous high profile video game titles. Also, co-host of Let's Talk Voiceover podcast and still performs the occasional live gig and thinks dogs make the best people. And I of course, think cats, but maybe that's for another podcast discussion, Randall, I'm not sure.   Randall: Who's your animal spirit podcast?   Anne: There you go. Guys, thank you so much for joining me. I am so excited to talk to you today,   Dave: Oh, it's our pleasure. Happy to be here.   Randall: Absolutely.   Anne: So what I love, BOSSes, is that I have both sides of the glass here today so that we can get a really comprehensive view of game VO as it exists today. So I'd like to start off with Randall and ask you as a casting director, can you give the BOSSes an idea of the game VO market as it stands today, let's say, compared to 20 years ago when you first started?   Randall: Well, yeah, that's almost an unfair comparison. I think what I would say is 20 years ago, games were just kind of coming into their own as even an art form. And now as I think a lot of people know, it is the gorilla of the industry. I mean, last year games sold more than film and music combined.   Anne: Wow.   Randall: Which is just amazing. And the other thing that I see that's very different from 20 years ago is 20 years ago, it was certainly the wild west when it came to voice acting. It was often like the person of the cubicle next to the developer, and they were just throwing some voices in. And if they hired actors, there was not a lot of, I don't know if I would use the word respect. It just wasn't really truly a real part of -- VO was an afterthought. And I think the difference is, is now is not only has gaming VO reached a really high place as art form, but the thing that I really see and, and it's the reason that I think you don't pay attention to game voice as your own peril if you're a voice actor, is it is changing every other genre.   Commercials are different because of gaming acting, and even for the people that don't know it that are writing copy, they've been growing up with games. They've been playing games, and they, and they also see other commercials that have been going to more gaming acting principles. And so even if they don't know that, that's where that creative is driving from -- bottom line is that is where that creative is driving from. So even if you're not going to be in games, I think it's really important as an actor to understand what it takes to be a VO game actor. It's kind of like, even if you're gonna be on film, you really need to understand theater. You need to understand all the principles of it. It's very much the same kind of thing. You may not wanna be a Broadway actor, but you don't study theater kind of at your own peril. I think it's kind of the same idea.   Anne: Well, probably if I had to count the amount of times you said acting --   Randall: Yeah. Well   Anne: Right, in that response? So acting is so very important. Not just I think to game view, but just to voiceover in general, especially now. And I'd like to ask you, Dave, let's talk a little bit about acting and your thoughts on why it's so important that voice talent today really have that acting prowess. Dave: You know, when we talk in the general world of voiceover, acting is important, but it's more important when you are looking at video games. We become a good actor in voiceover to be able to be ourselves or a character similar to ourselves for commercials and narration, or even TV promos. But we're looking for something wider range, a much wider range of who these characters are and with a different purpose. If you're doing TV promos or commercials, your job is to get people to buy a product, watch a TV show.   As an actor in a video game, your character drives the story forward. Whoever your character is, whatever it is they are doing, they are part of a story, not part of trying to sell you something or get you to do a particular act. And what the audience for video games is now, one, they're averaging about 40 years old, and they've been playing video games for 15 to 20 years. And they want an adult experience, and they don't mean adult like chicka chicka wow wow.   Dave: But they're looking for cinematic performances, which means more subtle, more real. Your performance has to fit into the world that these games are in. It's not about your voice, no matter what your voice sounds like. It's about can you let this character inhabit you and bring this character to life with just words on a page and a microphone? And there are various techniques that really are founded in acting principles that'll help you get there.   Randall: And, Anne, I'm gonna add one thing to what you said too. You are right that your primary job in a commercial is to, I guess you could say, is to sell a product. But really in essence, even as an actor, is that really your job? Your job is still to inhabit that scripts, and, and this is where I think some of the changes are coming from. And so in the same way that there are certain people who are spokespeople that the whole celebrity thing has happened, but a lot of times you're putting the celebrity in because people like them. They aren't really selling --   Dave: Because people like them and believe them.   Randall: And believe them. Absolutely. And so people are putting him in there not to actually sell. You know, did Matthew McConaughey sell Lincoln? He didn't. He drove around and said some talking. But he's playing in essence, even though it's him, he's playing this character. And I think even in commercial, to understand what that character is supposed to be that the writing is, you still have to be that character more now than you ever did before.   Dave: Which brings us back to your point, Randall, that learning to be a good video game actor or good actor will help you across the board in voiceover.   Anne: Yeah. I'm just gonna say, with my experience working with students for not just commercial, but a lot of the long format narration, like corporate narration and explainers and, and medical, I mean, even then there is a role. It may not be as dynamic or as long played out as, let's say, a video game, but there is still that acting that has to come into play. And I'm gonna talk about how important I think it is, especially now with the advancements in technology. But I wanted to ask you about the story. Okay, so the story for a video game is a lot different than, let's say, a story that's laid out in front of you.   So like a story, if you're assuming that you're gonna be in a commercial, you're gonna be selling a product, there's a character backstory you can develop. Like you want it to end up that the person agrees with you and says, yes, this is a great product for me. If it's corporate narration, it's kind of a nicely wrapped up little story about a corporate story about their brand. But with video games, it's ever changing, and it's not necessarily all laid out in front of you. And I was gonna also do the example of an audiobook where you've got the entire book and the story's laid out in front of you. But yet with a video game, do you know the entire story right away? Or is it something that develops?   Dave: Chances are you will never ever see the entire script. The video game industry is very secretive. We have all in the video game industry signed hundreds of NDAs, non-disclosure agreements, because they're very secretive. They don't want anybody to know or share what's going on in their game. So even when you audition, sometimes you have to sign an NDA before you can even do the audition or send it in with your audition. And you're gonna get a few lines of whoever this character is, maybe a little bit about the game itself, but never "this is what the entire storyline is and this is what happens." You will never see that script. If you're an actor in a movie, in a play, in a television show, you'll see the whole script. You'll know your character's arc. Being a character in a video game is much more like being who you are. You have certain tendencies, a world, a belief system. But when you walk out the door every day, you don't know what's gonna happen to you.   Anne: That's a very different skillset, I would think. Because each and every time you are getting that script or that little tiny portion of it, you're either developing the scene, the backstory, and the emotion. And so that's like constant, like I would think acting requirement for that just is through the roof .   Dave: Well, you developed the character in that audition. But when you get there, say you did five, maybe ten lines, now you've got 100, maybe 500 lines. And some of them may be paragraphs or monologues. And it's a matter of being in character and going with what is this character thinking, feeling, doing, being, who are they talking to in this particular moment in time?   Randall: Yep. God, there's so many things that that just brings to mind, but, well, what is Mark Dale's quote, a mutual friend of ours, he's a director in London. Yeah.   Dave: This is the exhaust of the acting engine.   Randall: That's one. And then he is got that little spy thing, which I think when you're talking about how do you deal with a video game character, that to me is like, yes, that's actually it.   Dave: One of the things Mark likes to talk about is the spy who is in another city, another country, another place using a different name, dressing different, pretending to be this other person. And his life or her life depends on how well they roll with the punches, roll with a different situation, somebody else asking them particular questions, and it's constant improvising in character.   Randall: Yes.   Anne: I love that. That's such a different way to look at that. Okay, so when you're talking about how to, I guess, evolve that character is sometimes the story -- well, I imagine you would know this -- developed as you also developed the character and then the story might change?   Dave: Well, you know, it's interesting. Uh, during the Walking Dead game, sometimes I would arrive at the studio, and the script got there 20 minutes before me. So yes, actually sometimes the writing is right there with you. So sometimes they wouldn't have been able to tell you anyway because certain things hadn't been written yet. Especially in something that's ongoing, episodic like that, but whether they know it or not, you as an actor are not going to see the entire script. You are gonna live this character moment by moment. So you are living in the world of, what am I reacting to? What am I thinking? What am I feeling? What am I doing? Who am I talking to? And what's that relationship? Which we do as actors anyway, but now it's moment by moment.   Anne: Now Randall. So then in terms of directing a talent, right? What is that like for you? Because you also probably don't get the script right away either, and so you're directing and so what's that process like?   Randall: Well, I usually get it a little bit sooner than the actors, but you're right. It's not like I've been sitting there with it for months or weeks or anything like that. So everybody has got a different philosophy. I guess I'll tell you mine, but I think most directors I talk to will probably tell you something very similar to this. I think this is true of other genres, but video games, it almost has to be true. You cannot go in with this voice in your head or character in your head. Like, this person is going to be like this. It has to be a collaborative process, because you haven't, as a director, haven't had time to absorb all the stuff. But even if you did, even those occasions where you do, writers write, and there has to be a translation, and that actor is coming in with sometimes, you know, you're looking at Dave says 500, sometimes you're looking at maybe 500 lines for that character. You're looking at thousands of lines of script, and we're not gonna put people together, ensemble. And there are a lot of reasons for that. I, you know, I know that's a sticking point for a lot of people, but there are a lot of reasons that's probably not gonna happen anytime soon.   Long and the short of it is I have to trust the actor. So the actor and I both have to be working together to come up with this character. They come in with an idea, I come in with an idea, the writer comes with an idea. At some level check your ego at the door. We're gonna work this out as we go. And that's a lovely process when it works well because once it starts clicking, everybody's discovering, and that's where you get this magical performance that you couldn't have scripted it like that. But that also really derives more than anything else from actors who are comfortable with this, who aren't thrown by change, who are able to invent as they go.   And I think so much of that invention is that understanding what Dave said, where are you? What happened before you got here? What are you reacting to? How do you feel the other person? These are acting principles, but I think they're also just mindset principles that you have to get into as you're observing humanity and everything else. And some people do that extraordinarily well.   Dave: You know, one of the things I find working with students is generally they don't realize how much time and effort they need to spend in discovering everything about this character and everything about a particular scene that they're gonna do. I like to tell people, well, look, we've got words on a page or screen and a microphone, and we have to stay on mic and we have to read the words. An actor on stage, an actor on set has memorized their script. They are in costume. They have another actor that they're bouncing energy off of. There is blocking, they're gonna move from this place to this place. They know what the action is that they're going to do and they can do it. Once again, we're reading words on a page in front of a microphone.   But we have to bring the same level of acting to those words that are on a page through that microphone. And the only way to do that is to put yourself in the place of that actor, say on set, on scene.what am I wearing? You know, what does it look like around me? Am I sitting, am I standing? Am I walking? This person I'm talking to, what's my relationship with this person? Where are they in relationship to me? Or where are they when there's more of them in relationship to me? What just happened, I mean, in the last couple of seconds, that I'm saying or doing what I'm doing, what I'm thinking, what I'm feeling? It's that type of preparation and using your imagination that brings you to believable performances.   Anne: So Dave, when you're creating your character, before you're going into record -- and that might evolve, right, as you do that -- what sort of steps are you taking to envelop that character in a believable way for the script that you have?   Dave: Well, just the things I was talking about, you wanna take in the whole script. Too many people I think wanna start, oh, what are my lines? Oh, is my line, my line. Bullshit. Bullshit. My line, my line.   Dave: And we wanna start with the big picture. If there is a description of what the game is, take that in. Video games are very much like movies. As a matter of fact, they're like 70-hour movies. And whatever genre you can think of, including romcom, for a movie, there is an analogous one in video game. So where does this game live? What kind of world does it live in? Then who is your character? And as much information as they give you, take that all in. Now I realize sometimes it's three paragraphs of information about your character and then five lines. You can't fit everything about that character into those lines. But you can find how this character would react in this situation. What is their worldview? Create that. One of the things I suggest to people from time to time is before you read the lines, read the character description, and then ad lib the character, talking about himself based on those descriptions. He was born here, his parents died, he was kidnapped, he was made a slave, he met a wizard. Tell your story, but without reading it; just off the cuff, improvise it based on the few things that are said there before you get into the script. And once you're in the script, you gotta pay attention to all the alternate lines besides your own and the stage direction. I'm amazed how often actors will -- they'll get their lines, but the alternate lines and stage directions they ignore. All of those are clues that you've, you've gotta take in.   Anne: Yeah. I say actually to my students that even for like something that may seem dry or boring like a corporate narration, the words are there for a reason. Somebody was paid to write those words, and every word has to have a meaning. And I think that there's so many people that just rush in to their studios, and like you were saying, just line by line, and they don't take in the whole story or try to imagine the story, that moment before. There's a moment before even I think in every piece of voiceover copy, there's a moment before. And I think if you can take the time, right, to develop that story, it will help. Let's talk a little bit about -- because I know you've got something happening, Dave, at Voiceover Atlanta, an efforts class, I think, or an X-session.   Dave: Yeah.   Anne: Let's talk about maybe not necessarily efforts, but body and how important your body is to be able to, I guess, express better acting.   Dave: Your body informs your voice. Once again, it doesn't start here. It starts with all of this. It starts with the look on your face. It starts with your honest reaction, your honest thinking, and those thoughts, those feelings will trigger a physicality that makes what you're saying come out in a certain way. Randall had mentioned something, we are translating the written word into the spoken word. They are not the same thing. I actually go so far as to tell myself, look, I'm not that into the words. They're not the most important thing. If you're crying or screaming, and there's a dialogue that's going on through it, and I can't quite understand what you're saying, for me, that's okay. Because what I really wanna understand is what this character's going through in this particular time. Now, if it's something very vital that has to be said, that leads to something else, yeah, we'll want to hear.   But voiceover 101, you wanna sound like you're smiling. What do you do? Put a smile on your face. You wanna sound like you're a little more important? Stand up just a little bit straighter and suddenly there it is. You wanna seem like you're a little bit more tired or something? Let your body relax, and there it is. How a character with a limp, or with a hunchback, or with a injury to their face, how they're gonna express themselves, or they're of a certain age and, and the voice has gotten tired from smoking and drinking alcohol -- these are what we're trying to find.   A lot of people will say, well, I'm putting on this voice, but why? There's nothing wrong with creating a voice, but why? How does this voice serve the character? What is it about this character that that voice is there? So your physicality, if you're somebody, maybe your head's off a little side from an old injury, or maybe you're that guy that's really tough and you're always got your chest out and ready for action. That's what changes your voice. Not something that you're putting on, but something that you allow to happen based on so many other things: your thought, your feeling, your action, your relationship and who you are, what your natural physicality or the natural physicality of that character is.   Randall: When you're talking about the body and you're talking about the voice -- I'll pull all three of these together, what I think at least is kind of simply -- you are acting in your emotions have nothing to do with your character voice. That voice that you put on is a filter. And where people get confused -- because historically this would happen. That voice that you're doing is somehow your character, and then that becomes caricature. That's not true. That voice is a filter. And when you talk about body parts, all the things that Dave just talked about, you could be the age you're at, and if you've got a hip injury, or you've got a limp, or you've got a lung issue, it's gonna sound a certain way.   So all you're doing after that with that voice is, it's a filter. If it's a guitar, it's, you're just turning the overdrive up a little bit on the distortion. But what you play is still gonna be what you play. It might make you play a little bit differently,'cause you got a little more sustain if we're gonna use the guitar thing. But ultimately you're gonna play what you play. And that's, I think the mental process it has to be. You are acting that emotion, you are acting that injury, you're acting that malady, you're acting that physical trait that you have. And then if it calls for it, change your voice placement, change your register, change your nasality, you know, all of that stuff.   Anne: Now Randall, you mentioned something earlier that I wanted to ask you, about when you're recording the characters, they're not typically done in ensemble format, right?   Randall: Right.   Anne: And typically the talent is recording from their studio or in a studio with you. Right?   Randall: Yeah.   Anne: Why is that? Why is there not -- because I would think if you're bouncing off other characters it might --   Randall: Yes, there would be. And sometimes you get that opportunity, but there are two reasons really. One, you have non-linear stories. In a movie and a TV and something of that nature, you have a beginning and an end. So it actually becomes very easy to say, well, we'll put these actors together -- we'll say a movie more than a tv. 'cause I think for TV set, you know, everybody shows up the same time. But we know we're gonna need you on these days 'cause you get at all your scenes that these people and they're gonna need you on these other days. When you have 50 characters that are all speaking. And when you have interactions with any and all of them, the time to actually do that, the logistic issue to do that is almost impossible. And that's one of your absolute biggest reasons right there. When it really comes down to logistics, if I'm going to have Dave come in and do 500 lines, do 1000 lines, and in those lines he's got soliloquy lines, he's got 20 that are interacting with this one person, you just can't really pull that together in the same way. And the other thing in a movie that's different than, than a video game is there's all this back end -- of course movies are more than just about filming, about having the actors there. But that is so much of a focus, where in the game there's all this other stuff you have to construct. You know, think about a movie. If you actually had to construct the world in which you live, now make it non-linear, now make it so that there're branching storylines, or that if you go this way this happens, it actually becomes logistically almost impossible to do.   Anne: That makes a lot of sense. Now, in terms of, let's say the flow of what you do as a director, once you cast something, is it mostly just when the actors available they record their lines? I mean there's gotta be so many things, I would think that the story's gotta be there, right? The game writers have to have the story written. and then you have to get all of the characters to record their lines. And then -- so tell me a little bit about that process.   Randall: Well, that's a big thing. I'll try to make it kind of short. So one of the things you really have to do is at some point you gotta lock the script down. And trust me, that can sometimes be an issue. But you just do, you have to lock the script down, and you have to get everything that you're going to get. Of course there has to be some when the actor's available, if I, if an actor not available for a week 'cause they're on set doing something else, of course you can't use 'emthen. But really that becomes the puzzle piece that comes on this end of scheduling everybody. Dave, I've got this time on Monday and Tuesday. I don't have anything till Thursday. Do any of those fit with you? Bam. You lock it down, you, you do that.   The other thing that is also different about games that -- I mean as budgets go up, maybe this will change, but at least for now, again, some of it is logistics and some of it is budget -- I cast Dave to do a role. By the way, when Dave shows up, sometimes he knows ahead of time, but a lot of times it's like, hey, there're probably gonna be a couple more, just letting you know. And he shows up and because you've got soldier numbers 1 through 10 and townsperson number 1 through 20, it's like, Dave, can you pick up a townsperson? Can you pick up a soldier? By the way, they can't sound like the character that you're actually in here to do. You know? So that's another thing that happens all the time.   Anne: Yeah. And I always like for talent to understand what happens like outside of their little bubble of just voicing something. And so that's why I think it's wonderful to have the two of you there, 'cause it can kind of see how you really have to work together in order to produce and do something successfully together. So it's good to know like what you have to do as a producer or director. And of course the talent has to really, I think, be able to perform pretty much on demand, is what I'm thinking. That's what it's sounding like to me.   Dave: Exactly pretty much on demand. . And it's interesting from my perspective, whether I'm in my home studio or I go into another studio, there will be a producer there, the writer might be there, the director might be there. And I, I think the director's job is, the director's the person who knows how to communicate with actors. The writer may be able to tell you, well this is what's going on and so forth. But they have a tendency to keep talking too much, and they're more invested than they need to be to get the performance you want, whereas the director is your guide. When you are at home doing your audition, you are your own director. You have to make choices. But when you arrive on your gig or the gig arrives at your house, and you're on camera there, now you have somebody to take some of that weight off. And maybe they've listened to your audition and said, well you know, you made a good acting here, but that was the wrong choice. What actually is happening is this, and our job as actors is to be able to create the thought, feeling, attitude, movement of a character, and if it's something different, it's up to us to just make it different.   Anne: I love that you said that cause there's so many people I know that seem to be afraid of making that decision whether it's right or wrong and committing to the acting, because they don't necessarily know what's happening and so therefore they just play it safe.   Dave: And beyond playing it safe, they don't really know. They haven't made a definite decision. And the person who is listening to that audition come in, it doesn't say anything to them. You're probably going to do better making wrong strong choices than no choices.   Randall: Absolutely. Or safe choices. Absolutely.   Anne: I love that. I love that. I got so excited that you said, 'cause I was just like totally connecting with that. Let's talk a little bit about talent that might wanna get into video game voiceover and maybe the demo, which I think is probably an important part of helping them maybe get their foot in the door. Let's talk about what's important in a game demo.   Dave: It's interesting. We were talking about this with each other just the other day. I always liken video game acting --I always tell my students, look, I want you to think of yourself as a character actor. When we think about character actors, and even movie stars who started as character actors, there's something about them, the way they speak, the rhythm of it, their look that we have a reaction to, an emotional reaction to. And every one of us has some of that. You may not feel like you are ABC to yourself, but people who encounter you, that's what they see. So we wanna find out who you are, and now we wanna display that character, that you, the truth of you in a variety of characters from a variety of times in a variety of places with a variety of points of view. So we might be in space, we might be medieval, we might be futuristic, we might be post-apocalyptic, we may be a doctor, a lawyer, a soldier, a wizard, a swordsman, a thief. We wanna bring all these characters with dissimilar energies, dissimilar worlds together to demonstrate all the things that you can do.   Randall: Yeah. Be authentic first. I mean, I like to listen to a demo. I have a 1 and a 1A. 1 is be authentic. That has to be it. I have to stop listening to you as an actor 'cause there's time for that after the demo's done. When I hear a snippet, whatever your 12 seconds or whatever the time is with that character, ideally, and I know you, you can't always do this, but ideally when that clip stops, you're like, no, wait, what happens? 'Cause you got invested in it, you know? And then the second thing is a certain amount of versatility. Now, I think unfortunately to most people, versatility they think means different voices. And it is true that that is part of it. There's no question that you have to be able to demonst --'cause if there're gonna be three characters in a game, I can't hear the same voice. So yes, you do have to be able to learn to change your register, to change your voice placement, to change accents, to do all this other kind of stuff.   But ultimately it really comes out of your attitude difference and your emotional difference. And being -- if you're hyped, if you are just in this manic place, your voice is just gonna sound different than if you are at the bottom of the well depressed, even being the same person. So find those things, not just the emotions of them, but what does your voice do when it does that? How are you delivering things in a different way when you find that? And that's where you get all this variance and you hear different people out of it. So that is definitely 1A. If you, if you're a one trick pony, if it's a good trick, you might get booked a lot, but you're just gonna up your game and up your bookings the more legitimate tricks you can show. I probably shouldn't use the word trick. The more legitimate shades of yourself that you can show, the more legitimate shades of what you do, the better it's gonna play for you.   Dave: And let me just say this, there are people who can do lots and lots of accents, lots and lots of different voices, and sometimes that can kind of hurt you on your demo. If you've done so many different things that they don't come away with a sense of who you are.   Randall: Right.   Dave: You might not remember the name of so-and-so who did all these voices. None of them were the same. They may have all been really good, but you don't remember who this person is.   Randall: Right.   Dave: So I always say, look, start with who you are and keep coming back to who you are. You may have some in different accents and different voices, but start with you and keep coming back to you.   Randall: Yep. I agree.   Anne: So is there a time period -- I know that I work with so many students that are new, and they always wanna know, well, how long will I have to study? Or how long will I have to do this before I can create a demo? If you had to give your experience, how long would it take for someone to -- I don't even wanna think that it's all about the demo because really it's about the acting. Right? And it's about who you are as a voice actor. How long should a student expect to study acting in video game VO? Is it the same for everybody? Is there a length of time that you think, oh, after five years, this will be great? Or after one year, what do you guys think?   Randall: Absolutely depends on the person. I think mentally, if you're talking to people who are getting into the business or are wanting to get into, even just, I've been doing commercial, I wanna do video games. Even if it's that, so somebody who has been working. I think if you mentally think two years of hard work, that's a good baseline. Now there are gonna be people who have all the tools that they need, and in six months they're just rocking and rolling. There are gonna be people that after two years, they're just now starting to figure it out. And it's gonna take 'em five. How do you know? But I think you need to be mentally prepared. Kinda like if you start a business up, I think this is gonna take me a $100,000 in a year. Double it or triple it and then you're probably safe. I think it's the same thing.   Dave: And in so many ways, I think people getting into voiceover and not just for video games or animation, but for the various genre, each of the genres calls for something a little different. There are some rules of the road for all of them. I just think when you get to video games especially, from the smallest whisper to the loudest shout, from characters who very much might be like the disc jockey you used to be, or to the used car salesman that maybe you remember -- you're gonna see all those kinds of characters. If you come with some characters, with some idea of playing like you were when you were a kid, when you were playing cops or robbers or spaceman and aliens -- whatever it was, you weren't judging yourself. You were having a good time. And you put yourself completely into it.   One of the big things I see with a lot of grown up people who now suddenly wanna do this, or maybe they've wanted to do it for a long time, but there's a timidity. Oh, I'm a little, I'm a little scared. I don't wanna, I don't wanna, I don't want anybody to think this is silly or -- you gotta give yourself to it and that holds people back. Your ability to read can hold you back. Because especially in video games and voiceover in general, we are reading in the moment. We've gotta take the words off the page and connect them to somebody. So I have run into people who've come to me, not often, but a couple people, I've said, look, you don't need me. You've got this. Get your demo done, you can do it with me or somebody else. But you're ready. There's some other people I've worked with for a long time, and I see improvement, but it's slow. But if that's where you really want to go, and you are getting better and getting better, stay on the road.   Randall: Yeah.   Anne: Yeah. It's a journey. It's a journey. So you guys have an exciting event coming up at the end of April I saw for Game VO. Tell us a little bit about that.   Randall: Well, this really came out of an outgrowth of Dave and I; we talk a lot. We've known each other for a long time. And one of the things that we have not seen along the way is what I would call a throughput. There's nothing wrong with this. In fact, there's some wonderful things to do this, but you go to most conferences or retreats or whatever you want to call them, and there's not a real throughput. You get the promo person, you got the commercial person. And there's, there's some real value to that, you know, especially if you're working in multiple genres. But what we don't see anybody doing is, okay, we're gonna strip this down to the basics and take you through -- you know, you don't get to cherry pick. We're gonna take you through this whole thing. Okay. You went to drama school and you're like, and you wanna roll your eyes? I don't know about going back to drama school.   I had a student, I shouldn't even call him a student, an extremely well known voice actor who took one of my recent two-day workshops. And when I saw his name on there, I was like, really? Well, that's interesting. I wonder why he's doing this. And you know, the thing that was really interesting is there was a technique that really truly went back to original acting. And this is a guy who's a drama school, totally trained, accredited, all this other kind of stuff. He's done so much other stuff that he literally had -- now it was easy to getting back in there, but he had forgotten to some degree like, no, you have to start here. He's got all these voices that he can do. He's a wonderful actor. You know, if you had mentioned your name, maybe he'd be like, really? Well that's the point. Somebody like that even didn't have that beginning. So all this throughput we have not seen. And so the idea that we wanna do is take people all the way through what it takes to really truly be a video game voice actor, from let's start with basics of acting all the way up to we're gonna do sessions, and you can't skip the steps along the way. You've gotta do this to this, to this, to this.   Dave: I have to echo the same thing, that I've worked with students who have been on camera, on stage. And for them, the world of voice acting is completely different. And because they're used to memorization, and being in costume, and having another actor that they're working with, they are lost all too often when it's words on a page and a microphone. And sometimes it's just coming from this genre to that genre. If you're doing promos, TV promos, you can have a style. If you're a narrator, you can have a style. If you're doing commercials, you can have a style and work and do very well. With video games, style isn't gonna carry you but so far. You have to be an actor.   Randall: It's a bigger thing. You know, it's, it's actually a bigger thing. You can't have a style.   Dave: Style can be this big, but if you're gonna be an actor --   Randall: No, that's true. It's a range. It's not just a style, it's a range.   Dave: Yeah. And learning how to connect to that, to your range.   Anne: And now, so when is this event and how long is this event?   Dave: Well, it's called Game VO Mexico 2023. It is happening in Akamal, Mexico. That's on the Yucatan Peninsula. And it's the 27th through the 30th of April.   Anne: Okay. Three days.   Randall: Three days.   Dave: Three days.   Anne: All right. Three days of intensive classes, sessions?   Dave: Intensive classes, sessions, and it's gonna be fun. And in one of the most beautiful places in the world. We were doing some location scouting a couple of months ago. I was down there with Randall, and we went to a restaurant, and that night they said, oh, come back and watch the sea turtles make their little baby walk to the sea. It's those kinds of --there's iguanas around and toucans. You'll hear the monkeys in the tree. I mean, it's, it's an amazing place and it's very much outside of your norm. I don't know about you, but have you ever been someplace, you got outside of your house, outside of your city, a different place, and suddenly you could think differently?   Anne: Oh yeah. It'll change your life.   Dave: This is gonna be one of those places, one of those events that you'll be able to shed some things that have been holding you back and embrace some things that are gonna carry you forward.   Anne: I love it. So end of April, where can people find out more information and sign up for this?   Randall: Well, it's the website. It's gamevomexico.com. So just like it sounds.   Dave: Gamevomexico.com.   Anne: All right. Awesome. And for the BOSSes out there, you guys are going to give us a special coupon?   Randall: That is correct.   Anne: Just for the BOSSes. So if you guys want to, you are definitely getting a discount.   Randall: It's a $500 discount. So it's, it's basically 10%. It's a sizable discount.   Anne: That's awesome. Woo. So a $500 discount, you guys can go to that website and enter a coupon code, VO BOSS, to get that discount. That's amazing. So gamevomexico.com. Coupon code VO BOSS to get that discount. And how can BOSSes get in touch with either one of you? Let's say Dave, if they wanna get training?   Dave: Oh, I'm so easy to find, they can email me at davefennoy@mac.com. They can go to my website, davefennoy.com and get in touch with me, and they can check me out every Wednesday at 6:00 PM Pacific for Ask Dave Fennoy anything. I promise I will talk about this.   Randall: This is true.   Anne: Yay. And Randall, what about you? How can people get in touch with you?   Randall: The two easiest places, and I say easy because I've got the long email addresses. My company, what I do the direction through, is Hamster Ball Studios. So it's Randall, randall@hamsterballstudios.com. But on the other side, the stuff that I do as far as teaching and coaching and consulting, I probably shouldn't say coaching 'cause I don't, you know, Dave's the one on one guy. I'm more big macro, big picture, hey, wow, dude. But it's randall@thevoicedirector.world.   Anne: Awesome. Thank you, guys, so very much. This was so informative, so wonderful, and we so appreciate that discount. BOSSes, check that out. Gamevomexico.com. Use that code of VO BOSS, get yourself a discount. BOSSes, I want to ask you a question. Do you have a local nonprofit that is close to your heart? Did you ever wish that you could do more to help them? Well, you certainly can. And visit 100voiceswhocare.org to learn how. Big shout-out to our sponsor, ipDTL. You too can connect and network like BOSSes like us three today. Thank you, guys ,so much again, find out more at ipdtl.com. Everyone, have an amazing week and we'll see you next week. Bye.   Randall: Take care, Anne.   Join us next week for another edition of VO BOSS with your host Anne Ganguzza. And take your business to the next level. Sign up for our mailing list at voBOSS.com and receive exclusive content, industry revolutionizing tips and strategies, and new ways to rock your business like a BOSS. Redistribution with permission. Coast to coast connectivity via ipDTL.

This week we're exploring the fascinating and controversial topic of flat earth theory....again. This ancient belief, once relegated to the fringes of society, has seen a resurgence in recent years thanks to the power of the internet and social media. On this episode, we'll take a deep dive into the history of the flat earth movement and examine the arguments made by its supporters.  We'll explore the evidence (or lack thereof) supporting the idea that the earth is not a globe, but rather a flat, disc-shaped plane. Whether you're a believer or a skeptic, you won't want to miss this revisit. Join us as we challenge our assumptions about the world around us and explore the flat earth phenomenon. Did we change our minds? *Intro sound clip features comedian Dan Cummins If you have any questions or topics you'd like to see the society cover, please reach out at Contact@hushhushsociety.com   You can find all our audio, blogs and drop sweet ratings at www.hushhushsociety.com Find our Video Content on our Rokfin Leave us a review on Apple, our website, Podchaser or GoodPods You can grab Hush Hush merch and help support the show on Patreon Link up with the society on social media:   Facebook   Instagram   Twitter    Join our Discord and chat with us   TRANSCRIPT Flat Earth 2   [00:01:00]  Dave: Greetings, Hushlings. Welcome back to the Hush Hush Society Conspiracy Hour. Mike: Where we journey into the world of conspiratorial mysteries and dark truths Dave: I'm Declassified Dave Mike: and I'm Mystery Mike and as though is we're joined by our fellow globetard Slick Fronk Sanders. Fronk: The Earth is probably round how you doing? Dave: it's going. Are things going around today? Mike: Quick question flat Earthers. How do boomerangs work on your flat plane? Fronk: Boomerangs are flat.  Dave: that got him. If you didn't notice today, we returned to the great debate in this episode. Is the Earth round? Is the Earth flat? Fronk: Hushling's, uh, in case you weren't [00:02:00] aware, we visited this topic in season three and completely shat all over the flat plane and we believe we should revisit this mother of all modern conspiracies, seeing as though it's such a big part of conspiracy culture. Dave: it's getting even bigger, even though you guys probably most definitely are gonna take a second dumping in this one. Mike: not as bad as the first. Dave: Not  Fronk: Yeah. We'll see. We'll see. Mike: we've discussed how there are different phases to being a flat earther. I'm guess I'm still in stage zero and we were in stage one in May of 2021. let's go up around to stage two But before we search for the horizon and fall off the flat plane and search for God in the sky under the spotlight sun, you can always find us on our social medias, Facebook, [00:03:00] Instagram, and Twitter Dave: You can also find everything hush hush society on our website, www.hushhushsociety.com. From episodes to links to merchandise, and the ability to drop a review or leave us a voicemail. We hope we get some after this episode. Mike: Hmm. Please do. Dave: Yeah. Fronk: And we keep mentioning that we are now also a video podcast. You can not only. To us, but you can watch us, you can see our faces. You can get that expressional action that you might not get from just an audio recording. And to find those episodes, you just gotta go to Rock Fin. It's, it's very simple. Rock fin.com. There's even an app. And in the search bar you just put in Hush Hush Society. You'll find us nice and easy. And there you can find all of our videos. you hit the notification button. You get notifications when our videos come out. Check it out. Mike: And just one last thing before we move on to the flat plane, we just [00:04:00] want to give a quick shout out to our newest patron, Gabrielle May. Thank you so much. We appreciate you. Fronk: Just in case you're new to this, we're gonna do a quick little recap for you on what Flat Earth theory is, and essentially, in a nutshell, the earth is flat rather than round. Pretty self explanatory, although it's made its appearance throughout history. The theory gained popularity around 2009 and has continued to grow ever since. Dave: It is regarded as one of the most controversial conspiracy theories in existence. Why claim that our earth is flat and not a globe easy? That's because it looks flat and feels flat and is surrounded by 200 feet of ice blocking us from traversing across an infinite plane or falling off the edge. Sounds correct, right? Fronk: I mean, yeah, that's what I've been made to believe. That's that's what it seems like Mike: Yeah. Riding on the back of a turtle through the cosmos, but the cosmos [00:05:00] doesn't exist, so where's the turtle going? Anyways,  according to believers, NASA and the ruling elite protect the ice walls from people attempting to climb over and fall from the disc. Can't make it up. They also believe that earth's gravity is an illusion, and that objects are driven up by a mysterious force called dark energy, rather than spinning and being stuck to a surface, Fronk: But on the other hand, there are countless photographs, videos, and images from astronauts and the International Space Station that kind of seem like evidence to show that the Earth is round. But these are not considered real evidence and are allegedly faked by the government or the ruling elites Dave: Now before we move on, flat, earthers already pissed off at our description in the beginning, Fronk: probably. Dave: we wanted to pull you in, but we'll make it as [00:06:00] fair as possible with some of the talking points that we're going to go over.  Now, Hushlings, there is the flat Earth Society as well as thousands of others from around the globe in groups. In addition to independent researchers, even though there is evidence to contradict some of these arguments, they are dismissed as fabrications of around earth conspiracy, along with stars, planets, galaxies, space, and gravity, all being a part of the facade of where we live. Mike: That is my biggest thing when it comes down to a debate between a flat earth and someone who believes that we live on a globe, is that it always results. In a flat earth are saying, well, that's what you've been told. You've been lied to. You're believing a lie that's being told to you, which is the old faithful of all conspiracy theorists, is that you're being lied to. That's all well and good, but at what point do you turn around and say, the [00:07:00] science is being lied to you. Nasa, we know lies to us. We know they fabricate images. We know what they do. But again, that's more of an argument that NASA is filled with bunch of liars. But at what point do you look at it maybe there is evidence that it's a globe or maybe there is evidence that it's a flat plane. There has to be a certain cutoff point where you stop saying, well, you're being lied to. That's what they want you to believe. That's what they're fabricating the science. They're fabricating this. They're fabricating that. How, and this has always been my issue, how do you talk to a flat earth and say, what piece of evidence would it take for you to say that it's a globe Dave: Pictures. Mike: pictures? , but then you show them a picture of this is what our earth looks like. It's a globe. Or you show them video or you show them anything. Well, that's been fabricated. It's always like this deniability to go against what they believe in. Like you, you have to deny [00:08:00] it. You have to deny it because it shakes the entire foundation of what their belief system is, especially when it comes to a flat earth. But then they always revert back to, that's what the Bible says. That's what the Bible says. I'm sorry, we, we've been over the Bible many times. We all know that it's been changed a thousand times and it's a book.  Fronk: not only that, but that's what they're making the Bible say. That's what certain people are interpreting the bible to say, and you can make the Bible say a lot of different things depending on how you decide to interpret it as a person. And if you're interpreting it as, they're telling me about the flat earth and so be it, Dave: This episode is gonna focus a little bit more heavily on some of the things that Mike and Fronk just mentioned, talking about NASA and the why would they lie and why would they fake and indoctrinated us as kids to believe that it's a ball. , and these are major [00:09:00] talking points that I've learned over the last year and a half since we've done this, other than just the physical evidence. We have the physical evidence if you're going to go by the, mainstream. we'll go through a bunch of stuff. I think we'll talk about religion too. So Mike, save those nails, buddy. Mike: We'll look into some of what we just listed and more throughout this episode, and it strongly suggested you listen to our first crack at this crust to understand where some of the historical beliefs come from and a lot of other things about this theory, mainly the science. But let's give this another oscillation, shall we? We're gonna literally hit some of the proposed theories and then firmly spit some facts. be prepared to, uh, confirm or deny your belief. Fronk: Before we completely dive into the flat plane, we're gonna talk about the planet as we've been taught in a traditional sense. Our Native [00:10:00] Earth is a terrestrial rocky planet, correct? Yes or no? I mean, whether it's flat around truth,  It has a dynamic and active surface with mountains, valley, canyons, you name it. All the different geographical structures and a variety of other features. It has water covering 70% of its surface, as well as harboring thousands of life forms, and it has a unique orbiting satellite arm. Dave: it has a circumference. Remember this number Hushlings 24,901 miles. And it shares our solar system with eight, sorry, Pluto, eight other planets and is rotating at around thousand miles an hour while orbiting our home star. Now this is where flat Earthers start to deny our existence on a spinning ball. we're orbiting around our sun at 67,000 miles an hour, all while zipping around the center of the Milky Way, roughly at [00:11:00] around 490,000 miles an hour. And the biggest claim, you can't feel it.   Mike: Well, that's just what we're taught in school. Unfortunately, most of us didn't escape the clutches of the Rockefeller Education System. There's that name again. Yep. He created the General Education Board in 1902 at the cost of 129 million. It's a lot of money back in 1902. It's a lot of money today and provided major funding for schools across the nation and was very influential in shaping the school system. Also, he's quoted as saying, I don't want a nation of thinkers. I want a nation of workers. Sounds like my pause. Fronk: And that speaks some deep truth because school does indoctrinate the nation into the trap of society. Once you hit like 10th grade, you're already filling out college applications, colleges that you're gonna be in debt to for the rest of your life, that you're gonna have to work for the majority of [00:12:00] your life to pay off for that job that you'll be working for the rest of your life. And it's this endless cycle. So that's definitely perpetuated by some global elitist. I get that to an extent, maybe the indoctrination portion of it. Dave: Well, from the beginning. Which classroom have you ever been in that didn't have a globe?    Fronk: In 1928, John D Rockefeller Jr. Financed an expedition to the South Pole as a British secret service. Agent Rockefeller knew perfectly that no South Pole existed, but people were curious about the true shape of the world. From 1956 onward, Antarctica was completely controlled by the Pentagon. Hence the Antarctic Treaty. And anybody visiting this chunk of land without permission was shot on site. Admiral by who we've talked about extensively, died mysteriously in 1957 and perhaps had a timely demise before he could tell the truth about what the South Pole. Mike: When it comes to the[00:13:00] Antarctic treaty and being shot on sight, who is shooting these people on sight? Fronk: Snow snipers. Those drones from Star Wars that landed on Hoth Mike: , that's a lot of land to patrol in order to watch for people.  Dave: remember. Antarctica is 5.2 million square miles as well. Mike: That's what doesn't make sense to me. You're gonna be shot on sight and that's another part of the Antarctic treaty that I also don't understand. Who is physically stopping you from going there? The only thing that's physically stopping you from going to Antarctica is it costs a lot of money. To either charter a boat that would go there. most people don't go there. Most charter boats don't go there. You could do a flyover, but that's only partial. Who is physically stopping you besides your bank account? Dave: I did see a video recently of some guys on a boat that were stopped. I think they were stopped by the New Zealand Navy [00:14:00] or the Australian Navy, and they were turning him around and you can see like. Ice in the distance or something like that. And I don't know if there was just like an iceberg that was out there that they were near, but the allegations on TikTok was got turned around at the bottom of the world, cause I believe it's, there's some degree, and I'm gonna sound uneducated saying this, but I don't know the degree, I think, but there's some degree at the bottom of the world. That you can't go. But the Antarctic treaty, it contradicts itself because the Antarctic treaty was supposed to be a demilitarized zone. No military stuff. No commercial, nothing. It was supposed to be strictly for research. Fronk: So why is the Navy there? Of who? New Zealand? Dave: It was either New Zealand or Australia Fronk: So what is the New Zealand or Australian Navy doing there? Dave: Well, they're close to Antarctica Fronk: Yeah, but isn't a non-military zone. Dave: But there's only military scientists maybe not all military scientists. You got like, Noah [00:15:00] scientists and stuff, and I'm sure NASA is down there, the Nazis, they're all down there. You know, you  got everybody. Antarctica looks like a continent to me, and there's a lot of pictures of it. And are they fake? I am. I'm not on the plane, so I don't know. . Why would it matter and why would they lie? The largest argument of why these elites would lie to us is most likely there's more land, more resources, maybe even unlimited resource. And lands beyond the ice shelf or walls, as well as the suppression of how powerful of beings we are, which can kind of be a different argument that has nothing to do with flat earth as well. thoughts on that? Fronk: I could get behind both of those points to an extent in the shoes of a flat Earth, for example. Yes. If you told me that there was unlimited resources, we're talking oil, we're talking the purest water in the world. We're talking minerals that are used to power the world's [00:16:00] electronics, whatever, energy generating methods that we might have unlimited supply of that which would completely destroy not only the US dollar, but the world economy, which is what the alleged elites thrive off of. And if it's not money that they thrive off of it is leaching our fucking energy. And we've talked about that a lot. And if we were to unlock some sort of crazy. Secret about ourselves or humanity as a whole. That might be incredibly enlightening to a lot of people or disturbing. I could see it going either way, but if, if a bunch of people woke up and they were incredibly enlightened, that could be bad for the reptilian negative energy blood suckers. Dave: I don't think it would go well for anybody. I think we always do ask this question a lot when we talk about this as is, would it change our everyday lives? And we usually say no, but it would, because we [00:17:00] probably have a massive economic shutdown. religions would collapse. There'd probably be some type of total anarchy that would happen and then we'd have our own epiphanies of being like, not really upset that I was wrong, but shit I was lied to as well, part of the Doy group. And that would be a shitty day. would it end everything for me? No, it would change everything for sure. But I think the unlimited resources part, I could see somebody hiding that, , we did talk about Admiral Byrd and Admiral Byrd went through, supposedly into the hollow earth, could he have misinterpreted and gone through a crack and found more land. Who knows? In the writing The Iron Republic, written by EW Barrington and published also in 1902, another one of that year with the education system. It was published in Florida Magazine, and it said that an explorer went through a crack in the ice walls and found an advanced civilization after being lost for over a month at sea. So that [00:18:00] means he went through the ice walls and there was more ocean,  Mike: Have there ever been any, any pictures or video of the ice wall or beyond it? Fronk: Uh, people take pictures of. Ice shelves and try to say that they're the ice walls, but at the same time, those could very well just be ice shelves or very large icebergs Mike: Makes sense. Makes sense.  Dave: I wanna see a flight going around the whole whatever, 76,000 miles it's supposed to actually be. Just banking around the whole rim. But you can't go there because the military will shoot you down in a de militarized. Mike: I still think that there's plenty of ways to get there. And we talked, who do we talk with? That had went to Antarctica? Was it Mark Fronk: on a cruise with like their father. Yeah. Mark O'Connell. Yeah. Dave: Yep. Mike: O'Connell said that , he went to Antarctica with his family. Dave: San Diego Padre's pitcher's there right now.  Fronk: Yeah, but he, he also mentioned that it was like the only [00:19:00] part of Antarctica that they'll let a civilian on and it's like this tiny little peninsula and they've got the little, novelty pole.  Like you could go up and touch it and take a picture with it. Yeah. And they got little stuff, penguins and shit. Dave: could it just be a simple explanation why we don't bring people there? One, you'll die  Fronk: , yes, it's very extreme terrain, there's tons of extreme terrain that we're allowed to go to that you would probably die in if you weren't very well equipped. Mike: Yeah, it makes sense that the only reason that they would be stopping people from going there, besides the massive, endless amounts of resources that they're hoarding from us, would be that they just don't want people going out there and fucking dying.  This brings up another allegation that even the word extraterrestrial means extra terra or more land. Trying to hold some weight to the notion this has been taught to us. We see in the film The Next Level by David Weiss. [00:20:00] He meets with an older woman named Ruth. She's 102, God bless her, from Connecticut, who was in tears claiming that she was taught flat Earth in school, in Hamden, Connecticut, and now feels vindicated and better because of his truths. Dave: she was like, lost it. Mike: like real, real emotional about it. Dave: Yeah. Really emotional about it Mike: Okay. We just mentioned the Rockefeller education system and him saying that he doesn't want a nation of thinkers. He wants a nation of workers. , in the 1920s, if she was taught that the earth was flat, She would've been learning from that education system. Dave: True. Yeah, but I don't think that there's actually, I've looked and looked and looked and couldn't find any definitive evidence that was saying that they actually taught that in schools. Because even in 2022 curriculums across the country are not the same, even across the [00:21:00] same states, depending on the size of your state, they're not the same, especially when you get to advanced levels like college professors are teaching what they want within that curriculum, How in 1920 were they all taught the same thing when there was still tons and tons and tons, tons of schools. , that's the thing that gets me,  she's 102. Could she have just been like, yeah, I saw that once and she saw it on a cartoon in the seventies while she was in her sixties,  Fronk: nonetheless, I do find it difficult to wrap my head around because it was David Weiss who did that interview or whatever, and he brings up a lot of stuff about flat Earth. I listen to a bunch of his talks and shows that he went on to and whatnot, and he brings up all of these points and , he tells people to just, look into it. You gotta look into it yourself. You gotta do your research. , you go to do this research and obviously if you're looking into stuff like this, you're not going to [00:22:00] Google. You're not using Bing, like the go to search engine for anything that you can't find is duck, duck go. And he's been saying that Duck, duck go is starting to censor things of this nature. So, like Dave, I went looking for what the global education was like in the 1910s, the 1920s, and. Again, like you said, no definitive proof. Is it a censorship thing or is it the fact that it was just not taught as flat in the 1920s? Dave: There's also allegations that say that, it was the thirties and even in the sixties through certain education systems. , I almost bought David Weiss's app now. David had contacted us and let us know how he thought about us. I think in the next level, , it almost looks like somebody's trying to sell something and maybe this woman really did feel vindicated Ruth if she's still alive or not. but I don't know, check out the next level. It's an interesting take on flat earth and [00:23:00] there's a bunch of other proponents that I'd never even heard of that have some interesting talking points. Mike: my beef when it comes to David is he did reach out to us. He reached out to us a couple times, especially after our flat Earth episode. And essentially just berated us through email it's the usual argument that I, especially for some odd reason am on the receiving end of arguments with flat earthers is just yelling and anger and just being pissed off consistently. and he was not too happy, as Dave said with how we covered it in our talking points. He said, oh, it's the same talking points. Well, it's the same talking points with flat Earthers too. you talk about the Bible, you talk about nasa, you talk about, it's like, it's, it's the same talking points because we're talking about the same fucking topic.  Of course we're gonna have our sides to it and of, and flat earthers are gonna have their sides to it. It's just the way that it is. That's how you have constructive. [00:24:00] Conversations that go back and forth with conflicting beliefs. Dave: I feel like it's a lot of frustration that , you're just not getting it. Fronk: I feel like he rails Coke and like smashes Globes in his free time, like buys globes from Goodwill and just fucking destroys them in the parking lot and then drives home  Dave: beats them with Louisville slugs. Just smack. Smack.  Mike: I can't wait for our next email correspondence after this one. Fronk: dude. It's not gonna be an email. It's gonna be a voice message and he is gonna be all fucking jacked up out of his mind.    Dave: Before we move on to like the major talking points we gotta talk about what Mike mentioned earlier where a lot of the stuff that is talked about goes back to biblical cosmology and creationism.  Mike: Yeah. And that's always been my biggest talking point with discussions with flat Earthers is explain it to me I will give you my counterpoints and you'll give me your points and we can go [00:25:00] back and forth, but complete your, persuasion of trying to make me see that it's a flat plane. Complete your argument without using the Bible. Every single fucking time. Every single time it ends in, well, it says this in the Bible and it says this, it always ends up being that let's put it this way. I've never met a flat earth that wasn't also at the same time a Bible thumper. Dave: I've met two types. I feel like there are conflicting points to, flat earthers even they step on each other's toes a little bit. They might not, not get along, but I think there are some folks that definitely don't believe in the biblical cosmology and it's just a physical thing. But every time you go back to, if it's a physical thing, that's a structure that's not a planet. It brings me to the question, even a non-religious person. It brings me to the question, well then we're talking about who created it, [00:26:00] not just the science of planets and, gas and particles coming together for, from a accretion. We're talking a whole different thing. Now. We're talking about, well, if it's a structure , and this is not what we think it is and this is not what I think it is, then it had to have been manufactured structure. We build structures. using that type of verbiage, brings even me to being like, , now we're in the religious realm or the faith realm. Fronk: You want me to blow your mind right now? you know what's easier than creating a whole universe writing fucking lines of code. Bam, bam.  Mike: Yeah, there it is. There it is. We should just bring all arguments of flat earth back to simulation theory. Fronk: That's where I, that, yeah. Prove to me that it's even physical and then maybe I'll consider whether, the shape is round or flat. Dave: Let's talk about curves. Fronk: Right. All right. Let's talk about the voluminous crevices and curves that our mother Earth provides. Right. The idea of a flat [00:27:00] earth stems from a number of viewpoints, and the most fundamental is to rely on one's own sense, to determine the true nature of one's surroundings. The world appears flat. Clouds, bottoms look like they're flat. Water looks like it's flat, and the sun moves. The stars are always the same positioned exactly how they always were, and all of these sensory cues indicate that we do, in fact, live on a flat. Dave: I'm not an astrophysicist and I'm not a  Fronk: Are you  sure?  Dave: Maybe, maybe, maybe in my other existence, the 500 of 'em. I'm a failed astrophysicist, but I do have a telescope and I've had it for quite some time and I'm pretty good with it. And it's Fronk: the fuck? Dave: eh, the stars not moving. I know that there's a difference between absolute, uh, motion. A difference between [00:28:00] relative motion, and I'm pretty sure that the way that the stars move, but their whole argument is, is that since everything's spinning at astronomical speeds every night, we would see different stars because we're just whipping around and seeing different things. So why are the stars the same? And it does get you thinking, well, why are the stars the same? Well, I'm not a professional astronomer, so I can't really explain that. But I would say it has something to do with relative motion where everything's moving in conjunction instead of just this vortex of insane speeds..  Fronk: In my peanut globetard brain, I'm more so thinking the speed of light and how long it actually takes for the light from the stars that we're seeing to travel here. I mean, yeah, we've been seeing the same stars for thousands and thousands and thousands of years, but at what point were those stars emitting that light? How long have those stars been dead for, and how long is it gonna take for us to see new stars again? [00:29:00] I can't answer any of those questions for you, but I'm pretty sure that's. Dave: Valid point. Mike: Also in the grand scheme of time, humanity has been around a fucking blink in universal time. again to Fronk's point here, we're seeing the same stars because we're living 80 years and that's it. As opposed to the billions and billions and billions of years that the universe has existed and that that light has traveled and those stars have either been born, exploded, died, and disappeared. , we're seeing nothing, nothing. Dave: Well, that goes back to you being an insignificant being and that being suppressed. There's that argument. We'll have that later. We'll fight about it. Mike: there, there won't be an argument. We are insignificant beings.  Even if you took it back to a creationist argument, we are fucking insignificant. We are insignificant, we're [00:30:00] nothing. If we were something we would still commune with Gods, we would still commune with universal spirits. We would be. Something more than fucking meat sacks traveling through the world going, oh, I wonder what job I'm gonna have next, that I'm gonna work fucking 40 hours a week at and pull in a menial salary and take care of my 5.2 fucking kids, and then eventually retire at the ripe old age of 70 years old. And that's my life. How special am I Dave: Well, that's the system that you're locked in. Mike: system or not? Even if I had no job, even if I was just wandering, enjoying my life, going to these wonderful, exotic places, just doing everything that I wanted to do. At the end of it all 70 to 80 years, that's what I get. That's fucking it. in those 70 to 80 years, when am I seeing God? When am I [00:31:00] seeing a hint of any extraterrestrial, any, any extra dimensional, any religious, fucking spiritual guide? Anything. Anything.  when I'm not, fucked up on drugs, Dave: psychedelics. Fronk: God tier moment. Mike goes, have you ever given an ant food? Throw that bitch in there.  Dave: A lot of people see that as negative, and I don't really see it as negative that we're that insignificant. It's kind of the same argument that I make about the flight paths, which we'll quickly touch on is, well, the, the plane has to keep dipping down to keep going. Have you seen how small a plane is to how big the earth is? Mike: That's one thing that they don't understand is fucking perspective. You don't understand  perspective.  Dave: I'm glad you brought that up because what Frankie said a couple minutes ago about viewpoints perspective, seeing, if the clouds appear flat, water is flat, that's called using an empirical approach or an approach that relies on information [00:32:00] on your senses.  What's your feeble little human garbage eyes can see? And if you can't see the curve, then it doesn't exist. They use mathematics. I am. Stupid with math. The math is if the earth is round, there should be a degree of curvature, eight inches per mile squared. one mile would be eight inches, two miles, 32 inches, three miles, 72 inches, four miles, 128, and so on.  128 inches is about 10 feet of curvature. So that would be, four miles away now? 10 feet. A considerable amount when you're looking at a boat on. Water the water line to the top, say, let's say an aircraft carrier is probably 60 to 90 feet. You'd have to be at least around 20 miles to not just see the flight deck of that ship going over the horizon.  Then you got the whole, you got the bridge, you got everything else. You got all the radar you're probably looking at 120 feet at least to the top of, all of the structures on that ship. How many miles is that? . That's the thing. Another thing with the insignificance is [00:33:00] that we're tiny as fuck. Like how can we see anything? If you're five foot 10 and you're looking at something how far are you actually gonna see Mike: but what about the Zoom, Dave? What about the Zoom? Some of those cameras, they can zoom way, way, way, way in. They take those cameras and they zoom, zoom, zoom, and they go, well, that city is 150 miles away. There's no way that I should see it because of this curvature. And this camera is picking it up perfectly. So how do they work? Dave: I think they use the Chicago skyline for example. And I didn't do the experiment and look on Google Maps , and see the different distances, but you gotta remember the Sears Tower, whatever the fuck it's called now, it's like well over a thousand feet tall. and they're like, well, you can see the whole thing you. In those pictures that are shown as examples, you cannot see the entire Sears Tower. There is hundreds of feet of displacement in Chicago. Like New York has a [00:34:00] very tall fucking skyline. But you could still see those buildings and they're there, and on top of it, you're getting atmospheric disturbance. You're getting a layer of almost a mirage layer.  Mike: Dave was just going over the math of the entire situation, it's 67 feet per 10 miles. Now, before we move on, we have to mention that there are ball earthers or globes or globe tards that do argue that this equation is misused by flat earthers. And is the equation of calculating a parabola, not a full sphere. Dave: The guy who said that this is Misused was something that was found on the Michael Stata podcast and apparently himself and another guy that were on there, one was like an F 18 pilot, and then he's got certain hundreds and hundreds amount of hours as being a pilot. he had mentioned that the equation was misused and used the parabola as an example, that you're talking [00:35:00] about something like this instead of something that's a full circle even if you're talking about it on the curve, , it's still a parabola, even on that surface. Even though the equations are right and the math is right to calculate the curvature of the earth with its circumference that's known.  Might not be accurate. And uh, who did that? Aristophenes did that. And I know Flat Earthers is gonna say that guy didn't even fucking exist. which maybe he did, maybe he didn't. That was 2000 years ago. Who knows? Fronk: just to be fair to the flat earthers, right? We can't nitpick what false history we believe and don't, we do tend to say that history could have been falsified many times. If history has been erased at any point in time there is the possibility that this dude was made. Mike: using this model, a person standing on a spherical surface with eyes five feet, 11 inches above the ground, can [00:36:00] hypothetically see the ground up to about three miles away, but a person at the top of the Eiffel Tower at 896 feet can see the ground up to 36.6 miles away. Dave: Well, they're higher in altitude, Mike: Mm-hmm. . Mm-hmm. . Mm-hmm.  Dave: but the argument is that you can't see using the calculation, you wouldn't be able to see because it's dipping. I think the argument is wrong, and I'm not a mathematician and I'm not good at math, but from what my I see is that almost like some of these people are seeing it smaller than what it is. I don't think they're really getting how big this thing is and how small we are. So even at a 900 feet, Yes, you can see almost 10 times as much in distance, but you're also almost a thousand feet in the air,  Mike: Again,  perspective.   Fronk: If the degree of the [00:37:00] curvature is found to be the same everywhere on earth's surface, and the surface is in fact large enough, the constant curvature demonstrates that the earth is a. Now what about water? James Underdown, executive Director for the Center for Inquiry, Los Angeles worked with the Independent Investigations Group, a nonprofit dedicated to investigating exceptional claims using scientific methods. A boat based target with horizontal stripes was used in one of these tests. Dave: He's quoted as saying we sent a boat out on the water, and the farther it goes, the more the stripes disappear. That was supposed to demonstrate the curvature of the planet, but most flat earthers disagreed generating considerable debate. The biggest reason for these arguments with flat earth, obviously it comes from flat Earth, Dave(David Weiss), and it's all about perspective, as we said. The ground would never obscure distant objects on a flat earth. It should be possible to see all the way to the edge of the [00:38:00] world, right? That is the question that we would be asking. The answer we get is the atmosphere is opaque. Now, using the vernacular atmosphere is almost a conundrum in itself, and you ask, well, why did you use that? Well, we don't have another word for it.  Mike: Why not just make up a word like you fucking make up your own beliefs?  Just fucking do it. Just do it. . Make up a new word. It's very easy. It's done every day.   [00:39:00] Ad break [00:40:00]    Mike: Let's move on to another major fight in this, the position of the sun, sunrise and sunset. In case you were wondering, the sun is always above the Earth's surface in both models, Yet in the flat model, it travels in circles around the Earth's north pole, which is also, its. The seasons are caused by the expansion [00:41:00] and contraction of these circles. What about latitude?  Dave: What about latitude? I mean,  that would  Mike: about latitude  Dave: right? Mike: Hmm. Dave: The largest circumference of latitude on this planet would be the equator. Correct?  Mike: Yep. Dave: And then you have the tropic cancer and the tropic of Capricorn. The midpoints. I don't know that seems pretty, easy to explain. Maybe I'm just stupid. Could  be,  Mike: Globetard Dave: yeah. Fronk: Fucking idiot. Do some research Mike: Look into it. Fronk: where, show me where, show me where I could read about this that isn't on the app.  Mike: In the Bible, Fronk: Oh, yeah. Okay. Okay. All right. Here we go with the fucking Bible again. Mike: and books from the  17 hundreds  Fronk: They considered the sun to be much closer than 93 million miles and possibly even as far as 3000 miles or as close as 300 miles and moves in a circle or a helix pattern because the earth is supposedly accelerating upward, obviously toward the sun [00:42:00] at 9.8 meters per second because they don't believe in gravity, and that explains gravity away. with that being said, the sun must also be accelerating in the same direction as this hypothetical earth vortex. Make sense? You guys got that? Dave: instead of us spinning with things spinning around us and us spinning around something else and then that spinning around something else, which is relative there's a really big graphic that's always shown on every documentary, every video, and it's like the sun being shot out of a. With everything else just like around it, it looks like a DNA strand, most globe tards, know that that's not how motion works with celestial bodies. that one got me and always gets me, is every time that's shown. I'm like, oh God.  Fronk: other astronomical bodies moving in such a pattern? We have like really high powered telescopes Mike: Because space is not real.  Fronk: [00:43:00] Oh, shit. I forgot. I'm, I'm sorry. I'm sorry. You got me.  Okay. All right. All right. Right. All right. Dave: no space. No space. We have to remember that throughout this whole episode, there's no space. Fronk: Yes. Yes. Mike: if you take space out of the equation, introduce God in the Bible, and just ignore all known fucking science for the past like 300 years, you can be a flat earther. Fronk: wait is it no space or it's just the sun and the moon and the earth, or , is it None of that and it's just plain earth with our spinning moon, sun clock sort of thing happening, Which one is it? Do flat earthers believe either the barrel bore theory or the plate theory? Dave: Everything's contained in a system. Fronk: It's one in the same Dave: and everything above us is, I guess, the abyss, because there's a lot of arguments that, like with this Artemis program, whether it's fake or not, we'll talk about NASA in a little bit, but whether it's fake or not, Rockets [00:44:00] don't work in a vacuum apparently. but they're actually using, their own inertia to move in a vacuum. But I guess things don't work that way according to some. That brings us to sunrise and sunset. I don't want to get too far into this cuz this can take hours and hours and hours to argue about, let's talk about sunrise and sunset real quick.  Fronk: Unlike a bunch of these other points, the day and night cycles are actually kind of easily explained on a flat plane. The sun theoretically would move in circles above the North Pole. Or around the North Pole, and when it's over your head, it's day, and when it's not, it's nighttime. The light of the sun is then confined to a limited area on the earth, right? Because it's right above you. This claim never held any weight for me in particular because it can be debunked with science.  On top of this, all of the planets and stars aren't actually what they appear to be like [00:45:00] big rock balls in space or giant balls of gas, but they're actually luminaries. Yet. We also hear a lot of people say, well, we don't know what they. Dave: Stars and planets are one of the biggest things that cannot be explained yet. We can explain them with telescopes. We've been talking a lot about movement. We have to talk about heliocentric model, which is the one that we supposedly live in and not the geocentric model, which is the one that flat earthers live in. When we are confronted with the question of how the earth is able to orbit the sun, and it's not a sphere it's pretty simple. The earth actually doesn't orbit the sun, as we've been saying. This is so, because instead of the sun being the center of our solar system, our planet is actually the center of our solar system or controlled environment. Mike: In reality, we have Helio Centrism, also known as the Heliocentric Model. It's the astronomical model in which the earth and planets revolve around the sun at the center historically, [00:46:00] Helio Centrism was opposed to geo centrism, which placed the earth at the center. now we've hit the firmament. Fronk: In the cosmology of the flat earth. The disc shaped planet is covered by a dome whose edges stopped just beyond the roughly 145 foot high ice wall of Antarctica. And these stars are fixed on this dome while the sun and moon, which are only about 31 miles in diameter, revolve about a 3,100 miles above the earth. Dave: Now, as we said before in biblical cosmology, the firmament is a vast, solid dome or semi solid dome created by God during his creation in the first six days To divide the primal sea into upper and lower portions so that the dry land could appear, which surrounds the earth or frozen water, I've heard this a lot with the biblical cosmology stuff, is that it's explained during day one, day two, day three, and they even say in the Bible, God created the firmament. I [00:47:00] believe it's on ver bran's headstone, as we've mentioned previously. I think it's a lot of wordplay and interpretation,  Mike: We also mentioned back in Hollow Moon, if you've listened to that episode about the Zulu tribe, where the firmament or atmosphere rained down to earth.  Our flat earthers saying that the sky is liquid possibly. Clearly, we know that the Earth's atmosphere is 78% nitrogen, 21% oxygen, 0.9% argon and 0.1% of other gases. Dave: Now, quickly, recently, I've heard a lot of arguments in quite a few different shows and videos not just one proponent, but multiple proponents on this theory. And a lot of 'em will say, well, the atmosphere itself is just a different version of water as it is up in space, a whole different version of water. Because they use the example of if you go to the deep oceans or certain lakes, there's different [00:48:00] salinities of water. You'll have heavier water on the bottom, different pockets of water. the atmosphere works the same way and they say, because it has the same elements in it. Now, if our atmosphere is made up of 78% nitrogen, 21% oxygen, yes, there's hydrogen in that, because if we need water, we need H two O, which does happen in the atmosphere, Fronk: shit. That's why they sent U-boats to space it's water. Dave: oh. Fronk: Oh, Dave: That's it.  You got me.  Mike: done. We're done.    Final thoughts, boys? Fronk: Thank you Hushlings. Dave: Yeah, that's it. Mike: Okay, so we're talking about the firmament currently. Now I just want everyone to know the actual definition of a firmament. So the firmament is the vault or arch of the sky. The firmament isn't necessarily something that is physical. It is something that is viewed. the [00:49:00] arch from one horizon to the other is the sky. That is the firmament. So when everybody's saying, oh, firmament, they're talking about the firmament, they're talking about something that's physically there. No, that's a viewpoint. The firmament refers to horizon. To horizon. The arch of the sky as you see it from one end of your viewpoint to the other Dave: Makes sense. There's a lot of that too, where it said that you're, uh, you have a personal viewing bubble and I think that's misinterpreted as what you're actually, what you can see you go up a 1500 foot mountain, you look around, you can see 360 degrees.  Mike: that's your firmament. Dave: that's your firmament. Fronk: One bar from Suicide Boy's last album. One of them goes Dome. So good. I think she think the earth is flat mouth like the fucking firmament. She got my eyes rolling back. There you go.  Mike: it says it all. Fronk: [00:50:00] It says it all, it says it all your, your mouth has a firmament. Mike: Show me what that firmament do. Fronk: land ho. We have hit the ice walls and the absence of the poles along the edge of our local area exists a massive 150 foot ice wall. This ice wall is on the coast of Antarctica, and The wall is absolutely gargantuan, made up of solid water, ice that surrounds our world and holds our world's oceans in.   And the South Pole does not exist, whereas the North Pole is just a giant mountain called a hyperly that you can't visit. Dave: The ice walls were discovered by Sir James Clark, who was a British naval officer and polar explorer who was amongst the first adventure to Antarctica in an attempt to determine the position of the south magnetic pole between 1768 and 1779. [00:51:00] Upon confronting the massive vertical front of ice heat famously remarked. Mike: "It was an obstruction of such character as to leave no doubt in my mind as to our future proceedings for we might as well sail through the Cliffs of Dover as to penetrate such a mass. That's what she said. It would be impossible to conceive a more solid looking mass of ice. Not the smallest appearance of any rent or fisher. Could we discover throughout the whole of its extent and the intensely bright sky beyond it, but too plainly indicated. The great distance to which it wreaths, southward " Dave: apparently it took him three years or so to do one of the journeys and he circumnavigated the globe at 77,000 miles. what if he did it three times and did [00:52:00] 77,000 miles? That's the one thing that I've always thought is that, was it one trip  Fronk: And he just didn't know Mike: But again, in the 18 hundreds, let's say that this guy goes and he encounters an ice shelf, would he not think that was an ice wall? Dave: yeah, Fronk: like, oh shit. Well this is the edge of the world I suppose. Mike: there's no going past this. My ship can't go through that. Dave: I mean, yeah, that would be logical. Mike: I think this is what we said in the first one, a lot of these arguments for a flat earth revert back to like this 18 hundreds knowledge. Let's look at this book from the 18 hundreds. Look, they mentioned the firmament. Let's look at this. they talk about ice stones and blah, blah, blah. Fronk: The future is a lie. . The truth lies in the 18 hundreds. Reject modernity, Now all of this would of course, imply that Antarctica isn't at all what they say. And we've [00:53:00] mentioned this quite a bit about the Antarctic treaty already and the Antarctic bases and all of the secrets that they hide and you can't go there. You're not allowed There. Only scientists. Yeah. That's where they're hiding the edge of the.  Dave: Let's board a plane real quick and try to go to Antarctica. I know we say we can get there by ship, but two major arguments about airplanes with the flat earth theory is one, there's no round trip flights to Antarctica. And I think we covered this briefly in our first one where we had said, Antarctica fucking sucks. And that's probably why there's no round trip flights and how a lot of the Southern Hemisphere flights cannot be explained. And I believe we went over that a lot in our first episode. And I still stick by all of what I thought about that. Now, the other question that comes up with this theory  one, can you see curve in a commercial aircraft? And two, the aircraft always has to be pitching nose down after a [00:54:00] certain amount of time. Those two arguments come up major in this theory. So I wanna get your thoughts on do planes always have to tip downward as you're flying? Cuz you've all been on flights before, Fronk: No, the plane isn't nose diving or it doesn't feel like it anyway. It doesn't seem like it's nose diving by any means. Dave: but you would feel it. You can feel drop in altitude when you're starting to descend and you feel that, whew, almost that weird weightlessness when they drop a couple hundred feet or a thousand feet pretty quickly. You can feel turbulence, obviously. , I don't think that it necessarily pitches downward after a certain distance because I think, like I said earlier, planes are tiny and the earth is huge. So I don't think there's that much effect of a plane having to move when it's floating on top of a surface of air. Fronk: If a plane pitched downwards while at like max [00:55:00] altitude, wouldn't it just start losing altitude? Wouldn't you just be going towards the ground or am I being peanut brained? Dave: If planes were going in the straight path following the Earth's curve, then they would fly off into space. That's what they say. And I think it's simpler than that. Planes fly in a certain area from 35,000 to 50,000 feet, especially commercial aircraft in a certain layer of air that's thinnest. Which is why they can move as fast as they can, but I don't believe that they're pitching because they're so tiny that everything is going to appear flat at 35,000 feet cuz the earth is so big. Mike: , they're maintaining a certain altitude from the ground, so they're not pitching anything. They're just going with the natural atmosphere of the earth. Dave: Gravity.  Mike: Yeah.    Dave: The plane thing never, never made too much sense to me, especially with the flying off into space. If you didn't compensate for curvature, it's because the Plains Center [00:56:00] mass is always perpendicular with the ground and the plane is so insignificantly small. That you will not notice those changes. You notice left and right banks on planes, , you take a direction moving towards another city, you see it, you feel the whole plane go and you're looking towards the ground. If you're ascending, you feel that inertia you're getting pulled up into the air, especially on takeoffs. Or if you're descending, you feel that, oh, the pilot goes, we're gonna be descending in a couple minutes, and all of a sudden you feel that that drop, you feel that motion left, right, and vertical but you don't feel those nudges that they say that they're doing. So I don't think that that happens. I just think the center mass of that plane is fighting against gravity to keep it up. It's a boat in the sky. Mike: even if they did, that's a continuous compensation. So it's not like they're flying a certain distance and then going, oh, well I'm eight inches above where I was before. I need to adjust. Even if that was the truth, they would just make manual [00:57:00] adjustments as they went. So over that period of time, a half inch, a quarter inch, whatever you wouldn't even be able to tell in the first place if that was the case. Fronk: And that would only be if you were flying like across the world. I'm sure it's even less so if you're flying from somewhere on the east coast down to like Minnesota or something, it's gonna be even less noticeable if you're traveling somewhere that local. Dave: You're only traveling a couple hundred miles. Fronk: Yeah, exactly. Mike: I'm sure the figures are out there, but how many flat earthers are from America versus from the rest of the world? Dave: Good question. Mike: just wondering. Dave: I don't know the answer to that. I would say there's a lot in America. America is a very conspiracy driven country at the moment, and flat earth boils down to every other conspiracy. If you believe wholeheartedly in this, you believe everything else, the lies, everything is fake. Your entire [00:58:00] existence is fake. that's from what I get Fronk: That sucks. And then, and then from that point where do they go with that? They yell at other people about it or We're gonna briefly go over the eclipse aspect of flat earth theory. Now, we all obviously know what eclipses are. That's when the moon aligns with the sun and the earth and blocks out the sun. You know the deal. and remember that the moon is 400 times smaller than the sun. It's also about 400 times closer to the earth than the sun is. Is that coincidence that this astronomical phenomenon happens? Uh, Dave: Well, I can tell you from the flat earth side that that is almost impossible.  Mike: It's pretty impossible either way. Like it's pretty coincidental. I will give it to them that when you're talking about the sun and the moon being these like perfect distances and these perfect sizes and these per that's intriguing to say the least. I will give them. Dave: Which we did go over[00:59:00] Hollow moon theory if the moon was placed here, it was placed here on purpose, but then that would give weight to some type of, maybe not creationism, but some type of external control or external observation, which I think all of us are on the fence with that.  That could be, it could not be, Mike: Again, prove to me that any of this is real Dave: So there's two types of eclipses. There's solar and lunar eclipses. Now, the way solar eclipses work is that the moon orbits in between the sun and the earth. And when that occurs, obviously the moon blocks out the sunlight. You see the corona bought a bing. You have a solar eclipse, and the moon also casts a shadow on the earth. Now, a lot of the times it's told that the moon can't cast this little tiny pin prick shadow that goes across the earth. But if the moon is relatively 200,000 miles away, why couldn't it?  Mike: According to flat Earth theorists, this astronomical phenomenon is [01:00:00] actually a glimpse of a mysterious shadow object that orbits the sun and occasionally passes in front of the moon. From our point of view, could it be planet X Nibiru? No. This object is known as the anti moon. That's new Dave: another random object in our solar system. We could go on and on about eclipses, but we have to talk about one of the biggest fallacies of our education system. Gravity, Mike: not real. Dave: not real. Now, one of the most well agreed upon theories is general relativity. And it is the theory of gravitation developed by our boy Albert Einstein, who was apparently a conman according to flat earthers. And between 1907 and 1915, he figured all this out. The theory of general relativity says that an observe gravitational effect between masses results from their warping of space time. Gravity is still just a theory to us. I guess we can all be on the fence [01:01:00] on it cause we really don't get it. And I think scientists have , admitted that they don't get it,  Mike: Well, didn't recently they say that they had to like rework that entire thought process for some discovery that they had found that the theory of relativity had to be, had to be rethought or it was not necessarily wrong entirely, but partially, I guess., it had to do with the way that a black hole was working, where for the first time they saw a star coming out of a black hole. Fronk: Yeah, I saw that it was being regurgitated. They saw light coming out of a black hole. That's right. Mike: Things are happening, man. Whether you believe in space or not, it's. Pretty wild. Fronk: Newton's love gravitation states every point Mass attracts every single other point mass by a force acting along the line intersecting both points. I don't know what that means. The force is proportional to the product of the two [01:02:00] masses and inversely proportional to the square of the distance between them. Exactly. That's what I've been saying this whole Mike: Sounds about right. Thanks boys. Well, what is gravity? According to this theory, it's stated that the earth isn't pulled into a sphere because the force known as gravity exists in a greatly diminished form compared to what is commonly taught, which is that we're being pulled down to the center of the earth while. The flat Earth is constantly accelerating up at a rate of 32 feet per second squared or 9.8 meters per second squared. As we had previously mentioned, this constant acceleration causes what you think of as gravity, but it's actually caused by a universal accelerator known as dark energy or Etheric wind. Never heard of Etheric wind. That's interesting, Fronk: time's that post Taco Bell shit's my etheric wind. Dave: [01:03:00] Furthermore with this we hear words like density and buoyancy a lot in these theories arguments, which is why things fall to the ground that are heavier and explains rockets, which are thought to actually be filled with helium and have a pyrotechnic show. that proves that all things fall at 9.8 meters squared.   Dave: All right boys, we're getting towards the end of our flat earth expedition here. But we have to go back in the sky. That brings us to rockets and satellites. As we just mentioned. Proponents of flat earth theory believe that satellites totally exist, but cannot be seen from the ground and are actually held in the atmosphere by helium balloons. Hence why NASA is the largest consumer of helium and they sometimes crash into the planet, which we call them weather balloons. And I guess that would explain the weather balloon phenomenon.  Fronk: Satellites in low earth orbit are constantly fighting gravity. According to science, some are geographically fixed and keep their [01:04:00] orbit by balancing two factors, their velocity, which is the speed required to travel in a straight line and their gravitational pull to the earth. To resist the stronger gravitational pole, a satellite orbiting closer to the earth requires more velocity. And of course, we're not going to get out of this debriefing without a little bit of NASA sprinkled in that bitch. Mike: Yes, good old nasa, our friends over there, professional cgi. It's widely assumed that humans have never left the Earth's atmosphere. In fact, we've never left earth and entered space because we lack the ability to do so in the first place unless you're a Nazi and a U-boat. Most of what society has been taught about space is completely made up or greatly exaggerated. By the government and or the elites. There's also the claim that humans have never landed on the moon. I'm with that, and that the infamous moon landings witnessed by the entire world in [01:05:00] 1969 were a sham. Fronk: Okay. I'll give them that. A major claim is that any pictures from the Apollo 11 mission that show that our planet as a sphere in the distance were fabricated by the government and nasa and NASA's mission is not to hide the shape of the earth or trick people into thinking it's round or anything else of the sort. Dave: Well, that's what NASA says, right?  We obviously know that there's some type of space travel conspiracy, whether it's more advanced or it doesn't exist. Possibly Nasa's mission is to create the illusion of space travel in order to, cover for the military, and their dominance in space. One thing we forgot to mention that I thought of real quick when you guys were talking is the quick notion on gravity. There's a lot of flat earthers that will say, well, can you jump, when you jump off the earth, you a hundred, 200 pound person jumping off the earth. Do you come back [01:06:00] down? And was it easy to jump? Then why is gravity so strong? Fronk: that's the whole argument of like, why does Gravity hold our planet's, oceans On  Dave: Yeah. Yeah. If it can  hold all this water and all this mass,  why can you jump off your roof and hit the ground? Mike: Because there is a different pull depending on the mass of the object.  Dave: Mike wins a gold star Fronk: gold sticker for you. Mike: boys, let's get into our final thoughts. Everything that was on Reddit, we've been through, we've done this whole thing. I wanna know the final thoughts as we get into stage two of becoming a flat earth. are we now believing that gravity is not real? The sun is a, lamp and uh, and we live on a flat plain, surrounded by an ice wall. Dave, are you a flat earther? Dave: No. sadly, I am not a flat earther. I think it's an [01:07:00] interesting theory that opens up a lot of more conspiracies and there are some valid questions, but I think a lot of it has to do with our lack of actually being able to see things because we are restricted beings. Uh, the one thing about flat earth theory that I find really fascinating is the suppression of information, the hidden things. And I think that's the conspiratorial part that really pulls me, believing that it is a different shape or an infinite plane or a snow globe, or, flatterers is gonna get so mad at me for saying that because we don't believe it's a snow globe. It doesn't look like a pancake. They all have different theories and a lot of it goes back to religion. A lot of it goes to creationism. A lot of it goes back to every other conspiracy you've ever heard of. So for me, still, I still think we live on a planet. the definition of planet is what we live on. Is it a perfect sphere? I think that's proven that it's not a perfect sphere.[01:08:00] I'm not a scientist, but I've done research and research and research and supposedly it takes up to two weeks or so to become a flat earth. I've been doing this research since like the end of July, and I'm still not convinced. wanted to give it a fair shake. Didn't wanna be a douche bag. Would invite any flat earth to come on and talk to us. We'd love to have you on, but You didn't get me yet. Mike: I will take my final thoughts, a complete left turn here. I don't care. I don't care whether it's a giant paella pan or if we live on a dodge ball. I, I don't care. I don't care. Maybe it's the blue pilled part of my brain that still exists. I don't give a shit. It doesn't change anything. I'm still gonna wake up in the morning and have to go to work, have to pay my taxes, and eventually I'm gonna fucking die. That's just the way that it is. I don't care if we live on a flat plane, I don't care if we live on a globe. It's just the way that [01:09:00] it is. but I don't think that we live on a fly plane. I'm just gonna say that I don't think that I, I do think that there is a lot of cover up of our former history. That much I believe is true. I do believe that NASA is filled with a bunch of liars and they do fabricate things including, setting up these videos where they're watching astronauts float around, but the water stays in a cup. That's an interesting one. , I do think that they do composite images together and they are a bunch of liars that I completely agree with. . I love you whether you're a flat earth or not, but no, it's a no for me. Fran, give us your final thoughts. Did you become a flat earther in this episode?   Fronk: No, I didn't. , I'm not gonna go off on a limb and say that I tried to give flat earth theory, the benefit of [01:10:00] the doubt, but I tried to stay open-ended, especially towards like the beginning of the episode. I was just trying to like see it from both sides and I still do to an extent. And you're right in saying that their best argument is the space shit and nasa, but, that can't be all you're going off of here, because that, lends to so much other shit besides just the shape of the planet.  And not only that, if you're like sold on the shape of the planet, then you've been deceived. You know what, I'm gonna pull a flirter and tell you what you've been taught on. The internet is wrong, and it's all code. You've been tricked into thinking that what we live on is physical and that it has shape. There is no shape. I've never even been out of the country. You can't even convince me that Australia's real, let alone the, the, the fucking shape of the  Mike: you're partial flat earther because they don't believe that Australia is real either. Fronk: [01:11:00] Oh, no. Australia's not real Mike: listen, if you're in Australia and you, uh, you live there full time, reach out to us. Send us an email. Even better a voicemail, because I just want to hear the accent. Send us a voicemail and say, Hey, yeah, I exist. I'm here. This is a real place. Dave: Clearly they exist. They're number three on our Spotify Mike: That's right. Thanks Australia. Fronk: No, I, I never tried to doubt Australia. It was a metaphor, but Dave: Our Hustralians down under, Mike: That's hilarious. Dave: , if we offended you we're sorry. Well, I partially am. Mike: I, I, listen, I tried this episode. I think that I was better than the first episode. I didn't sit there and say anybody was an idiot or any of that stuff. like I said, you believe what you wanna believe, but on, at the end of the day, I don't think that it really matters. Fronk: And if it makes you feel [01:12:00] special, by all means,

In this edition of the AppleVis Extra, Dave Nason and Thomas Domville are joined by Sarah Herrlinger, Director of Global Accessibility Policy and Initiatives at Apple; and Dean Hudson, Accessibility Evangelist at Apple. Topics covered in this podcast include a look at some of the new accessibility features coming later this year to Apple's platforms, as well as a broader look at Apple's approach to making their products accessible to as many people as possible.Full transcript of podcastPlease note, This transcript was created solely for communication access. It is not a certified legal transcript and is not entirely verbatim.Audio: An AppleVis original.Dave: Hello and welcome to the AppleVis Extra Podcast. My name is Dave Nason, and I am joined by Mr. Thomas Domville. How are you, Tom?Thomas: I'm doing great, Dave. It's good to be with you again. This is going to be a fun podcast,.Dave: Yeah, this is one of our more exciting podcasts that we get to do every now and then. We didn't do it last year, but we did it two or three years before that, and they're back. It's Sarah Herrlinger and Dean Hudson from Apple's accessibility team. Great to have them back.Thomas: I know, right. It's been a couple years, so I can't wait to see what they have to say and offer to us in terms of accessibility for this year. I'm pretty excited.Dave: Is there anything in particular that stood out for you before we jump into it?Thomas: I know everybody in the community has been talking about the new voices, especially, Eloquence. But voices, I think that's probably the biggest hit out there to date. Would you agree with that?Dave: Yeah, I think so. I think it's definitely been the biggest news of this year's cycle, so yeah. Let's see what they have to say about that. Should we go ahead and jump into it?Thomas: Yeah. Let's do it.Dave: Sarah and Dean, you are so welcome back to the AppleVis Podcast. Thanks for coming.Dean: Thank you.Sarah: Well, thank you guys very much. It's wonderful to be here.Dave: Yeah, it's been two years, I think. We missed last year, but it was great. So it's great to have you back and talking about everything that's new in the accessibility world with Apple.Dean: Wow. Two years-Sarah: Yes. I-Dean: ... that's very quick.Sarah: I know. I was just thinking the same thing. It feels like the tumultuous nature of the last two years through a wrench into everything down to even doing podcasts. So it's great to be back with you guys.Dave: Absolutely. And I'm guessing this was probably the first WWDC this year at a few years where you actually had people as well.Sarah: It was, we had a hybrid model this year, but did kick it off with the keynote and the state of the union. And some of those major things, the design awards that go on on day one were done in a way to have more people available on campus. So it was a great opportunity to reconnect with a lot of developers and share the message of accessibility.Dave: Yeah. Amazing. And there is lots to talk about in accessibility. Thomas, I think you'd agree with me here that one of the biggest stories that's happened since voiceover itself even launched, all those…

Sean: You don't need to tell us the number, but how many months of your personal expense would that be before you finally threw in the towel? Dave: Yeah, it's a little different than that. The way I do things is I and I advocate this actually for people that are looking for yield and chasing opportunities, investment opportunities. I think that fundamentally when you chase investment opportunity, I think you're actually missing the boat. I think you're fundamentally potentially making the ultimate sin, which is trying to keep up with the Joneses. And I think trying to keep up with the Joneses is the most insidious thing you can do in your life. It's the thing that frankly contributes to, I think, the most unhappiness, because then it results in situations where no matter how much money or how much power or how much prestige you have, you're always worrying about what the Joneses are up to. You're always worried about, do they have more money than me? Are they more powerful than me? Are they more famous than me? Do they have more followers than me? And I think that fundamentally becomes a root of unhappiness. Dave: And I think that a lot of people, particularly on the investing side, get caught up in, 'hey, my buddy at the country club made 10x money or 100x money on some bitcoin investment. I should be doing the same thing.' Or 'my neighbor down the street was telling me about some stock he bought and that really chops me because like I should about that stock.' Right? So the way I think about the amount that you really need to retire and walk away is your personal cost of capital. And everyone's personal cost of capital is different. I happen to be in a situation where I actually grew up in poverty and I know what it's like to make $3.35 an hour cleaning toilets because that's what I did. I worked at Safeway and I was a bagger and I was a janitor making $3.35 an hour. Dave: And so I always thought about, okay, how much money do I need, Dave Liu, how much money do I need to live and what rate of return do I need to generate in order to hit my personal cost capital? And the reality is, for me, even though I was this big managing director and co-head of an industry group, I lived and continue to live a very modest life. I remember when many of my other managing directors were driving, you know, seven series, BMW, Mercedes, Ferraris, high-speed sports cars. I was driving around in a $20,000 Honda S2000, and many of my partners were making fun of me. Like, dude, like, what are you doing? Like, why don't you go buy a Lamborghini or a Ferrari? And I said, No, I don't want to. Because at some point I want to be able to walk away from this place and I want to make sure that I have a certain lifestyle that I can finance through a modest rate of return on my portfolio without having to work, without having to deal with the rat race. - - - Youtube: https://www.youtube.com/leadershipstack Join our community and ask questions here: from.sean.si/discord Facebook: https://www.facebook.com/leadershipstack

00:54 - Emily's Superpower: Being a Good Teacher * Greater Than Code Episode 261: Celebrating Computer Science Education with Dave Bock (https://www.greaterthancode.com/celebrating-computer-science-education) * CyberPatriot (https://www.uscyberpatriot.org/) 06:24 - Online College Courses vs In-Person Learning / Emily's Community College Path * Network Engineering (https://www.fieldengineer.com/blogs/what-is-network-engineer-definition) * Virginia Tech (https://vt.edu/) * Guaranteed Transfer Programs (https://blog.collegevine.com/an-introduction-to-guaranteed-transfer-programs/) * Loudoun Codes (http://loudouncodes.org/) * Emily Haggard: My Path to Virginia Tech (http://loudouncodes.org/2020/09/23/path_to_va_tech.html) 11:58 - Computer Science Curriculums * Technical Depth * The Missing Semester of Your CS Education (https://missing.csail.mit.edu/) 19:28 - Being A Good Mentor / Mentor, Student Relationships * Using Intuition * Putting Yourself in Others' Mindsets * Diversity and Focusing On Commonalities * Addressing Gatekeeping in Tech * Celebrating Accomplishments * Bragging Loudly * Grace Hopper Conference (https://ghc.anitab.org/) * Cultural Dynamics Spread 38:24 - Dungeons & Dragons (https://dnd.wizards.com/) * Characters as an Extensions of Players Reflections: Dave: College is what you make of it, not where you went. Arty: Teaching people better who don't have a lot of experience yet. Mandy: “Empowered women, empower women.” Empowered men also empower women. Emily: Your mentor should have different skills from you and you should seek them out for that reason. This episode was brought to you by @therubyrep (https://twitter.com/therubyrep) of DevReps, LLC (http://www.devreps.com/). To pledge your support and to join our awesome Slack community, visit patreon.com/greaterthancode (https://www.patreon.com/greaterthancode) To make a one-time donation so that we can continue to bring you more content and transcripts like this, please do so at paypal.me/devreps (https://www.paypal.me/devreps). You will also get an invitation to our Slack community this way as well. Transcript: MANDY: Hey, everybody! Welcome to Episode 265 of Greater Than Code. My name is Mandy Moore and I'm here with our guest panelist, Dave Bock. DAVE: Hi, I'm David Bock and I am here with our usual co-host, Arty Starr. ARTY: Thank you, Dave. And I'm here today with our guest, Emily Haggard. Emily is graduating from Virginia Tech with a Bachelor's in Computer Science this past December so, congratulations. She has a wide variety of experience in technology from web development to kernel programming, and even network engineering and cybersecurity. She is an active member of her community, having founded a cybersecurity club for middle schoolers. In her free time, she enjoys playing Dungeons and Dragons and writing novels. Welcome to the show, Emily. EMILY: Thank you. ARTY: So our first question we always ask is what is your superpower and how did you acquire it? EMILY: So I spent some time thinking about this and I would say that my superpower is that I'm a good teacher and what that means is that the people who come to me with questions wanting to learn something number one, my goal is to help them understand and number two, I think it's very important to make sure that whatever gap we have in our experience doesn't matter and that they don't feel that. So that they could be my 6-year-old brother and I'm trying to teach him algebra, or something and he doesn't feel like he is the 6-year-old trying to learn algebra. DAVE: I'll echo that sentiment about being a good teacher actually on two fronts, Emily. First of all, I am teaching your brother now in high school and just the other day, he credited you towards giving him a lot of background knowledge about the course and the curriculum before we ever started the class. So he seconds that you're a good teacher. And then listeners might remember, I was on a few weeks ago talking about my nonprofit and Emily was there at the beginning of me starting to volunteer in high schools. In fact, the way I met Emily, it was the fall of 2014. The first time I was volunteering at Loudoun Valley High School and one morning prior to class, there was going to be a meeting of a cybersecurity club. There were a bunch to the students milling about and there was this sophomore girl sitting in front of a computer, looking at a PowerPoint presentation of networking IP addresses, how the /24 of an IP address resolves and just all that kind of detail. Like very low-level detail about networking stuff and I was like, “Oh, that's interesting.” I wouldn't have expected a sophomore girl to be so interested in the low-level type of details of IP. And then the club started and she got up and started giving that presentation. That was not a slide deck she was reading; it was a slide deck she was creating. EMILY: Thank you. I actually remember that. [laughs] ARTY: So how did you acquire that superpower? EMILY: I think it was out of necessity. So going back to the story that David mentioned in high school, there was a cybersecurity competition called CyberPatriot that I competed in with friends and one year, all of a sudden, they just introduced network engineering to the competition. We had to configure and troubleshoot a simulated network and no one knew how to do that. So I took it upon myself to just figure it out so that my team could be competitive and win, but then part of the way that I learn actually is being able to teach something like that's how I grasp. I know that I've understood something and I'm ready to move on to the next topic is like, if I could teach this thing. So actually, I started out building all of that as a way to kind of condense my notes and condense my knowledge so that it'd stick in my head for the competition and I just realized it's already here, I should share this. So that's how I started there. Teaching network engineering to high schoolers that don't have any background knowledge is really hard. It forced me to put it in terms that would make sense and take away the really technical aspects of it and I think that built the teaching skill. DAVE: That relates to the club you started at the middle school for a CyberPatriot. How did that start? EMILY: That was initially a desire to have a capstone project and get out of high school a few weeks early. But I was sitting there with my friend and thinking about, “Okay, well, we need to do something that actually helps people. What should we do?” Like some people are going out and they're painting murals in schools, or gardening. It was like, well, we don't really like being outside and we're not really artistic. [chuckles] But what we do have is a lot of technical knowledge from all this work with CyberPatriot and we know that CyberPatriot has a middle school competition. So we actually approached the middle school. We had a sit down with, I think the dean at our local middle school. We talked about what CyberPatriot was and what we wanted to do with the students, which was have them bust over to the high school so we could teach them as an afterschool program. I guess we convinced him and so, a couple months later they're busing students over for us to teach. DAVE: Wow. And did they ever participate in competitions as middle schoolers? EMILY: Yes, they did. DAVE: Very cool. EMILY: Yeah. DAVE: Can you go into what those competitions are like? I don't think most of the audience even knows that exists. EMILY: Yeah, sure. So CyberPatriot, it's a cybersecurity competition for predominantly high schoolers that's run by the Air Force and you have a couple rounds throughout the year, I think it's like five, or so, and at each round you have 6 hours and you're given some virtual machines, which you have to secure and remove viruses from and things, and you get points for doing all of that. They added on network simulation, which was with some Cisco proprietary software, which would simulate your routers, your firewalls, and everything. So you'd have to configure and troubleshoot that as well and you would get points for the same thing. It builds a lot of comradery with all of us having to sit there for 6 hours after school and like, we're getting tired. It's a Friday night, everyone's a little bit loopy and all we've eaten is pizza for 6 hours. [laughs] DAVE: Well, that's a good jumpstart to your career, I think. [laughs] EMILY: Yes, for sure. MANDY: So while in college, I'm guessing that – well, I'm assuming that you've been pretty impacted by COVID and doing in-person learning versus online learning. How's that been for you? EMILY: I've actually found it pushes me to challenge the status quo. Online college classes, for the most part, the lectures aren't that helpful. They're not that great. So I had to pick up a lot of skills, like learning to teach myself, reading books, and figuring out ways to discern if I needed to research something further, if I really understood it yet, or not. That's a really hard question to ask actually is if you don't have the knowledge, how do you know that you don't have that knowledge? That's something I kind of had – it's a skill that you have to work on. So that is something I developed over the time when we were online and I've actually also done – I worked time for a year after high school and I took mostly online classes at the community college. Those skills started there, too and then I just built on them when I came to Virginia Tech and we had COVID happen. DAVE: Actually, I'd like to ask about that community college time. I know you had an interesting path into Virginia Tech, one that I'm really interested in for my own kids as well. Can you talk about that? EMILY: Yeah. So I, out of high school, always thought I'm going to – I'm a first-generation student. My parents did not go to college. They went to the military and grandparents before them. So I had always had it in my head that I am going to go and get that 4-year degree. That's what I want for myself. At the end of high school, I applied to Virginia Tech. I had a dream school. I wanted to go to Georgia Tech. They rejected me. Oh, well, that dream shot. I need to find something new. So I applied to Virginia Tech thinking it was going to be a safe bet. It's an in-state school, I was a very good student; they would never reject me and so, I applied for the engineering program and I was rejected. They did admit me for the neuroscience program, but it wasn't going to be what I wanted and I was realizing that I did not like either chemistry, or biology, so that would never work. And then at the same time, because of my work with CyberPatriot, I was able to get an internship in network engineering at a college not too far from where I lived. After I graduated high school, they offered me a job as a network engineer, which I took because my team was fantastic, I really liked my manager, and I was comfortable there. I took this job and I said, “Okay, I'm going to keep working on the college thing because it's what I always wanted for myself.” So I just signed up for community college and that was pretty tough working a full-time and doing community college until 11 o'clock at night and getting up the next day and doing it all over again. And from there, I decided that Virginia Tech was going to be the best option for me, just from a very logical perspective. I kind of thought Virginia Tech was a bit cult-y. I was never really gung-ho about going, but it made the most sense being an in-state school that's very well-known. I worked through community college and I applied to Virginia Tech again after 1 year at community college and they rejected me again. so I was like, “Oh no, now what do I do I?” And I realized I needed to make use of the guaranteed transfer program. One of the really cool things in Virginia at least is that a lot of the state schools have agreements with the community college, where if you get an associates with a specific GPA, you can transfer into that program and the university and your transfer's guaranteed, they can't reject you. So I was like, “Aha, they can't get rid of me this time.” Yeah, I did it and it's kind of a messy process. I actually went into that in a blog post on David has a nonprofit called Loudoun Codes. I wrote a blog post for his website and detailed that entire – being a transfer student is hard because there's a lot of credits that may not get transferred over because Virginia Tech is a little bit – all 4-year colleges are a little bit elitist in their attitude towards community college and they didn't take some of the credits that I had, which put me behind quite far, even though I had that knowledge, they said I didn't. So that added on some extra time and some extra summer semesters while I was at Tech. ARTY: Yeah. I did something similar with doing community college and then what you're talking about with the whole elitist attitude with the transfer and having a whole bunch of your credits not transferring and I'm definitely familiar with that whole experience. DAVE: Yeah. EMILY: And even now that I think about it, I remember community college, too. It's built for one specific type of student, which is great. I think they're really good at helping people who just weren't present, or weren't able to do the work and make the progress in high school. They're really good at helping those types of students. But as someone who did a whole bunch of AP classes, had a crazy GPA, they just didn't really know how to handle me. They said, “Okay, you've tested out of pretty much all of our math classes, but you are still lacking some credits.” So I had to take multi-variable calculus in community college in order to get credit to replace the fact that I tested out of pre-cal and which was kind of silly, but in the long run, it was great because I hear multi-variable calculus at Tech is pretty hard. But definitely, there's a lot of bureaucratic nonsense about college. Education is important. It's great. I've learned a lot of things, but there's still all these old ways of thinking and people are just not ready for change in college a lot of the time. The people who make decisions that is. DAVE: Well, I'd like to ask a little bit about the computer science curriculum that you've had and the angle I'm asking from when I worked at LivingSocial, I worked with one of the first group of people that had graduated from our bootcamp program and had transferred from other careers, spent 12 weeks learning software engineering skills, and then were integrated with a group of software engineers at LivingSocial. We would occasionally get into conversations about, well, if I learned to be a software engineer in 12 weeks, what do you learn in 4 years of college? So we started to do these internal brown bags that were kind of the Discovery Channel version of computer science. A lot of that material I've since recycled into the presentations I do at high school. But for your typical person who might have sidelined into this career from a different perspective, what's been your curriculum like? EMILY: I really like the parts of the curriculum that had technical depth because coming into it at my level, that's what I was lacking in certain areas. I had built the foundation really strong, but the details of it, I didn't have. The classes that Virginia Tech, like the notorious systems class and a cybersecurity class I have taken this semester, that have gone in detail with technology and pushed what I understood, those were my most valuable classes. There was a lot of it that I would've been happy without [laughs] because I'm not sure it will apply so much to my life going forward. I'm a very practical person. Engineer mindset; I don't want to worry about things that can actually be applied to the real world so much. So for me this semester, actually, it's been really challenging because I've taken a data structures and algorithms class where we're talking about NP complete versus NP hard, and what it would mean if we could solve an NP complete problem in polynomial time. It's really hard to care. It's really hard to see how that [laughs] helps. It's interesting from a pure math perspective, but coming into it as someone who was already in the adult world and very grounded, it feels like bloat. DAVE: Yeah. That stuff is interesting if you're are designing databases, but most of us are just using databases and that – [overtalk] EMILY: Right. DAVE: Stuff is all kind of baked in. EMILY: Yeah. DAVE: For the average person on a technical career path, we're far more interested in the business problems than the math problems. ARTY: I'm curious, too. There's also lots of stuff that seems like it's missing in college curriculum from just really fundamental things that you need to know as a software engineer. So did you have things like source control and continuous integration? I think back to my own college experience and I didn't learn about source control until I got out of college. [laughs] And why is that? Why is that? It seems so backwards because there's these fundamental things that we need to learn and within 4 years, can we not somehow get that in the curriculum? I'm wondering what your experience has been like. EMILY: So Virginia Tech, I think the CS department head is actually really good at being reflective because he requires every senior to take a seminar class as they exit. It's a one credit class; it's mostly just feedback for the school and I think it's really cool because he asks all of us to make a presentation, just record ourselves talking over some slides about our experience and the things we would change. That really impressed me that this guy who gets to make so many decisions is listening to the people who are just kind of peons of the system and what I said was that there are certain classes that they give background knowledge. Like there's one in particular where it's essentially the closest crossover we have with the electrical engineering department and it's really painful, as someone who works with software, to try and put myself in a hardware mindset working with AND gates, OR gates, and all that, and trying to deal with these simulated chips. It's awful and then it never comes back. We never talk about again in the curriculum and it's a prerequisite for the systems class, which has nothing at all to do with that, really. This segues into another thing. I've had an internship while I've been at Virginia Tech that's a web consultant role, or a development consultant role with a company called Acceleration. They run just a small office in Blacksburg and they have a really cool business model. They take students at Virginia Tech and at Radford, a neighboring school, and they have us work with clients on real software development projects. They pair us with mentors who have 5, 10 years of experiences, software consultants, and we get to learn all those things that school doesn't teach us. So that's actually how I learned Git, Scrum, and all that stuff that isn't taught in college even now and I went back to the CS department head and I said, “Replace that class with the class that teaches us Git, Scrum, Kanban, and even just a brief overview of Docker, AWS, and the concepts so that people have a foundation when they try to go to work and they're trying to read all this documentation, or they're asked to build a container image and they have no idea what it's talking about, or what it's for.” Yeah, going back to the original question, no, I didn't learn version control in college, but the weird thing is that I was expected to know it in my classes without ever being taught it because, especially in the upper level like 3,004 level, or 1,000 level classes, they have you work on group projects where Git is essential and some of them, especially the capstone project, are long-term projects and you really need to use Scrum, or use some sort of methodology rather than just the how you would treat a two-week project. Actually, it's interesting because David was my sponsor on my capstone project in college and he really helped my team with the whole project planning, sprint planning, and just understanding how Scrum and all that works and what it's for. DAVE: Yeah. I just shared a link that is a series of videos from MIT called The Missing Semester of Your Computer Science Education that talks about Git, version control and command line, using the back shell, stuff about using a database, how to use a debugger; just all that kind of stuff is stuff that you're expected to know, but never formally taught. ARTY: What about unit testing? EMILY: Okay. So that's an interesting exception to the rule, but I don't think they really carried it through, through my entire experience at Tech. So in the earlier classes, we were actually forced to write unit tests that was part of our assignments and they would look to see that we had – I think we had to have a 100% testing coverage, or very close to it. So that was good, but then it kind of dropped away as we went to the upper-level classes and you just had to be a good programmer and you had to know to test small chunks of your code because we'd have these massive projects and there would be a testing framework to see if the entire thing worked, but there was no unit testing, really. Whereas, at work in my internship, unit tests are paramount, like [laughs], we put a huge emphasis on that. ARTY: So earlier Emily, you had had mentioned teaching people that had no experience at all and the challenge of trying to be able to help and support people and learning to understand regardless of what their gap was in existing experience. So what are some of the ideas, principles, things that you've learned on how to do that effectively? EMILY: That's a really tough question because I've worked on building intuition rather than a set of rules. But I think a few of the major things probably are thinking about it long enough beforehand, because there's always a lot of background context that they need. Usually, you don't present a solution before you've presented the problem and so, it's important to spend time thinking about that and especially how you're going to order concepts. I've noticed, too with some of the best teachers I've had in college is they were very careful with the order in which they introduced topics to build the necessary context and that's something that's really important with complete beginners. The thing is sometimes you have to build that context very quickly, which the best trick I have for that is just to create an analogy that has nothing to do with technology at all, create it out of a shared experience that you have, or something that they've probably experienced. Like a lot of times analogies for IP addressing use the mailing service, houses on a street and things like that, things that are common to our experience. I guess, maybe that's the foundation of it is you're trying to figure out what you have in common with this person that can take them from where they are to where you are currently and that requires a lot of social skills, intuition, and practice, so. DAVE: That's a really good observation because one of the things I find teaching high school, and this has been a skill I've had to learn, is being able to put my mindset in the point of view of the student that I need to go to where they are and use a good metaphor analogy to bring them up a step. That's a real challenge to be able to strip away all the knowledge I have and be like, “Oh, this must be the understanding of the problem they have” and try to figure out how to walk them forward. EMILY: Yeah. DAVE: That's a valuable skill. EMILY: I think that's really rewarding, though because when I see in their eyes that they've understood it, or I watch them solve the problem, then I know that I did it well and that's really rewarding. It's like, okay, cool. I got them to where I wanted them to be. ARTY: Reminds me. I was helping out mentoring college students for a while and I hadn't really been involved with college for a really long time. I was working with folks that knew very, very little and it was just astounding to me one, just realizing how much I actually knew. That's easy to take for granted. But also, just that if you can dial back and be patient, it's really rewarding I found to just be able to help people, to see that little light go on where they start connecting the dots and they're able to make something appear on the screen for the first time. That experience of “I made that! I made that happen.” I feel like that's one of the most exciting things about software and in programming is that experience of being able to create and make something come to life in that way. Just mentoring as an experience is something, I think is valuable in a lot of ways beyond just the immediate being able to help someone things, like it's a cool experience being a mentor as well. EMILY: And I think it's really important, too as a mentor to have good mentors yourself. I was really lucky to have David just show up in my high school one day [laughs] and I've been really lucky consistently with the mentors in my life. In my internship that I mentioned, I worked with fantastic engineers who are really good teachers. It's difficult to figure out how to good teacher without having first had good teachers yourself and regardless of the level of experience I have, I think I will always want to have that mentor relationship so that I can keep learning. One of the things, too is a lot of my mentors are quite different from mine. Like I am a very quiet introvert person. I would not say I'm very charismatic. I would say David is the opposite of all those things. So wanting to build those skills myself, it's good to have a role model who has them. DAVE: Well, thank you for that compliment. EMILY: Yeah. MANDY: That's really interesting that you said to find mentor that's the opposite of yourself. I literally just heard the same thing said by a different person last week that was like, “Yeah, you should totally find someone who you want to be, or emulate,” and I thought that was really good advice. EMILY: I agree with that completely. There's a lot of conversation around diversity in computer science and that's definitely a problem. Women do not have the representation they should, like I've always gone through classes and been 1 of 3 women in the class. [chuckles] But I think one of the ways in which we can approach this, besides just increasing the enrollment number, is focusing on commonalities—kind of what I mentioned before— from the perspective of mentors who are different than their students. Maybe a male mentor trying to mentor a female student. Focusing on your commonalities rather than naturally gravitating towards people who are like you; trying to find commonalities with people who are different from you. I think that's important. From the student perspective, it's less about finding commonalities more about, like you said, finding the things you want to emulate. Looking at other groups of people and figuring out what they're good at and what things you would like to take from them. [laughs] So. DAVE: Yeah, that's been an interesting challenge I've noticed in the school system is that in the elementary school years, boys and girls are equally competent and interested in this material. By the time they get to high school, we have that 70/30 split of males versus females. In the middle school, the numbers are all over place, but in the formal classes, it seems to be at 70/30 split by 7th grade and I can't really find any single root cause that causes that. Unfortunately, I think I saw some stuff this week with Computer Science Education Week where students as young as first grade are working with small robots in small groups and there always seems to be the extrovert boy that is like, “It's a robot. I'm going to be the one that plays with it,” and he gatekeeps access to girls who are like, “It's my turn.” It's really discouraging to see that behavior ingrained at such a young age. Any attempt I try to address it at the high school level – well, not any attempt, but I feel like a lot of times I can come off as the creepy old guy trying to encourage high school age girls to be more interested in computer science. It's a hard place for me to be. EMILY: Yeah. I don't think you're the creepy old guy. [laughter] I think this is a larger topic in society right now is it's ingrained in women to be meek and to not be as confident, and that's really hard to overcome. That sounds terrible. I don't think people consciously do that all the time. I don't think men are consciously trying to speak over women all the time, but it it's definitely happened to me all over the place—it's happened at work, it's happened in interviews. I think getting over that is definitely really tough, but some of the things that have helped me are to see and celebrate women's accomplishments. Like every time I hear about Grace Hopper, it makes me so happy. I know one time in high school, David took a few other female students and I to a celebration of women's accomplishments and the whole thing, there were male allies there, but the topic of the night was women bragging loudly about the things that they've accomplished. Because that's not something that's encouraged for us to do, but it's something that it builds our confidence and also changes how other people see us. Because the thing is, it's easy to brag and it's saddening that people will just implicitly believe that the more you say you did. So the more frequently you brag about how smart you are, the more inclined people are to believe it because we're pretty suggestible as humans. When women don't do that, that subtly over time changes the perspective of us. We have to, very intently – I can't think of a word I'm trying to say, but be very intentional about bragging about ourselves regardless of how uncomfortable it is, regardless of whether we think we deserve it, or not. MANDY: I also think it's really important for women to also amplify other women, like empowered women empower women. So when we step up and say, “Look at this thing Emily did, isn't that cool?” EMILY: Yeah. MANDY: That's something that we should be doing to highlight and amplify others' accomplishments. EMILY: For sure. I've been to the Grace Hopper conference virtually because it was during COVID times, but that was a huge component of it was there would be these networking circles where women just talk about the amazing things that they've done and you just meet all these strangers who have done really cool things. It goes in both directions, like you said, you get to raise them up and also be encouraged yourself and have something to look forward to. ARTY: It sounds like just being exposed to that culture was a powerful experience for you. EMILY: For sure. ARTY: I was thinking about our conversation earlier about role models and finding someone to look up to that you're like, “You're a really cool person. I admire you.” Having strong women as role models makes it much easier for us to operate a certain way when we interact with other people, and stay solid within ourself and confident within ourself and not cave in. When all the examples around us of women are backing off, caving in, and just being submissive in the way that they interact with the world, those are the sort of patterns we pick up and learn. Likewise, the mixed gender conversations and things that happen. We pick up on those play of dynamics, the things that we see, and if we have strong role models, then it helps us shift those other conversations. So if we have exp more experience with these things, like the Grace Hopper conference and being able to go into these other that have a culture built around strong women and supporting being a strong woman, then you can take some of those things back with you in these other environments and then also be a role model for others. Because people see you being strong and standing up for yourself, being confident and they might have the same reaction to you of like, “Wow, I really admire her. She's really cool.” And then they start to emulate those things too. So these cultural dynamics, they spread and it's this subconscious spreading thing that happens. But maybe if we can get more experiences in these positive environments, we can iteratively take some of those things back with us and influence our other environments that, that maybe aren't so healthy. EMILY: Yeah. I agree. And I think also, it's important to be honest and open about where you started because it's easy, if you're a really confident woman walking into the room, for people to think you've always been that way. I think it's important to tell the stories about when you weren't, because that's how other people are going to connect with you and see a path forward for themselves. Definitely. I'll start by telling a story. I think it's just a million small experiences. I was a strong student in high school. I was very good at math. We had study halls where we'd sit in the auditorium and we'd all be doing homework, and students would often go to the guy in my math class who knew less than I did and ask for help. I would just sit there and listen to him poorly help the other students and mostly just brag about himself, and just be quiet and think about how angry it made me, but not really be able to speak up, or say anything. I'm very different now. Because of the exposure that I've had, I am much more quick to shut that down and to give a different perspective when someone's acting that way. MANDY: But how cool would it have been if that guy would've been like, “Don't ask me, ask Emily”? DAVE: That's a really important point because I hear women talk about this problem all the time and I don't think the solution is a 100% in the women's hands. I think that it's men in the room. My own personal experience, most of my career has been spent in government contracting space and, in that space, the percentage of women to men is much higher. It's still not great, but I think there's a better attempt at inclusion during recruiting. I think that there's a lot of just forces in that environment that are more amenable to that as a career path for women. And then when I started consultancy with my two business partners, Kim and Karen, that was an unheard-of thing that I had two women business partners and at the time we started it, I didn't think it was that big of a deal at all. But then we were suddenly in the commercial space and people thought it was some scam I was running to be a minority owned company and my partner was my wife, or I'd go into a meeting and somebody thought I brought a secretary and I was like, “No, she's an engineer and she's good, if not better than me.” It opened my eyes to the assumptions that people make about what the consulting rates even should be for men versus women and it's in that environment I learned that I had to speak up. I had to represent to be a solution to that problem. I think you can get in an argument with other guys where they aren't even convinced there's a problem to solve. They'll start talking about, “Oh, well, women just aren't as interested in this career path.” It's like, I've known plenty that are and end up leaving. EMILY: I think definitely having support from both sides has been really important because it is typically men in places of authority and to have them be encouraging and not necessarily forcing you into the spotlight, but definitely trying to raise you up and encourage you to speak out means a lot. ARTY: Yeah. I found most of the teams I've been on, I was the only woman on the team, or one of two maybe and early on, when nobody knows you, people make a lot of assumptions about things. The typical thing I've seen happen is when you've got a woman programmer is often, the bit is flipped pretty early on of that oh, she doesn't know what she's doing and stuff, we don't need to listen to what she says kind of thing and then it becomes those initial conversations and how things are framed, tend to affect a lot of how the relationships on the team are moving forward. One of the things that I learn as just an adaptive thing is I was really smart. So what I do, the first thing on the team I'd find out what the hardest problem was, that none of the guys could solve and figure it out, and then I would go after that one. My first thing on the team, I would go and tackle the hardest thing. I found that once you kick the ass of the biggest baddy on the yard, respect. [laughter] So I ended up not having problems moving forward and that the guys would be more submissive toward me, even as opposed to the other way around. But it's like you come into a culture that is dominated by certain ways of thinking in this masculine hierarchy, alpha male thing going on and if that's the dominant culture, you have to learn to play that game and stake yourself in that game. Generally speaking, in this engineering world, intelligence is fairly respected. So I've at least found that that's been a way for me to operate and be able to reset that playing field anyway. MID-ROLL: This episode is supported by Compiler, an original podcast from Red Hat discussing tech topics big, small, and strange. Compiler unravels industry topics, trends, and the things you've always wanted to know about tech, through interviews with the people who know it best. On their show, you will hear a chorus of perspectives from the diverse communities behind the code. Compiler brings together a curious team of Red Hatters to tackle big questions in tech like, what is technical debt? What are tech hiring managers actually looking for? And do you have to know how to code to get started in open source? I checked out the “Should Managers Code?” episode of Compiler, and I thought it was interesting how the hosts spoke with Red Hatters who are vocal about what role, if any, that managers should have in code bases—and why they often fight to keep their hands on keys for as long as they can. Listen to Compiler on Apple Podcasts, or anywhere you listen to podcasts. We'll also include a link in the show notes. Our thanks to Compiler for their support. ARTY: Well, speaking of games, Arty, one of the things that Emily mentions in her bio is playing Dungeons and Dragons and this is an area where as well as I know Emily from her high school years, this is not something I know much about Emily at all. So I'd like to talk about that. Play, or DM, Emily? EMILY: Both. But I really enjoy DMing because it's all about creating problems to solve, in my opinion, like you throw out a bunch of story threads. The way I approach things is I try actually, unlike a lot of DMs, I do not do a lot of world building for places my players haven't been. I pretty much, there are bright light at the center of the world and anything the light doesn't touch doesn't exist. I haven't written it and I don't really look at it that often. So I'm constantly throwing out story threads to try and see what they latch onto and I'll dive into their character backstory to see what they are more predisposed to be interested in. It's like writing a weekly web comic. You don't have necessarily a set beginning and end and you don't really know where you're going to end up in between, but you end up with all these cool threads and you can tie them together in new and interesting ways. Just seeing the connections between those and being able to change what you want something to be on the fly is really cool and just very stimulating mentally for me. So it's like a puzzle exercise the whole time and it is also an interesting social exercise because you're trying to balance the needs of each person. I feel like D&D allows you to know people on a really deep level, because a lot of times, our characters are just – that we're playing. I guess, I didn't really explain what D&D is; I just made an assumption that people would know. It's a tabletop role playing game where you make a character. You're usually heroic and you're going about on this adventure trying to help people solve problems and these characters tend to be just naturally an extension of ourselves. So you get to see all the things that subconsciously the person doesn't real about themselves, but that show up in their character. I think that's really cool. DAVE: So do you have a weekly game, or how often do you play? EMILY: I try to run a weekly game. College often gets in the way. [laughs] DAVE: How many players? EMILY: It ranges from 3 to 4, sometimes 5. It's really cool because it's also, most of them are people that I met during the pandemic. So we've played predominantly online and this is the way we've gotten to know each other. We've become really close in the year, or so since we started playing together through the game that I DM and through the game that one other person in the group DMs and it's cool. It's definitely a way to kind of transcend the boundaries of Zoom and of video calls in general. DAVE: Hmm. ARTY: How did you end up getting into that? EMILY: It was just a friend group in high school. Someone said, “Hey, I would like to run a Dungeon and Dragons game. Do you want to play?” And I said, “Oh, what's that?” I've always loved books and reading so it was kind of a natural progression to go from reading a story to making a story collaboratively with other people. So that just immediately, I had a connection with it and I loved the game and that's been a huge part of my hobbies and my outside of tech life ever since. DAVE: Yeah. I played D&D as a kid in the late 70s, early 80s, but my mom took all my stuff away from me when that Tom Hanks movie came out that started the whole Satan panic thing. So I didn't play for a long time until my own kids were interested after getting hooked on Magic. Seeing my own kids interested in D&D, the story building, the writing, the math that they had to do, like I don't know why any parent wouldn't encourage their kids to play this game. It's just phenomenal. The collaborative, creative, sharing, math; it's got everything. EMILY: Yeah. I'm an introverted person so it takes a lot to make me feel motivated to be in a group with other people consistently, but D&D does that and it does it in a way that's not, I guess, prohibitive to people who are naturally shy. Because you're pretending to be someone else and you're not necessarily having to totally be yourself and you're able to explore the world through a lens that you find comfortable. DAVE: That's really cool. EMILY: I guess, also, it kind of goes back to our conversation about teaching. Being a DM, a lot of my players are people who have not played before, or very, very new. Like, maybe they've read a lot about it, maybe they've watched them [43:18] shows, but they maybe haven't necessarily played. D&D does require a lot of math and there's a lot of optimization, like you can get very into the weeds with your character sheet trying to make the most efficient battle machine, whatever and that's not really always approachable. Especially when I started introducing my younger siblings to D&D, I used versions, D&D like games that were similar, but not quite D&D. Like less math, a very similar amplified character sheets so you're looking at fewer numbers, or fewer calculations involved just to kind of get the essence, because there's a few core concepts in D&D. You have six statistics about your character that they change a little bit between different types of role-playing games, but they're pretty universal, I think for the most part. It's constitution, strength, dexterity, wisdom, intelligence, and charisma. Once you kind of nail those concepts down and once a person understands what those skills are supposed to mean, that really opens the gates to understanding a lot more about the core mechanics of D&D outside of the spell casting stuff and all the other math that's involved. I think just simplifying the game down to that makes them fall in love with the narrative and collaborative aspect of the game, and then be more motivated to figure out the math, if they weren't already predisposed to that. DAVE: So if somebody were interested in picking up a game trying to figure it out, where would they start? EMILY: It really to depends on the age group. If you're going to play with high school students, I would definitely say if none of you have played before, then pick up a player's handbook, maybe a dungeon master's guide if you're going to DM, you've never DM before because it gives a lot of tips for just dealing with the problems that arise in a collaborative storytelling game. And then probably just a prewritten module so you don't have to worry about building your own story, because these modules are stories that are written by professional game developers and you can take pieces of them and iterate it on yourself so you don't have to start with nothing. But if you are going for a much younger audience, I can't remember off the top of my head what it was, but it's essentially an animal adventure game. It's very much D&D without using the word D&D because I think it's a different company, it's copyrighted, and whatnot. But you have these little cute dog characters and they're trying to defeat an evil animal overlord who wants to ruin the town festival. It's very family friendly, like there's no death like there is in regular D&D and it's just a chance to engage with the character creation aspect of it. MANDY: That's really cool. So we're about heading towards our time, but I really appreciate you coming on the show, Emily and I wanted to just ask you, if you could give any advice to young girls looking to get into tech, or software engineering, what advice would you give them? EMILY: I think don't be afraid to walk off the path. A lot of my life has been kind of bucking the prewritten path that a lot of people are told is the best one because it didn't work for me, or whatever reason, and I think it's important just to not be afraid of that and to be courageous in making your own path. MANDY: That's great advice. So should we head into reflections, everyone? Who wants to start us off? DAVE: I'll start with one. I mentioned that when asked Emily about her path into college, that I was interested in a similar path for my own kids. I had a really strange college path that I started out a music major, ended up a computer science major, and had a non-traditional path. I've always believed that college is what you make of it, not where you went. Where you went might help you get your first job, but from then on, it's networking, it's personality, it's how well you did the job. Talking to Emily about her path, just reinforces that to me and helps me plot a path for what I might have my own children do. I have triplet boys that are in 9th grade. So we're starting to think about that path and not only would a path through Virginia Community College save us a fortune, [laughs] it would also be a guaranteed admission into Virginia Tech, or one of the Virginia schools so it's definitely something worth to consider. So I appreciate that knowledge, Emily. ARTY: I've been thinking a lot about how we can better teach people that don't have a lot of experience yet. We've got so much stuff going on in this field of software engineering and it's really easy to not realize how far that this plateau of knowledge that we live in and work with every day to do our jobs, and how important it is to bring up new folks that are trying to learn. One of the things you said, Emily was about teaching is being able to find those shared things where we've got a common understanding about something—you used metaphor of male delivery to talk about IP addresses, for example. But to be thinking in those ways of how do we find something shared and be able to get more involved with mentoring, reaching back, and helping support people to learn because software is super cool. It really is! We can build amazing, amazing things. It'd be awesome if more of us were able to get involved and have that experience and having good mentors, having good role models, all of those things make a big difference. MANDY: I just love the conversation that we had about men and women in technology and for me, I love to reiterate the fact that empowered women empower women and I even want to take that a step further by saying especially right now in our field, empowered men also empower women. So I think that that's something that really needs to be said and heard and not perceived as like Dave said oh, he felt like the creepy guy encouraging girls, or women to get involved in tech. I think it's cool. Dave has personally, he's mentored me. He's gotten me more interested. I used to do assistant work and now I'm learning programming and it's because I've been encouraged to do so by a lot of different men in the industry that I've been lucky to know. DAVE: Well, thank you, Mandy. You certainly have a who's who of mentors. MANDY: I am very, very lucky to know the people I know. DAVE: I'm quite honored to even be named on that list of people you know. [laughter] EMILY: I think the thought I keep coming back to is one that I've mentioned, but didn't really crystallize in my head until this morning when I was preparing for this recording is, I listened to David's interview and I thought about like, “Oh wow, he did really well on the podcast, all these things that I wish I did.” It really crystallized the idea that your mentor should be different from you and should have skills you don't, and you should seek them out for that reason. Mentors tend to be the people that I run into and I haven't really thought about it that way before, but that gives me a different perspective to go out and intentionally seek out those people. That definitely gives some food for thought for me. [laughs] MANDY: I love intentionally seeking out people who are different from myself in general, just to learn and get perspectives that I might have never even thought of before. But with that, I guess we will wrap up. Emily, it's been so nice having you on the show. Congratulations and best of luck on your exams. I know being – [overtalk] DAVE: I can't believe you took the time to do this with your exams coming up. MANDY: I know! EMILY: I'm procrastinating as hard as I can. [laughter] MANDY: But it's been so nice to have you on the show. Dave, thank you for coming and being a guest panelist and Arty, it's always wonderful to host with you. So I just wish everybody a happy new year and we'll see you next week! Special Guests: Dave Bock and Emily Haggard.

As designers or developers — even product makers — when WordPress is your hammer, everything looks like a nail. WordPress is certainly in an inflection point. Where as the software is evolving, read: gutenberg + fullsite editing, the community of users grapple with what WordPress really is. I feel like that's a statement which has lingered in the air for a few years now. When you unlock it's power of custom post types and fields with a dash of REST API magic, the CMS can become a neural network for your data. Yet with an interface that I struggle to drag a single block into the 3 column of my page layout. Today's guest has mastered the teachings of WordPress, specifically with Elementor for his students over the last few years but that usability struggle I mentioned earlier? Yeah…that's caused him to pivot his teachings to a hosted platform you may have heard of before on the show before — Webflow. Welcome today's guest Dave Foye, as he unpacks the challenges of not only learning a new CMS, but the challenges of designing a curriculum for new students seeking to become proficient in it. Episode transcript [00:00:00] Dave: switching tools is, is not for the faint-hearted, it's quite an expensive process, isn't it? In terms of well sunk cost in terms of what you've already. [00:00:08] Put into the amount of time and energy that you've put into learning tools that you've previously used. I also had have still, a multiple six figure a year business teaching WordPress teaching, very specific tools, WordPress and elements are, that combination elements or page builder. [00:00:25] Matt: This episode of the Matt report is brought to you by foo plug-ins or specifically foo plugins, foo gallery. You can find it@foo.gallery. There's a new pro commerce plan, and it gives you two way integration into WooCommerce. So if you want to sell photos, you can sell photos with foo.gallery and woo commerce. [00:00:47] It makes your job. Super easy, especially if you're a photographer. I just had family photos taken the other day and I looked at the big conglomerate website that my photographer sent me. He said, man, it would look so much better if you. Right through WooCommerce, especially if you use something like foo gallery, check out food, art gallery, and learn more about their pro commerce plan. [00:01:09] Check out their WooCommerce integration. They have a great way to watermark and protect your photo galleries. Check them out and thank them for sponsoring the show. It's food, art gallery go-to food art gallery today. Start selling images with foo gallery and. [00:01:27] As designers or developers, even product makers when WordPress is your hammer, everything looks like a nail. WordPress is certainly in an inflection point right now. Whereas the software is evolving Reed Gutenberg in full site, editing the community of users grapple with what WordPress really is. I feel like that's a statement which has lingered in the air for a few years. [00:01:50] When you unlock its power custom post types and fields with a dash of rest API magic, the CMS can become a neural network for your data yet with an interface that I struggle to drag and drop a single block into a third column of my page layout today's guest has mastered the teachings of WordPress specifically with Elementor for his students over the last few years. [00:02:12] But the usability struggle that I just met. Yeah, that's caused him to pivot his teachings to a hosted platform. You may have heard of before on the show web. Welcome today's guest Dave Foye, as he unpacks the challenges of not only learning a new CMS, but the challenges of devising a curriculum for new students seeking to become proficient in it. [00:02:34] You're listening to the Mer report, a podcast for the resilient digital business builder. If you'd like to support the show, please visit buy me a coffee.com/matt report. And buy me a digital coffee or joined the membership to jump into our private discord server with others. Chatting it up about the. [00:02:48] And greatest in our crazy WordPress world, that's buy me a coffee.com/maryport. And thanks to Fu plug-ins for supporting today's show. Check out food gallery food art gallery for more. Okay. [00:03:00] Here's my interview with Dave.  [00:03:01] Dave: I had a lot of resistance, a lot of inner resistance to partly because, switching tools is, is not for the faint-hearted, it's quite an expensive process, isn't it? In terms of well sunk cost in terms of what you've already. [00:03:15] Put into the amount of time and energy that you've put into learning tools that you've previously used. But I mean, I also had have still, but, I had at the time, like a multiple six figure a year business teaching WordPress teaching, very specific tools, WordPress and elements are, that combination elements or page builder. [00:03:35] And so it, it really was kind of. It, it, it was, it was a real kind of crunch time for me for thinking that I have got to the point where I cannot use these tools anymore. I'm finding that I actually I'm finding that. I'll talk about the details in a moment, but I can't in all conscience recommend this particular combination of tools that I am well-known for and, very well paid for I can't carry on. [00:04:05] So, believe me, it was quite a, quite a risk. I think I remember one of my students say, and I've mentioned it's something in, in the, in the little private Facebook group that I've got for one of my courses. And he just said career suicide. Nice. So, [00:04:23] Matt: for thanks for the vote of confidence. [00:04:25] Dave: Awesome. I mean, it, it probably had a point, you probably had a point  [00:04:29] Matt: What was that? Oh, just real quick. What was that concern for you to say? You know what, I don't feel like I can recommend these tools anymore. Was it more a, an ELA mentor thing? Was it more a WordPress thing? I mean, we're in this chaotic times where it's like, Gutenberg is still trying to get better full site editing's coming in. [00:04:48] You layer on the complexity of a piece of software that wants you to build a website a certain way? Are we just hitting a perfect storm here? Or was there something specific? [00:04:57] Dave: Yeah, possibly. Yeah. Yeah. Cause I had got to the point where I started, well, I've, I've been using WordPress since 2007, something like that, so for my own personal projects and my own client projects, I'd use WordPress for, for a good long time. It was when I actually decided to teach online. I long story, I think we've covered this plenty of times before, but for 10 years I was actually a school teacher. [00:05:23] I'm a, I am a qualified teacher, so I was a qualified teacher, teaching young children in the, in the UK. Like in the nineties and early two thousands. And I then got into web design and build up a great business, but it just decided that I just miss teaching so much. So for me, around 2016 ish, I decided I actually want to get back into teaching, but I want to teach the thing that I've been, I've been working with the web design tools that I'll be working with for, for, for many years, what, what a perfect combination. [00:05:54] So, I did a lot of research, long story, but I'd discovered elements or which was [00:06:00] just in its earliest stages at the time. And thought this combination of tools is brilliant for, for my target market. My target market is always non coders. People who don't want to code and probably feel a bit nervous about the prospect of. [00:06:14] Th they, they want to build websites, but web design technology, web design tools, web development, isn't something that is natural to them. It's not something that they are completely off-air with. And. So I always see my job as taking people who look at all this stuff and think, oh, wow, this is so complicated. [00:06:35] And possibly quite scary. It's my job to say, it's all fine. Just do this, this and this. And it all works out. So in a sense, I'd particularly chosen WordPress and elements or that particular combination, because it just seemed right for my target. Now over the gears, elements or has added on features and features and features WordPress itself, as you say, is changing dramatically. [00:07:02] I think ultimately that will be for the good of WordPress. Definitely. I know a lot of people complain about Gothenburg, but I think it is getting there, but it got to the point where I started to think would I in, in, in all kind of conscience, I suppose, would I, conscious now. Recommend to somebody who once frost-free hassle-free stress-free web design experience, where basically stuff just works. [00:07:30] All of the scary kind of hustle behind the scenes all the kind of configuration, all the. The, the stuff that people complain about WordPress, which is actually a strength at the same time, which is it's plugin plugin system, plugin architecture, but I'd got to the point where, for my own use of WordPress, but also just being sensitive to the needs of my students and the needs of the people who I work with day in, day out to help with this stuff. [00:08:01] I just saw massive frustration. Massive massive frustration with constant plugin updates, constant issues with plugins. It's not new in WordPress at all, obviously, but you know, updating plugins to find that something's broken, there's a conflict with something else, finding websites that now this is, I think, quite a bit of elemental issue cause they do, they have had a history of releasing some quite buggy releases in in more recently. [00:08:30] But you know, finding that a website that worked perfectly well, last time they logged in now, suddenly it doesn't work in, in some way there's some functionality broken or there's a, there's the layout that's suddenly off. Issues with hosting and all the RS, all manner of different things. It's kind of like that little drip, drip trip, the, the Chinese water torture, I think is called, the, the drip, drip, drip, drip of, of, of, of constant issues where I just thought there's, there's gotta be a better [00:09:00] way. [00:09:00] I know that, for instance, like I use Thinkific for my online course. And it's just all done for me. I can get on with actually creating courses, uploading the courses and teaching, there are, there are, I don't know, email marketing platforms where that the heavy lifting and the stuff that I don't need to know is done in the background so I can get on with my job. [00:09:22] And I started to think that there must be something better than this constant stress and worry and, and hustle. And maintenance and all of these other things, which is what led me to start looking at other possible or the solutions.  [00:09:39] Matt: I've seen the love, hate relationship with Gutenberg, how fast this piece of software has been iterated on. And just all the changes you couple that with ELA mentor, which is also on a rocket ship ride, they're growing, they're adding new features. They've hit a bout of turbulence, I guess is probably the nicest thing that I could say. [00:10:01] I know I've seen you and Paul on Twitter really hammering it home with element or for good reason. And they have to be conscious, I think, of element or they have the conscious of just not throwing the kitchen sink at everything for the sake of the kitchen sink.  [00:10:17] I feel like folks who are looking for a web flow solution understand that they should invest some money in a platform. That's just going to do it without the FOS updates, hosting issues. Incompatibilities with other plugins, like I will pay the, have that done on Webflow versus the WordPress side of it where it's like, man, there's so many variables that, that can be thrown at this. [00:10:46] Where are you getting that feedback from your audience?  [00:10:48] Dave: Yeah, it was it was, as I said, at the beginning, it was a very, very reluctant look looking for something else for very, very lots of, lots of reasons. I didn't want to be looking anywhere else. Yeah. Partly it was, it was my. And it was partly because of elements or boogie releases. So I got on with, for instance, I needed to build a new website for myself late last year, and they installed a new instance of WordPress and elements. [00:11:14] I was like, global colors just didn't work at all, just broken. And so, so w there were several issues like that just personally for myself, as it was like, oh, what, what is it now? There was not, and it's not just, it's not just elements or, I think. Lots and lots of other, other plugins as well, but let's, I'm probably focusing on elements are maybe a bit too much, but, but yeah, it certainly wasn't a good feeling from my audience and students by, by any means. [00:11:43] I mean, my, my group, I sort of private group was just every day there was just something of like, why isn't this working? Why is this thing broken now? Or it wasn't just necessarily as WordPress. It was like hosting as well, or. I think because. Because the, [00:12:00] because of the plugin architecture and there are plugins coming down the pipe every single day as you. [00:12:04] And I know constantly with, with new features and, potentially solving problems with SEO and page speed and everything else. So th th there were those issues with stuff just being broken and being hard. And, people struggling just to keep up with a frantic pace of change. I think that that was partly the thing, but I think also it was just, I think, yeah, just, just, I, I suppose people just I'm just trying to think of the best way to put it really. [00:12:33] Yeah, just, just gen general kind of anxiety about, about stuff being broken and stuff. Just not being easy, I think is the easiest way to put it. Yeah. [00:12:43] Matt: I want to ask you this question. This is going a little bit deeper in sort of like the creator in the, in the creator mindset, the, the business of being a creator and monetizing on, let's say YouTube and affiliate sales. It probably wasn't an easy decision to make either because one would imagine knowing what I did with affiliate sales, for elements. [00:13:06] Which was a flea on an elephant's ass, probably compared to what you and maybe others have done. It was probably a tough business decision to write, to be like, look, I'm making money. And I think you and Paul and, and, and the other folks that I communicate with on, on YouTube, you do affiliates. Right. I think of immediately when peoples think affiliates are like, oh, what are you trying to sell me? [00:13:29] What kind of cloaking device are you using on these, on these links? Like at one point in your, in your career, you're like, Elementor is a fantastic tool at this time. And they have an affiliate program. Why not recommend this and make money? It's a legit way when you're doing it a legit way. I don't have any other better way of saying that. [00:13:49] So I'd probably, at some point you were like, oh man, like I will be turning off this. Potentially of money. What was that like? And did you have, do you have any thoughts or feelings around affiliate sales and how this helps make the decision  [00:14:01] Dave: Yeah, well, I mean, affiliates, the affiliate business model was never ever my intention when I first started my thing was I'm going to sell courses and affiliate sales were have always just been a bit of a nice to have. When I first started my YouTube channel started making videos about this fairly brand new tool called elements or at the time I happened. [00:14:22] I mentioned my affiliate link. I think it just dropped it in the description. Sometimes I would, occasionally when elements I had an offer, I would let my email list know which was regrowing. My, my business model was growing my email list to sell courses in a nutshell. That's it. And it still is. Grow the email list to sell courses. [00:14:41] But thank goodness that I was an affiliate for elements or in those early days, because in the first kind of nine months of me getting to the point where I even had the confidence to make a course and to feel like I could sell it at all, we're going back to 2017 now, which seems so long [00:15:00] ago, it was only a few years, but yeah, the, the, the, the affiliate income from I was an affiliate for very, very few. [00:15:07] Elements or generate press. I don't know, maybe a hosting platform as well. Well, the income from that was better than I'd been making, working full-time as a web designer. And it absolutely saved my ass because if I hadn't have had that income I think the whole online course thing probably would have failed. [00:15:28] Now. I say that because I. Way too long to actually make a product and offer it to my, offer it to my audiences, to my MLS. So these days when I mentor and help people create products and make online courses, one of my first things is to say, is this a build. As a small and email list, as you can get away with find a hundred people and sell something, make something to sell. [00:15:55] It can be very low value, not low value, low, low price. It doesn't matter, but start making something and start selling something straight away, because it's only then that you can start getting true feedback about what people actually want, what they're prepared to pay for and where you? [00:16:11] should put your energies. [00:16:13] But yeah, the affiliate thing was, was massive, but. W my, the income of saying about, I'm not, I'm not saying it's a brag, but it's a multiple six figures a year. Business is mostly from courses. It's mostly from selling courses. I'd say 90% is from selling courses about WordPress and elemental, specifically about using those tools. [00:16:36] And yeah, to say that it's career suicide, there's the phrase, career suicide. [00:16:42] Matt: And you were, you were lucky enough to get to a point. Did you turn ads on, on your YouTube  [00:16:48] Dave: No, no, no, no. Never never had no, no, no,  [00:16:51] Matt: Just because you didn't want the experience or the user to have that experience of ads, or you were never looking at it  [00:16:59] Dave: I think, I think what I wanted to do was just to make sure. The foolishly probably, this is, this is not a savvy business head talking, but I think I just want to, just to make sure that when people watch my videos, that we're just not being interrupted by ads and, they could just actually enjoy the experience of, of watching the videos. [00:17:18] And I suspected that probably the income from that wasn't particularly going to be too great anyway. So I just always kept monitorization off for that reason. Really.  [00:17:27] Matt: My YouTube story is like, how do I get into this game? How do I create this content? And I quickly, but I don't say quickly, it took me six months to burn out, doing like three videos a week or maybe three or four videos a week. I had this ambitious goal of doing it like every day. And I just flatlined burned out. [00:17:46] I didn't literally didn't touch it for a year. And then all of a sudden. Ad sent, sent me the first check for a hundred bucks. Right. Then I logged in and it was, I had tripled my audience without uploading a video in a year, just because of SEO. [00:17:58] The light bulb went off. [00:18:00] Like you fool, you shouldn't have given up, you should have done it less. So you didn't burn yourself out, but you shouldn't have given up. And again, like life gets in the way YouTube stuff is so far away. My daily routine that I haven't uploaded episodes. And, but I still am making three or 400 bucks a month in ads. [00:18:19] And I have a lot of kids, so diapers are expensive. So I leave the ads on, but I, I, I can certainly, I can certainly see in your world where these bigger products, bigger prices, the brand, the value, there is a target for you to focus on. [00:18:34] Dave: Yeah. [00:18:35] definitely. Yeah. Yeah. I was the one that I think I wanted that sense of kind of trustworthiness. Yeah. just that experience. Really. I was not to say that people with ads, I watch, oh, I've got YouTube premium now, so I don't see any ads, but seeing ads on people's videos, I actually don't, I don't personally tie that into a decision that's made by the creator of the video at all. [00:18:55] It doesn't, I understand how it works as well, but I don't ever think, oh, they've, they've got ads turned on. They obviously don't care about my experiences as a viewer. It doesn't enter my head, so  [00:19:06] Matt: side note, I also signed up recently for premium, like late was finally one of those things where, you know, before you sign up for premium, every time you logged into YouTube, they'd be like, do premium, do premium, do premium. And I'm always like clothes, clothes, clothes. And I tell you, Dave, I am like, screw it. [00:19:23] I'm going to do it. Right. Like finally, you got me YouTube, literally a thousand pop-ups later is probably what my conversion metrics were. You finally got me and I signed up and I watched my first video with no ads. And I was like, wow,  [00:19:41] Dave: Yeah, well, consider the side.  [00:19:43] Matt: brain, because my brain was trained so much now with like their three pre-roll ads and then the, the pop-up in the middle of the banner and then like the mid roll. [00:19:53] And when I'm doing work for Casto, sometimes I'm in the Castle's account and I'm uploading my videos for Casos and I'll be watching something. And I'll be like, what is this ad? Like, my brain is like, what is this? Like, it was happening. And like, oh yeah, I'm not in my premium account. [00:20:08] Dave: It is awesome. I think it's. worth every single  [00:20:11] Matt: It is, it's. it is.  [00:20:13] Dave: Yeah, definitely.  [00:20:15] Matt: when I go on vacation with my children and recently w we're going to, we were in Florida and they're watching TV, cable, TV, and there's commercials. And my kids are literally asking me what dad, what is this? Why, why isn't the show playing? Because they're so used to Netflix and Disney plus. [00:20:33] Dave: Yeah.  [00:20:34] Matt: And they see a commercial and they are freaking out. They're like, what, what is a show? Where's the show? And I'm like, it's just a, it's a thing called commercial kids that you didn't grow up with. Welcome to my world.  [00:20:46] Dave: Oh, wow.  [00:20:46] Matt: All right. As we get into the back half of this conversation, web flow, did you, you said like, I want to find a platform that is easy, all encompassing. [00:20:59] Was Webflow [00:21:00] is in the back of your mind or did you start doing some homework and then you settled on Webflow? [00:21:04] Dave: Yeah, Well, I had, I'd actually been recommended Webflow several times over at least two years, probably more. And every time somebody said to me, you've got dude, you've got to check web flow out. And these were people that are trusted and respected friends of mine, colleagues, people all over the place. [00:21:19] And people who had never looked back, it would just adopted it for their agency as their go-to tool. And they moved from WordPress. And every single time somebody recommended it. I said, well, yeah, I've heard of that. I'll check it out. And then I would immediately toss the idea in the bin and think there is literally no way I am looking at any of the tools because I've got a lot of, as we've said, a lot invested in, in WordPress and everything. [00:21:44] So yeah. Yeah. So, so actually choosing Webflow. I, I had a little look around to see anything else. I obviously don't, didn't bother looking at the Squarespaces and the Wix and things like that. But yeah, the web flow was pretty much, pretty much the only one that I considered now, I actually tried it and gave up three times, like completely just thought, right, come on, come on. [00:22:07] You can do this. I mean, how hard can it be and gave up three times because it's not actually. It's not actually, it's not a beginner's platform. It's not designed for people who that, that Squarespace is designed for. You don't get a lot of pre pre-made designs and in fact, it's harder to use done. [00:22:26] I would say a WordPress page builder, probably not oxygen because oxygen is based very, very, very much on web flow as I understand. But yeah, it was, it was hard. And what I also found as well is. I well, partly so, so what would happen is I'd give it a try and think, oh no, no, no, no, no, no. I just, haven't got time. [00:22:46] I'll persevere with what I'm using. And it was the third time there was like the straw that broke the camel's back. I've got to figure this out. And in some ways it really appealed to me because when you start, well, we'll go into the details too much. But when you style anything in Webflow, you literally click on it. [00:23:04] A podcast doesn't make this a very good visual medium for me to explain this. But when you click on anything in web flow and you want to style it, it could be literally any element whatsoever. You give it a name, like a class, a, you give that class, whatever styles you like. You've got all the styles at your disposal, really easy, nice UI. [00:23:23] And then you just use that class on anything else that you want to give that, that that's those, those same styles. The sense of having literally on, con on limited global styling, not having to go to some separate styling panel somewhere to constantly kind of keep going back and sort of adjusting things. [00:23:46] And also not being out there, I suppose. Th the page, whatever the page builder developers decided the global styles are that you're going to have is what you're stuck with. You're limited by that. [00:24:00] Usually we web flow. You can just do what you like now as a, as an, actually like a dinosaur old school, HTML and CSS hand coder back in the day, this really appealed. [00:24:12] Because I used to write CSS and I'd have one single CSS file, which I could just create as many styles as I liked, and I could control them all from one place. So it was that particularly about web flow. That just super appealed to me, the lack of the lack of limits, really. I'm not being, I'm not being, I'm not being hampered by. [00:24:32] I mean, it's great. For instance, elements are just as an example, the whole load of widgets and know there are probably a million different third-party add-ons as well. It will all bring a load more widgets as well. And it is amazing. You can drag a widget on the screen, just onto the canvas. It just produces, your tabs or your, your posts Lao or whatever it is. [00:24:53] But you still fairly limited by the styling options that that developer has decided to give you where it was with Webflow is just completely open-ended. The problem, the problem it's like everything in life, concentrate offs. The problem with that beautiful open-endedness is that you can make a real mess. [00:25:14] If you're not careful, if you've not kind of got a system and a workflow and a, an a way that you decide that you're going to name classes and use them and reuse them, it can be a bit of a mess. And that's the issue that I hit immediately. The wet floor. The Webflow university, which is web flows own a free training is absolutely brilliant. [00:25:36] I mean, as, than, as an educator myself, as a teacher myself, I mean, I, I just think those videos are astounding. They're incredible. And I think it speaks volumes about a company like that who have invested so much time and energy into training their users. So that stuff was helpful. and it kinda got me got, definitely got me so far, but I was, I think because my teaching in WordPress and other mentor was all about, you've got all these tools, you've got all the colors in there, all the crayons in the box, but you need a system, you need a workflow, you need it. [00:26:16] You need, you need to set yourself limits. So. Yeah, you can produce sites really quickly, really productively, profitably and not have to think too much, you've got a system and you just do it and you just build them. So I, that was, that was the, that was the sticking point with Webflow. And it's what I ended up actually building a framework myself though. [00:26:36] There isn't anything really, there are web flow frameworks out there, but they all had issues for me. So I ended up building my own, [00:26:43] Matt: I've tried Webflow before. And me it's as much more of a like shiny object syndrome and a little bit of like this whole, like no code. Movement where it's like, I don't know. Sometimes I've thought of sat back and be like, man, if I could just have like a database that I use, like connected with Zapier [00:27:00] and I could like automate these things, I see all these other people do it, like in two seconds on the back of a napkin. [00:27:04] And I'm like, I want to do that too. And then like, I jumped into like web flow and I'm like, oh God, I don't know what the hell I'm doing. I'm just going to sound, I'm going away from this, this leads. And what I'm getting out of here is like, You tried it three times, whatever failed. And you're like, ah, somebody could just teach it my way you built it. [00:27:22] Right. You built the course to like, get people over that hump quite literally coming from WordPress to web flow. The name of your course is there a particular. Cut like a WordPress user or WordPress stack that somebody might be using. Who's like the perfect fit to, for your course number one, but for web flow, like certainly somebody who's us, I'm just a simple lowly WordPress blogger is probably not gonna need your course is probably not going to need web flow, but is there a certain, a certain avatar that is a perfect fit for your course, but for also to, to, to reap the benefits of web. [00:27:59] Dave: . I would say that people who I mean, if somebody is a WordPress developer, right? So we'll, we'll, we'll discount those people immediately, people are building their own themes and things like that then. Absolutely. Definitely not. I'm sure that WordPress gives you all of the, all of the control and the power and everything that you need. [00:28:14] So I would say more people who are trained to be. I'm trying to build full, fully functional websites using WordPress under page builder. I would say the people who definitely need a page builder of some kind. Now, when I'm in Gothenburg , is a page builder and it's developing fast as well. So I would say people who are using those tools particularly you, I, as I said, in a sense, web flow is a bit more complicated. [00:28:42] So it's, it's not just the. It is in some ways, but there isn't, the, the pre-built here is everything done for you. Aspect of quite a lot of the stuff that comes with a page builder. So there are certain things that you need to understand in the background. You need to understand what's going on. You need to understand a little bit about. [00:29:03] HTML and CSS as well. So just an, an understanding of just like how HTML interacts with CSS, just on a very basic level to understand things like inheritance, so when you set a style on the body, for instance, that is going to trickle down to everything underneath it, all the content and everything underneath it all, unless you override it. [00:29:26] So there are, there are concepts like that, that in a page builder, those people. I don't really even need to ever think about particularly, you can just eat just budge, something together quite, quite easily. I would say though that I, I do know of quite a lot of, of from end developers I suppose, backend developers as well, who really enjoy using web flow because it allows them to effectively write HTML and CSS without having to actually write HTML and CSS. [00:29:54] Cause like a graphical user interface for, for. Well, for me, [00:30:00] I am more than happy to recommend web flow to my audience, which are, as I said, non coders, they need a page builder and they're a little bit nervous about, all the multitude of different tools and, and, and things that they need to know. [00:30:15] Matt: I'm curious. I mean, I know the, as of, as of this time, which is September 17th at 11:30 AM Eastern standard time in new England, which is where we, we won't get into the  [00:30:28] Dave: I mean I'm in the old one.  [00:30:30] Matt: in the old one. You're in the original one. The, I know the course is not for sale yet. I'm curious. And I've seen it. [00:30:37] I think I've gone through the first two modules and, and, and, for the listener out there, like when Dave says he takes time, like it took me so long to do this. Yeah. But the quality is just mind blowing and I can't even imagine Dave, how much time you've spent on it. I don't, I don't know if you have a number of hours counted or if you even want to admit how long you've been into it. [00:30:57] I know it's not for sale yet. Do you, as of this recording, but maybe when we launch this recording do you anticipate. The some turbulence there. Right? So people in WordPress they're very much used to free or low cost web flows, paid the pain for your course. What are your thoughts? What's the gut tell you on promoting this as a business owner. [00:31:17] Dave: The first thing I would say is that when I started thinking about building a business, making online courses at all, my first thought was who on earth is going to pay any money for the learning, any of this stuff? And there's, there's this thing called YouTube. I don't know if you've heard of it, but it's just full of all the free advice and tutorials and walkthroughs. [00:31:37] You could, you could ever hope for I purposefully, actually, I got over that mindset issue quite quickly, it's nonsense, but people are prepared to pay and they're prepared to pay good money as well for an investment in their career and their time and their stress levels and everything else. So, in terms of me worrying too much about people paying for a course or even paying for a platform, doesn't really worry me too much because the people who buy. [00:32:04] My course is our people. They are. I always think that out of my email list, probably, I don't know what the numbers are. 5% will buy something that I'm I make and those people are prepared to pay. I don't know how much my courses have been. I think, I think, I think the highest price, no stress WordPress was, which is discontinued now. [00:32:26] Not in know fairly indefinitely. I think there was about 800. For that. So, between sort of 4, 5, 6, 7, 800 bucks for a course, those people are absolutely. I mean, the web flow, cause it isn't that at all. I think it starting at two nines. So that's, that's, that's a bit lower just to, just to get started with at the moment. [00:32:48] But I'm, I'm, I'm fairly convinced and I am delighted to appeal to people who are willing to invest in their education and their professional development and the tools [00:33:00] that they use as well for an easier life. And so actually ultimately get a return on that investment, in terms of faster builds and not having to worry. [00:33:10] About updating plugins and maintenance and stuff, breaking and having to fix things and all that sort of thing. So, yeah, it doesn't, it doesn't really worry me. It's all. [00:33:19] Matt: Yeah. I mean, when you have somebody who's already, I did an article. I, again, if I was a professional podcaster, I would have this up, I think element or web flow. Let's just see if my site ranks first. It  [00:33:31] Dave: Oh, oh, harsh,  [00:33:33] Matt: Element or web. Oh yeah, it does. I'm on the first page. Okay. A little, a little bit down on the first page, if you Google element or web flow, but I say in defense of element or versus web flow, and this site publish this February of this year, God man, you just, I didn't even understand time anymore. [00:33:48] February 11th, 2021. When folks were talking about the price hike of element, or now I'm not here to argue whether or not the. The approach of what Elementor was doing with bugs and features and whatnot is fair or not. I didn't have anything against the price hike, if you will, for ELA mentor, because man, I feel like so many people are making money with elementary or. [00:34:12] That even if you bought their $1,000 a year for a thousand websites, I mean, if you're somebody who's producing a thousand websites, you're at least charging $2 for one of those websites, right. You're selling these websites for at least $2, you've doubled your money. Right? So I was never against the raising of the price because hopefully that raises value of all things WordPress. [00:34:34] But my point here is people are already spending money in the web flow world. Whereas. Hats off and kudos to you. You're selling courses in the WordPress world where a majority of people are used to free. So you already were fighting a battle that I've not been able to solve  [00:34:51] Dave: Yeah, there is. I mean, there is a sense isn't there because WordPress is open source. Everything should be. And you, you hear that all the time. And I think that's just going to be a constant issue. Really. One thing that when I actually looked at certainly for, certainly for the people that I'm M in my course out, and the people that I kind of want to help when you actually look at the price of Webflow, cause people say, God, man Webflow is so expensive. [00:35:13] I think, well, if you look at it, you pay an account. I won't go into all the massive details, but you pay an account plan fee, which is basically a single monthly families, about 24 books. Which allows you to build, buy all, to build onstage on a, on a web flow.io domain all your web flow sites you've got in development, and you can share those with clients and you could even just make those live on the S on the staging sub domain, if you didn't want to point a live domain of them. [00:35:41] So that's 24 bucks a month. It's basically similar to, if you've got like an Adobe creative cloud subscription or you've got an elemental license on it and a theme license, and it just allows you to use the platform. So that to me is like, well, that seems perfectly fair. And then you [00:36:00] pay a per site site plan fee as well, which I think is about 20 bucks a month. [00:36:05] Now people who are hosting. Crumbing websites onto, I could attend books a month hosting plan, and they're quite happy with all the configuration and the setup and everything that, that entails and possible performance issues and whatever, then absolutely. I mean, knock yourself out. [00:36:23] Brilliant. But if you compare to, I mean, let's just take a WordPress managed host, like Insta, for instance, I think Ken stir last time I looked, it was 20 bucks a month. Now w so, so for each live site, you've got a domain pointed to, to web flow. You're paying 20 bucks a month for that. I mean again, if you're not making at least $20 a month back from the website, then there's something wrong. [00:36:48] You, you, you really should be a book. Also with that. You also get like the CDN, you get all of the page speed stuff set up for you, and it's all done for the, the sites are blazing fast, absolutely brilliant. All green, like top of the range, kind of page speed scores, the host inside and out for you. [00:37:07] Security. So sorted out for you. All of the functionality seems to me in many ways, if you were a person who would appreciate managed hosting, and it seems to me that that is actually a pretty good deal overall,  [00:37:21] Matt: I tend to agree things get a little crazy when you start getting into the e-commerce world with web flow the way that they do pricing, I broke it all down in this, in this post. Although this post is now a few months old and I'll link that up. I'll try to link that up in the, in the show notes. [00:37:34] But  [00:37:34] Dave: was a simplified.  [00:37:36] Matt: Yeah. At the end of the day, like the trade-off again is support all in one platform. If you really wrestled with, I want to own everything for the sake of owning it, and it's a whole mind, it's hard to make that mental leap and appreciation leap. I don't have a better word right now, but like, it's hard to make that leap from WordPress if you're really stuck in that, in that  [00:38:01] Dave: Yeah, absolutely. And I would, I would say to anybody that it's not like, I certainly don't set say to everybody, you must use Webflow is far better than WordPress. That's actually not what I'm saying. He probably comes across that way. There are trade offs with everything, and if ownership. Or certainly a feeling of ownership anyway and having control over every single aspect of that, of your website and website workflow and everything else, if that is important to you, for whatever reason, that's great, but there's a trade off in the maintenance and the plugin updates and stuff, breaking and everything else. [00:38:37] That's the that's that's, that's the deal, you w you can't have your cake and eat it kind of thing. I think he's just true of everything in life. Same with Webflow, yep. You don't have all of those hustles, but Yeah. [00:38:48] you've got a platform where you are in a way renting the site from, from Webflow. [00:38:53] What if Webflow disappears overnight? There were all these concerns. I mean, I've got, I've got kind of, answers for all these [00:39:00] objections, but There are also just very, very quickly. One of the biggest objections is she's quite funny to me is about recurring income from care plans. [00:39:10] So people will say I've got a pretty good business making recurring easy money every month by charging clients to keep the website updated the WordPress website update. And make sure it doesn't, it doesn't break for them. What am I going to do about that with Webflow? Because he just works, what's the, what, what, what, where am I going to make this money? [00:39:29] My short answer is always, well, first, if all things were equal and you could build a website in WordPress or web flow, and let's also say that either of them would be appropriate for the project, Really recommend WordPress because it's prone to problems, it's prone to problems and it, and it breaks. [00:39:51] And you can charge the client forever in order to, just to be basically lightly. No, let them have a working website. It sounds a bit harshly. It sounds like I'm kind of over again things, but that's kind of how it is really. Now my view is the client, your clients don't care. About how you did something, all that, how long it took you, all the steps you took, they are, they only care about the result on all the clients are paying you for, for, for a care plan, just in terms of the maintenance side of it, not talking about anything else. [00:40:24] Well, the maintenance side of it, they are paying you so that their website is rock solid. Isn't down works perfectly, and it just doesn't have any issues. Well, why can't you charge the client for the. You've found a better or the best platform that you think for their particular needs for their project that has all that in place. [00:40:46] You've spent all this time and money learning the platform. Why not charge clients for that? I, I don't think clients particularly cared that you've got to update plugins. You've got to spend X amount of time doing that. I think it's a bit of a non argument, rarely.  [00:40:59] Matt: I think at some of the tiers on web load, there's a little phone number you can call, right. So good luck. Yeah. Calling yeah. Calling you got a dozen plugins doing. Things, you're not going to call PIP in and, and, WooCommerce, you're not going to call these people and get them on a conference call to figure out what your site is at the end of the day. [00:41:18] You look, you're paying for that support. And web flows. As far as I know, in the news web flows slated to be a IPO and, and be a publicly traded company here in the states. And they're a private company now, but they've raised over 140 million. So they're probably valued at billions. I don't even know what money is these  [00:41:33] Dave: Probably, yeah, exactly. yeah, MailChimp is worth what was it? 12 billion, or something like  [00:41:37] Matt: half the half the banana industry or the entire globe?  [00:41:41] Dave: So, so w what is money.  [00:41:43] Matt: yeah. What is money via Canva? Just raised Canva just got another 400 million valued@fortybillioncanva.com. It's just, I don't know, Dave, what are we doing wrong here? [00:41:57] Dave: Well, I'm I think I'm going to hang these [00:42:00] headphones up.  [00:42:01] Matt: I'm going to make a canvas course. What am I doing with Webflow? Here's how to make a template in Canva. Oh man. It's called WordPress to web flow. His name is Dave Dave for you can search for Dave for you can go to date for.com. You can search him on YouTube. You can go to WP two w f.com or pressed a web flow. [00:42:21] Dave, anything else that any other place that people should find you? Yeah. [00:42:24] Dave: The other thoughts that you've covered up. So everything there, my friend. Yeah. [00:42:27] Brilliant. Thank you very much.  [00:42:29] Matt: Fantastic stuff. It's my report. My report.com my report.com/subscribe. Hey, if you want to support the content happening here at the Matt report, go to buy me a coffee.com/matt report. You can join the membership there and be part of the, the news right now. It's about the, the WP minute. If you want to be involved in the news, you wanna have your hand in shape. [00:42:49] Our weekly WordPress news, the five minute dose of WordPress news every week@wpminute.com. Go to buy me a coffee.com/matt report. Buy me a coffee.com/matt report. Support the show. Thanks for listening. 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Dave Pell has been writing online for almost as long as the internet has existed. His popular newsletter, NextDraft, has over 140,000 subscribers. NextDraft covers the day's ten most fascinating news stories, delivered with a fast and pithy wit.Dave has been a syndicated writer on NPR, Gizmodo, Forbes, and Huffington Post. He earned his bachelor's degree in English from U.C. Berkeley, and his master's in education from Harvard.Besides being a prolific writer, Dave is also the Managing Partner at Arba, LLC. For more than a decade, Arba has been angel investing in companies like Open Table, GrubHub, Marin Software, Hotel Tonight, Joyus, and Liftopia.In this episode, you'll learn: How Dave merged his two writing passions into a successful product The key to building a strong relationship with your audience How Dave dramatically increased signups to NextDraft Links & Resources Flicker Unsplash Fareed Zakaria Jim Rome The Skimm Morning Brew The Hustle Spark Loop Sam Spratt Dave Pell's Links Dave Pell on Twitter NextDraft newsletter Dave's new book: Please Scream Inside Your Heart NextDraft app PleaseScream.com Episode Transcript[00:00:00] Dave:If you have something to say in one way or another, the internet is a great place for people to figure out a way to receive it. So, that's pretty powerful and still excites me. I still press publish with the same enthusiasm now than I did when the internet first launched.[00:00:23] Nathan:In this episode I talk to Dave Pell, who has been writing for basically as long as the internet has been around. He's been an investor since the early days. He's been writing since the.com bust, and even before then. He writes his popular newsletter with 140,000 subscribers called Next Draft.We have this really fun conversation about writing. His writing process. How he grew the newsletter. Bunch of other things that he cares about. Even a few things that I was interested in, like he doesn't have his face in photos on the internet very much. He has his avatar instead. So, just getting into why that is.He also has a book coming out soon. It's called Scream Inside Your Heart, which is a fun reference to some memes from 2020. So, enjoy the episode. There's a lot in there.Dave. Welcome to the show.[00:01:12] Dave:Thanks a lot for having me on.[00:01:14] Nathan:Okay. So you've been doing this for a long time. You've been writing on the internet since the .com era. So, I'm curious maybe just to kick things off, what have you seen—I realize this is a giant question.What have you seen change? What are some of those trends that you've seen, that you either really miss from the early days, or some of those things that you've held onto from the early days of the internet, that you're really still enjoying?[00:01:46] Dave:Yeah, that is a pretty huge question, but I'll give it a shot. The thing I miss from the early days of the internet is that our democracy was not being destroyed by the internet in the early days of the internet. So, everything we thought we were building, basically it turned out to be the opposite of what actually happened.The part about the internet that I still feel is there, although a little bit less so because of the big companies have sort of taken over all the platforms and stuff, is just the idea that someone can have a passion or a creative output that they want to share with the world, and they can mold internet tools to fit their skills, and then use the internet to broadcast that out, and still become sort of pretty popular withour the “OK” of some gatekeeper at a publication, or at a television studio, or whatever.The indie spirit of the internet still lives on. It ebbs and flows, and has a lot of different iterations. But that was the thing that excited me the most when I first played with the internet. And that's the thing that continues to excite me the most now.[00:02:57] Nathan:I always think of the newsletter, and your newsletter in particular, is that indie spirit. Is that what you see most commonly in newsletters? Or are you seeing it in other places as well?[00:03:10] Dave:I see it in podcasts. I see it in newsletters. I see it in people sharing their art, sharing their photography on Flicker, and up through the more modern tools. I go to a site called Unsplash all the time to look at images, and it's just basically regular people sharing their images.Some of them are professional photographers, some aren't, and they're getting their work out there, and then some of them probably get jobs out of it and stuff like that. So, just the idea that you can have some kind of creative output and have a place to share it. And try to get an audience for that is really inspiring.It's a lot harder than it used to be because there's a few billion more people trying to get attention also, and because there are more gatekeepers now. So, you have to, hope that your app meets Apple's guidelines, or that different products you might want to share on the internet have to meet certain classifications now, whereas they might not have in the very early days of the internet. But in general, if you have something to say in one way or another, the internet is a great place for people to figure out a way to receive it.So, that's pretty powerful, and, still excites me. I still press published with the same enthusiasm now that I did when the internet first launched.[00:04:32] Nathan:Yeah. So let's talk about the main project that you have right now, which is Next Draft. Give listeners the 30-second pitch on Next Draft, of what it is.[00:04:46] Dave:Sure. Basically I call myself the managing editor of the internet. What I basically do is a personality-driven news newsletter where I cover the day's most fascinating news. I cover 10 stories. A lot of times in each section there's more than one link. I give my take on the day's news, each individual story, and then I link off to the source for the full story.When I first launched it, I called it Dinner Party Prep. I provided enough information for you to sort of get the gist of the story. And if there's topics you want to dig deeper, you just click and, you know, go get the story yourself. So that's sort of the overview of it.[00:05:27] Nathan:Nice. And you said that you're obsessed with the news maybe in a somewhat, even unhealthy way. why, where did that come from?[00:05:36] Dave:Yeah. Well, nothing, nothing about my relationship with the internet is only somewhat unhealthy. it's all extremely unhealthy, but, both my parents are Holocaust survivors and, when I was growing up, news was just a very big part of our daily lives, especially when my three older sisters moved out and it was just the three of us, that was sort of our mode of communication.We talked about the news. We watched the news together. Fareed Zakaria is basically the sun my parents always wanted. but so I got really into the news and being able to connect the news to, our everyday lives, which of course my parents had experienced as children and teens and Europe during world war II.And also reading between the lines about why certain politicians might be saying something, why stories are getting published a certain way. So I just got really into that and I've always been into a and college, you know, I, I majored in English, but if we had minors at Berkeley, I would have minored in journalism.I took a bunch of journalism courses. I've always been really into the media, but not so much as quite an insider where I go to work for a newspaper, but more observing, the news and providing sort of a lit review of what's happening and what has momentum in the news. So I sorta got addicted to it and, Also as a writer.My favorite thing to do is counter punch. I like to have somebody give me a topic and then I like to be able to quickly share my take, or make a joke or create a funny headline about that content. So I sorta took those two passions of the way I like to write. I like to write on deadline. I like to write fast and I like to counter punch and the content that I like, which is news, and I sort of merged those two things and created a product, and a pretty cool suite of internet tools to support that.[00:07:35] Nathan:Yeah. So that makes sense that you've identified the constraints that match your style and made something exactly that fits it. the deadline, like having, he, you know, coming out with something on a daily basis, is more than a lot of creators want to do. so what's your process there?[00:07:55] Dave:Yeah. I mean, I should emphasize that I do it every day. Not because I think it's some incredible draw for readers to get Daily Content. I do it every day because I'm addicted to it. If my newsletter had five stories in it, instead of 10, it would do better. If my newsletter came out three days a week instead of five days a week, I'm sure it would do better.If it came out once a week, it would do even better then you know, also if I had a more marketable or not marketable, but a more, business-oriented topic that was more narrow, it would do better. I used to write a newsletter that was just on tech and it was. Really popular in the internet professional community back in the first boom, I had about 50,000 subscribers and there were probably about 52,000 internet professionals.So I just like writing about what I want to write about and I'm addicted to pressing the publish button and I'm just addicted to the process. So I do it because of that. I'm not sure that would be my general advice to somebody trying to market or promote a newsletter.[00:09:01] Nathan:Yep. Are there other iterations, either ever before or things that you tried that you realized like, oh, that's not a fit for your personality, your writing style?[00:09:09] Dave:Yeah. When I first started it, I actually, I'm an angel investor also and have been since, probably right after Google and Yahoo launched. so a while, and I used to, my passion has always been writing, so I wanted to mix writing into that, process. So I would send out 10. Daily stories, but they were all tech news related to the CEOs of the companies I worked with and a few of their employees, so that they wouldn't have to spend their time reading the news or worrying about competitors or worry about what the latest trends in tech, where I would give it to them.And they could focus on doing their jobs and that sorta got shared and got out. so I did that for a few years. really, that was my iteration. I should've kept the brand. It was called David Netflix. not that it was a great name, but I've shifted brands about 40 times in my life. Cause I love branding and naming.I that's another, maybe this is more of a cautionary tale than a lesson and newsletter marketing. I would stick with a brand if anybody has the possibility of doing that, that was a big mistake I've made over the years is having multiple brands. But when the bus came, the first internet bust, I basically was writing an obituary column every day and about companies that had failed.So I just decided, I wanted to expand it and I knew I was interested in much broader topics than just tech news. So I expanded it to all news, a critical point that, really changed Next Draft and got it to catch on and become more popular was when I decided to focus on making it more personality driven and less, less overwhelmingly, providing an overwhelming level of coverage.I used to think that I had to provide all the news in the day because people would sort of, depend on me to provide their news. I was sort of selling myself as your trusted news source. So I would include a lot of stories that I didn't have anything to say about because they were huge news, you know, an embassy closed in Iran or whatever.That was huge international news, but I didn't necessarily have anything to say about that that day. So after a while I decided, no, I'm not going to do that. I'm just going to limit it to 10 items. And I'm going to focus that on what I think is the most fascinating and think of it less like a curation tool and more like, a, modern day column.I think if the column newspaper column were invented today, it would look a lot like Next Draft people would sort of share their takes and then provide links off for more information. once I did that, it was a big change. People started signing up much more readily and, once I stopped trying to be exhaustive.[00:11:56] Nathan:That makes a lot of sense to me. I think that that's something you see from a lot of creators is that they're, they're trying to find some model. That's like, this is my idea of what people should want, you know, rather than what they end up doing, eventually it's coming to, it's like, okay, forget all of that.This is what I want. And I'm going to make that. And then people like me can find and follow it. And people who don't can, you know, do their thing. Can you go find one of the other million sources on the internet?[00:12:21] Dave:Yeah. When I think of the people that I like to follow or have followed forever on the internet, all of them are that ladder. They just do it their way. They have a design, they want, they stick to their guns. They say what they feel like saying. they decide. what the personality of the product is.And, they move within that. I always find that to be the most interesting thing, especially when it comes to something like newsletters. I really think newsletters are more like a radio talk shows than they are like other internet content, podcasts to a certain degree as well. But I always feel like I listened to are used to listen a lot to this radio, sports caster named Jim Rome.And whenever he would have a new city that he was launching and he would always give the same speech on the Monday that they launched saying, just give me a week. You might not.Get the vibe of what we're doing today. You might think it's okay, but not great, but just give it a week and listen, and then decide if you like it or not.And I sort of feel like that's how newsletters are your relationship with your readers sort of creates this, sort of insider-y voice and communication that, you, it takes a little while to get into the rhythm of getting it. But once you do, then it's like this familiar voice or this familiar friend that you feel like, even if you didn't read it for a few weeks, you can start a conversation with that person right away easily.That's how I think the voice of a newsletter is most effective. So that's why I've always thought of it. More of what I do is sort of a textual talk radio, more so than a blog or some other format[00:14:01] Nathan:What do you think, or what would you say to someone who maybe had 10 or 20,000 subscribers and felt like their newsletter had gone a bit stale and maybe their relationship to it had gotten a bit stale or they're in this, this position of writing things that no longer have their voice, how would you coach them through like bringing their voice and personality back into it?[00:14:22] Dave:I mean, it's definitely hard. it's hard doing something that you do alone and, something that is often hard to really get off the ground or get to grow, especially when you're on a platform like the internet, where every day, somebody does something and 10 seconds later, they're like internet famous and you're trying day after day.So, I mean, the first thing. Is that you really have to be interested in what you you're passionate about. and focus in on that, because that will alleviate a lot of that stress. Like, do I feel like sending it today? I'm a too burnt out. What's the point? I mean, not that those feelings don't happen. I had those feelings as recently as an hour ago, when I press publish, I have those feelings and disappointments constantly, you know, that's part of being a creator of any kind.Maybe that word is sort of, sort of goofy, but anybody who's putting themselves out there and putting content out, you know, you have that feeling all the time. If you're an indie, and you're doing it all day in front of the computer by yourself, then that's even more powerful because, you know, if you work at a big company or everybody's working on the same goal, or even in a small group, you can sort of support each other and, maybe even bullshit each other at some cases where, oh, no, this really matters.You know, where, if you're by yourself, that has to be pretty self-sustaining or self-sustaining. I do have a friend or two that I always share blurbs with who, one of my friends Rob's, he proves almost all of my blurbs, so it's nice to have that virtual office mate. He's not really officially part of Next Draft, but you know, I don't think I would do it as easily or as, for as long if it weren't for him because he's like my virtual friend on the internet that says, oh, come on, let's get it out today or whatever.So I think that's helpful to have a support team or a couple people you can count on to sort of give you a boost when you need it. But the key really is, is that it's gotta be something that you are passionate about, both in terms of the product and in terms of what you're focusing on, because if you feel strongly about it, then it really.I don't want to say it doesn't matter if people enjoy it, you should take cues from your readers. What are they clicking on? What are they reading? What are they responding to? But at the core, it's gotta be you because that's what gets you through those down points? you know, I had a weird thing because I write about news.The general news, world basically benefited dramatically from the Trump era because everybody was habitually turning on their news, 24, 7, and refreshing and Whitey and Washington post and checking Twitter every two seconds to see what crazy thing happened next. And we're all poor sorta,[00:17:01] Nathan:Wreck to watch.[00:17:02] Dave:So everybody was really into it and it created.Unbelievable platform for people to become media stars. You know, Trump was bad for democracy, but he was great for media. Great for creating new voices out there. whether we like it or not. for me, it was different because I wrote about all news. I wouldn't say I was apolitical, but I wasn't heavily political.The Next Draft had plenty of readers from both sides of the aisle. when Trump came around, it was like one story every day, basically. So it really limited. I would get emails from longtime readers all the time that said, Hey, can't you cover something other than Trump every day?And I say, Hey, if you can find the story for me, I'll cover it. This is what every journalist is on. Now, the people who used to cover the secret service around Trump, the people who used to cover sports are not talking about Trump because of a pandemic relation ship to it. The people who aren't entertainment are talking about Trump because they can't believe that anybody voted for him, whatever the issue was, every dinner party was about Trump.So it was really a bummer for my brand and my product. Actually, it became boring in some ways to me to have the same story every day. And it became, I think frustrating to my readers.But during that era, when it was happening, I had to make a decision. Do I become more political and go full on with this?Or do I sort of try to. Do what I would call a falsely unbiased view or a, you know, false equivalence view that we saw in the media where there's both sides to every story. And you have to pretend they're both accurate, including one guy saying to put disinfectant into your veins. And the other person's saying to wear a mask and take a vaccine, but those things get treated as equal somehow because the president said it.And I really decided, you know, more important than keeping readers is that I'm true to my own sort of ethical standards. In a moment that called for it, at least for me. So I became more political. went into it and I said, what I believe and still believe is the truth, you know, about what was happening with Trump and Trumpism and our slide towards authoritarianism.And I know that this is a podcast more about newsletterish than it is about politics or news, but I'm just sharing that because that's the kind of thing that kept me going. and the people who really cared about what I was writing, appreciated it and would email me and say they got something out of that.And most importantly, my mom would say, yeah, you made the right call. Or my dad would say, yeah, you got that. Right. And ultimately, When it became a sort of a bummer period for me, which I would say 2020 was because of all the horrible news. And, I was writing a book about the year. So I was like living, July of 20, 20, well writing about March of 2020, which I don't recommend for anybody's emotional health.And I just had to think like, what's really important to me. Yes. I want to be funny, which I try to be in my newsletter every day. I want to be read my narcissism is as strong as ever, but ultimately I want to be able to look myself in the reflection of the, darken screen on the rare times that it is dark and say like, yeah, you told the truth and that kept me going there.So I think whatever your brand is, you know, it can be a newsletter about guitars, but if you have that sort of passion, And you have something you want to say, and you think is important to say it sort of gets you through those levels and your motivation. And if it's not getting you through the lows and the motivation, there's nothing wrong with saying, Hey man, this is not worth it.I'm going to go try to make something else. You know, it doesn't have to be, you don't have to beat a dead horse.[00:20:51] Nathan:On the political side. Are there specific things that you felt like it costs you opportunities that it lost you? Because I think a lot of creators, whether they talk about, you know, finance or photography or whatever, I'll see these things. And they're like this either directly relates to me and my audience and I feel like I should take a stand on it.Or it's like a broader macro issue that I feel like we should talk about. And when you do, then there's immediately, you know, somewhere between three and 300 responses of like, we didn't follow you for the politics, you know, or like something like that. And your Instagram, DMS, or newsletter replies or whatever.[00:21:24] Dave:Yeah. it costs me a lot. Definitely it costs me readers or subscribers. It costs me, psychic pain because I was locked into a story that was just overwhelmingly, emotionally painful, really, and shocking and difficult to understand all the things that cause you sort of emotional exhaustion. We're in the Trump story, especially in 2020, when it became a story about our own health and our kids' health.And the frustration level just went through the roof. for me, professionalizing that content actually helps create a bit of a barrier to the feelings about it. Some of my good friends were probably more bummed during 2020 than I was because when the latest crazy story or depressing story would happen, I felt I had to. Ingest that content and then come up with, something cogent to say about it. And maybe hopefully funny to make it a little bit of sugar to take the medicine and then get it out to people. So I've always felt that being able to do that, sorta created a barrier between myself and actually feeling something.So that's another thing I like about the newsletter probably at least unconsciously. but yeah, there was a lot of costs in terms of readers, for sure. Hate mail. but there always is, you know, Today. I would say I get much more hate mail from the far left. If that's what you want to call them. People who feel like every joke is like an incredible triggering a front to their existence or any hint that you mentioned somebody as attractive.I've gotten hate mail because I implied that Beyonce is appearance was part of her brand. I mean, it's totally crazy, but, It's those extremes. You have to be able to turn off. You know, a friend of mine used to work at a major, be the editor of a major American newspaper. And he said every Friday they would get together and they would play the craziest, calls to the editor.They had a call line. In addition to, you could send a letter or you could call, leave a voicemail about something you were upset about in the coverage. And they would just gather around and have drinks on Friday. Listen to this because of course the people who are calling this line are almost self-selecting themselves as a little bit wacko and their takes were usually pretty extreme.The internet, Twitter, social media, Provides, greases the wheels for those people to be more prevalent in our lives. But I think it's really important to know that that's a real minority of people, somebody who sent you a hate mail, that your joke was so offensive, or they can't believe you mentioned that people ever watch pornography on the internet or any of these other things, it's this tiny minority of people.And then it's one step crazier that they felt like they had to contact you. So that's a really hard thing. I think about being split, particularly the newsletter game, because anybody can hit reply and you're going to get many more replies from people with crazy complaints, than you are from people with really thoughtful responses.Not that those don't come and those are valuable and I love getting those, but you get many more from people that just have really bizarre. I mean I could list probably for hours to crazy things that people send me that they're mad about, you know,[00:24:50] Nathan:Is there something specific that you do? Like one thing when I get those replies, if they're just like completely off the wall or abusive or something like that, I just scroll down and then click their unsubscribe link because, you know, they're never going to know, and then I just have to show up in their inbox[00:25:07] Dave:Right.[00:25:08] Nathan:There's something that you do.[00:25:09] Dave:That's not a bad strategy. I like that. I do do that occasionally for sure. occasionally I'll just go to Gmail and just, create a filter for that email to automatically go to my trash. if it's like a hardcore right-winger, that's telling me how stupid I am about ivermectin and that, you know, people should be taking horse dewormer and I'm just not getting the truth.And that Trump is awesome and that, Whatever. I usually just delete, honestly, because I don't see a big benefit to replying to somebody, especially if it's like a rabbit email, you know, they're looking for a reply, they want the conflict. A lot of people sleep easy with conflict. That's one of the lessons of the internet that I learned when I was first starting on the internet, you know, David edix sort sorta became popular because somebody that had a blog with a similar name, that I hadn't heard of, complained that I sort of stole his name because his name was also Dave.And I had got like, probably about three or 400 emails saying, you know, with expletive saying what a horrible person I was. And I also got about 3000 subscribers and at the time I had about 30, so. I didn't know how to respond. I felt like, wow. Number one, I didn't know that guys had the product with the same name.Number two. My name was different enough. Number two or three were both named Dave. I mean, who cares? You know, and plus I don't want to be attacked by anybody. So your first reaction is to respond and a slightly older, although not noticeably these days with my gray beard, slightly older friend of mine who had been in tech a little longer, said, don't respond.This guy lives for conflict. You guys are going to fight. There's going to be this public thing. You're going to be up all night and he's going to never sleep so easy. So, I took that to heart and didn't respond. And I, I think about that a lot when I get rabid emails from people, Mike exception, actually probably my weak point really is from, more my side of the political spectrum, where people who are generally liberal, but are just so extreme for me.In terms of being triggered or having a joke, be every joke, be inappropriate. That those people, I actually do feel like I want to respond to because, I, I don't think I can really motivate or move, somebody who was on the opposite end of the spectrum and is sending me hate aggressive, hate mail, but maybe I can move somebody who's just a little bit different than me, or a little bit more extreme.I will respond to those, although I'm usually sorry. The one other thing I always respond to is if people have been reading, they say, oh, I've been reading you for years. And, I wanted to ask you a couple of questions about this book that you wrote before ordering it. And I'm like, just order the damn book. that's probably my most common email to people these days. It's actually remarkable how many people says, wow, I I've been reading you for years. I share you with all my friends. something, when my sons come home from college where it's always talking about, Dave said this, Dave said that, before I buy your book, I just wanted to ask you a couple of questions to make sure it's going to be for me.I'm like I worked on something for an hour and it's like, your family is talking about it. What, just by the thing I worked on for a year, you know? So those kind of things, personal frustration, I respond.[00:28:37] Nathan:Yeah, that makes sense. okay. I'd love to talk about the book some more, but before we get into that, there's two things I want to talk about. The first one is like, how do you measure success for the newsletter? What's the thing that you'd like to, cause I don't think it's, you're pursuing the monetary side for this.It sounds like the monetary side comes from investing and, and then what's success for the newsletter.[00:28:59] Dave:I mean, I have had right now, I I'm just marketing my, my own stuff. And during the pandemic I marketed non-profits, but, that had to do with either the pandemic or, the democracy issues that we were facing. but I have made decent money from selling straight sponsorships. Year-long sponsorships to people, which I highly recommend.I think some of the ads that people put into his letters that go by clicks or whatever, unless you have a massive audience, it's hard to make much money, but if you pitch to some company that is a like-minded brand, Hey, you're going to be my only brand for a year. And anytime you have special events, I'm going to mention it.Then you can say, okay, you have like, you know, 20,000 readers or a hundred thousand readers that can make a difference to a brand to say, yeah, it's like a rounding air show. We'll give you 20 grand or a hundred grand or wherever it comes in there that you can actually make a decent. Living in terms of writing.So that always worked better for me, but no, my, my internet life is really all about narcissism and, clicks, you know, the dopamine, I just want reads. I'd rather you subscribe to my newsletter than pitch me your startup company. I just, that's what I want the most. So more numbers, more opens, more reads, more subscribers.And unfortunately that's probably the hardest thing to get also, especially in a product that is sort of viral. I think newsletters are sort of viral, but it's better if you have a team and some tools to really get it going. That's, you know, sites like the Skimm morning brew and the hustle. They have teams that are really growth hacking and focusing on that and having rewards programs and ambassador programs.The reason you see that is because.Newsletters themselves are not really inherently that viral. Yes. Somebody can forward it to one person or whatever, but it's not as viral as a lot of other forms of content where you can click a button and share it with all of your followers, like a Facebook post or a tweet.So yeah, the thing that matters to me most is probably the hardest to get in the newsletter game, but that's the truth[00:31:10] Nathan:Yeah. Well, I think the, the point on like newsletters don't have a distribution engine. There's no Facebook newsfeed, YouTube algorithm equivalent for newsletters. And so it really relies on either you posting your content somewhere else, whether it's Twitter or YouTube or medium or something that has an algorithm or your readers saying like, oh, I read Next Draft.You should too. There's not really something else in there. Have you looked at, or I guess if you have thoughts on that, you comments on it, but then also have you looked at launching an ambassador program or, or an actual referral program?[00:31:44] Dave:Yeah, I've thought about him. And now over the last year, there's been a few tools that have come out a few. I think X people from sites like morning view Ru, and some other sites that have sort of perfected some of these marketing programs have, sort of come out with these tools. I've messed around with them a little bit.Some of them still require I find, some technical ones. so I, I have like an engineer who works with me on Next Draft, like as a freelance basis every now and then, but it's not always easy for me to launch stuff that requires a lot of a moment to moment technical support, and management, because it's just me using a lot of, they're customized, but they're over the counter tools.So I've thought about a lot of them, but I really haven't tried it that much.I want to though I do want to do that. I would like to do one of those programs, especially where you get credit for referrals. I think that's the best kind of model. So there's one called spark loop.[00:32:51] Nathan:Yeah, we actually, I invested in spark loops, so we[00:32:54] Dave:Okay.[00:32:55] Nathan:Decent portion of that business, so good.[00:32:58] Dave:Oh, nice. Yeah. That one, if it was just slightly easier, I know that it's probably difficult to make it easier because, there's so many pieces. They have to have your subscribers. I have to have my subscribers, but that is, does seem like a good product. And especially if they can, I think expand into like letting a person sell a product or whatever, get credited for sharing products that can be even bigger.But yeah, that kind of stuff is really powerful for sure. And I, I do want to get into that. it's more just inertia that I it's just a matter of sitting there for the, an amount of hours that it requires to get it going.But I do think that's a great thing for newsletter writers to do, and I'm pretty surprised that more newsletter platforms don't build it right in.I think that'll probably change over time too. Maybe you guys will get acquired by.[00:33:48] Nathan:Yep. No, that makes sense. I know for convert kit, we wanted to build it in, it looks at the amount of time that it would take and then said like let's invest in a , you know, and then roll it into our offering.[00:33:59] Dave:Yeah, it's hard. It's hard not to take that stuff personally, too, you know, for people that do newsletters, you think you're going to put a thing on there and say, Hey, you know, it's just me here and you always read my newsletter and click. I know you love me so much. Can you just do this to get a free whatever?And it's, you know, sometimes not that many people click, you know, or other times like they click just as long as there's the free item. So there's a lot of ways to get depressed. Like I had things where I say, Hey, the first a hundred people who do this, get a free t-shirt or whatever next strap t-shirt.And those hundred people will literally do what I asked them to do in like 34 seconds, you know? And then it like stops after that. The next time you ask them, if there's not a t-shirt. But it's not you, you know, if you go to a baseball game or a lawyer game or whatever, you know, people sit there, they don't even cheer as much for the team as they cheer when the guy comes out with the t-shirt gun.So it's like, people love t-shirts more than they're ever going to love you. And you have to go into these things with that in mind. there's no way, even if it's, even if you're XX large and the t-shirt is, you know, petite, it's still worth more than you are. And the average mind of the average person.So you have to go into all of these things thinking, I hope this works like crazy, but if it doesn't tomorrow, I open up the browser and start writing.[00:35:19] Nathan:Yeah. That's very true. I want to talk about the growth of the newsletter. I was reading something, which I realized later was back in 2014, that you were at around 160,000 subscribers. I imagine it's quite a bit larger than that now. And then I'd love to hear some of the inflection points of growth.[00:35:35] Dave:Yeah, I'm not, I'm not sure. I might've, I don't know if I lied in 2014, but now I have about,[00:35:41] Nathan:Quoted it wrong.[00:35:42] Dave:No, you might've got it right. I might've exaggerated. Maybe that was a including app downloads and a few other things. Yeah. I have about 140,000 or so now, so that would be making that a pretty horrible seven years now.You're depressing me.Your listeners should just stop, stop writing newsletters. It's not worth the depression[00:36:02] Nathan:Just give up now[00:36:03] Dave:Yeah. And by all means if Nathan goals do not pick up. no, yeah, I probably have it 140,000 on newsletter. Made my newsletter. It's hard to believe in this era of newsletters actually, but when I first launched Next Draft, I noticed that even people who would send in testimonials or that I would ask for testimonials would say, basically something to the extent that even though email is horrible, this is the one newsletter I I'd sign up for whatever.And I kept thinking, man, that's a bummer that I'm starting out at this deficit, that people have a negative feeling about the medium. So I, since then I've always made it my goal to. Have the content available wherever people are. So the newsletter is certainly the main way that people get next job, but there's an app for the iPhone and the iPad there.That's the first thing I launched because I wanted to have an alternative for people who just hate email too much. So now you go to the landing page, it's like, Hey, if you don't like email, here's another version. I have a blog version. I have an apple news version. I have an RSS version. I'm lucky enough to have a really good, WordPress custom WordPress install that I just push one button and it pushes it out to all of those things.But I am, I'm a big proponent of just meeting people where they are. even, as an example, I recently launched a sort of a substance. Version of my newsletter under the radar. but when I redo my site, I'm going to make that more clear because if people already subscribed to like 10 sub stacks and they're using their aggregator and they already have their email saved and they can just click a button, it's like, I don't care.You know, it takes me five extra minutes to paste my content into sub stack. So I just want the reads. I don't really care about how they read it or whether they read it.[00:37:55] Nathan:Yeah. That's fascinating. So then let's shift gears a little bit. I want to hear about the book. first I wanna hear about the title. Would you have it on your shirt?[00:38:03] Dave:Yeah. That's pretty embarrassing. I swear. I didn't know it was video today, but I do have a shirt[00:38:06] Nathan:You're good.[00:38:07] Dave:Otherwise I wouldn't have worn. This would have worn my Nathan Barry's shirt.[00:38:12] Nathan:That's right. It's in the mail actually. It's[00:38:15] Dave:Oh, good, good.[00:38:16] Nathan:Big photo of my face.[00:38:17] Dave:Yeah. Convert kit. My wife converted to Judaism before we got married. So I have my own convert kit.[00:38:23] Nathan:There you go. Exactly. so I want to hear like what the book is about and then particularly where the title came from,[00:38:30] Dave:Sure.[00:38:31] Nathan:It made me laugh a lot when I heard it.[00:38:33] Dave:Oh, cool. That's good. That's a good start then. yeah, the title comes from, in July of the, of 2020 when the pandemic was really setting in and becoming a reality for everybody. this amusement park outside of Tokyo in the shadow of Mount Fuji called the Fuji queue. amusement park reopened.And they found that even though everybody w everybody was wearing masks, people were screaming so much on some of the rides, especially the Fujiyama roller coaster, which was their scariest ride, that they were worried about germs spread. So they sort of put signs around the amusement park saying, no screaming, you can come, you can ride and have fun, but keep your mask on adults scream.And it sort of became a little minor social media thing in Japan, where people were sort of making fun of them like, oh, they're telling us not to scream. How can anybody not scream on the Fujiyama roller coaster? So in response, the, park management had to have their executives with perfectly quaffed hair and tie and colored shirts and masks on ride the roller coaster with a webcam facing them the whole time without moving a muscle.Cracking a smile or grimacing or screaming. And then at the end of the ride, when the rollercoaster stops, it says, please Scream Inside Your Heart.And that was always my favorite meme of, 2020. It went really viral. There was like t-shirts. aside from mine, there were posters memes. It sort of went crazy for about a week or two, which by 2020 standards is a pretty long time for a meme to last.And I just thought that made sense as a title for the book, because that's sort of how we felt, all year that I dunno if we were screaming in our heart, but we were certainly screaming into a void. Like no matter what we sat or yelled on social media or complained to our family members or friends, it just kept getting worse.The year just kept getting worse. And, so the idea is that this book sort of, now you're free to sort of let out the scream. And the book is it's about 2020, certainly, but it's really about the issues that led us to 2020. There's a ton about our relationship to media and including my own relationship to media and how that got us into trouble.Some of the stuff we're talking about today, how, technology has impacted our lives stuff. I've been sort of thinking about it, writing about for the last few decades, and a lot of the political hate that emerged. and, but it's all within this time capsule of the craziest year.[00:41:12] Nathan:Yeah. Yeah. And so that's coming out early in November, November 2nd. so you're, it looks like you're just starting the, you know, mentioning the promotion tour and all of that. is there a big, big push that comes with it or are you kind of, I, I'm always curious with people's book launches, what strategy they take.[00:41:30] Dave:Yeah. I mean, I'm a newbie, so it's, the whole process has been interesting to me working with a publisher, working with others, is not my forte. so I got used to that or I'm getting used to that and they're probably getting used to it also because working with grouchy 50 something in these is probably not ideal, but, yeah, I've just been promoting it so far in Next Draft, but I've been doing, I have a PR company that's helping me and I've been doing a ton of podcasts and I'm marketing it to my own readers.And then as it gets a little bit closer to the November 2nd date, I have a lot more stuff planned rut, a lot of influencers have early copies of the book, and hopefully they'll promote it. And, I'll call out a few favors from bloggers and hopefully newsletter writers. I feel like that should be my in theory.That should be my secret weapon because, in addition to being fun and creative, nothing moves traffic, except maybe Facebook, nothing moves traffic more than newsletters. I know a lot of people who run e-commerce companies and newsletters are always second, if not first, in terms of traffic drivers.So, I really think that, if some of my friends out there at morning brew in the hustle and the scam and all these other sites that sort of, have surpassed my size by quite a bit, put the word out that, one of their fellow warriors is, has a book out. That'll probably move the needle even more. The media, I'm hoping to get stuff like that, but I really don't know. I'm trying not to get my hopes up too much because, unlike a newsletter, it's not just one day's work, you know, you like worry about one word or one sentence in a book for like three weeks and then you put it out there and people are like, oh yeah, I'll check it out sometime.Thanks. So, you know, that's, you know, whatever that's life as a, you put yourself out there, that's how it goes. So I'm hoping it sells well. And, the more people that get it, I think some people, their first reaction is, oh my God, 2020. I don't want to relive that again. But, hopefully people who know my brand and those that they share it with, know that it's, you know, there's a lot of humor and there's, it's probably 30 pages before we even get into the first event of 2020.So it's, there's a lot more to it and it's sort of fun and crazy and tries to have the pace of a roller coaster. that was the other thing I took from the Fujiyama roller coaster.[00:43:59] Nathan:Yeah. So one thing that I'm always curious about with people who have like a prolific newsletter, you know, in your case of writing every day, and then like, for a lot of people, that would be a lot to handle of staying on top of a daily newsletter. And then you're writing a book on top of that. How did you schedule your time?Were you blocking off like, oh, these afternoons are specifically for book, book writing. Cause you turned it around relatively fast.[00:44:24] Dave:Yeah. the newsletter is sort of like a full-time job. People always ask me, you know, when do you work on, or how many hours do you spend on it? I mean, I'm, I'm always looking for news, whether it's on Twitter or friends, emailing me stuff or texting me stories, or just in conversations with people to see what they're into or what stories are interesting them or what I'm missing.In terms of actual time spent like where I'm dedicating time. I probably do like about an hour every night, because the story has changed so quick. So I'll do an hour of looking for stories every night. And then the next day I sort of lock in from about nine to one, usually, or nine to 12, where I'm finding stories, saving those stories, choosing what stories I want to go with and then actually writing the newsletter.All of that takes about anywhere from like two and a half to four hours, depending on the day I go pretty fast. When it came to the book, that was tricky. It was actually more emotionally tricky because like I said before, I was like, had to go back and write about, you know, Briana Taylor while I'm living another horrible act, you know, or even more so the Trump, you know, one crazy Trump thing and another crazy Trump thing and seeing the pandemic getting worse and worse.So that was stressful. But I found at the beginning I would try to write a lot at night and that was okay. But I found actually if I just kept going, in the day when I was already rolling and had written the newsletter and I was already in the group just to add on an hour or two to that was actually easier and more effective for me than trying to get going.But that's just me. I mean, I just go by my it's almost like my circadian rhythm or something like that, I almost never eat or consume anything before I'm done with next job except for coffee. I would keep that going, you know, once I would like, sort of have a sandwich or whatever, then it's like, oh, let me just take a quick nap and then whatever.So, yeah, I tried to just keep it going. I always find the more consistently busy I am, the less I procrastinate. And if I take a day off or I take a few hours off, even then, between writing, it just, it takes me longer to get going.[00:46:37] Nathan:Yep. That makes sense. The habit that I'm in right now is starting the day with 45 minutes to an hour of writing and that's working much better for me than like slotting it in somewhere else. So I think like w what I hear you saying is like, experiment and find the thing that works well for you.[00:46:54] Dave:Yeah. I mean, if you're going to start experimenting almost every writer, I know not like newsletter writers, but just general writers, all do what you just described. They sort of pick a time in the morning and they get their output done. then the rest of the day, if ideas come to them or whatever, they jot it down, but they're sort of powering in that morning hours.[00:47:13] Nathan:Yeah.[00:47:14] Dave:That's probably a good one to try. Although, you know, some people just do it better at different hours. I'm sure.[00:47:19] Nathan:Yeah. another thing I realized, I've always you for years, and until we got on this video call, I had no idea what you looked like. and which is kind of an interesting,[00:47:28] Dave:Well, I'm sorry.It's by design. I have a face for Panda.[00:47:32] Nathan:Tell me more about, well, I guess two sides, one, has there ever been an interesting interaction? You know, because you're like, Hey, I'm, I'm Dave and people are like, I wouldn't have ever recognized you. Or has there been any other benefits and thought behind, you know, why it have an avatar?[00:47:49] Dave:If by interesting you mean horrible? Yes. There's been many interesting interactions with people. I mean, before, before I had my current, avatar, which is, pretty awesome, actually, a guy named Brian Molko designed it. I had this incredible drawing of a character that looked like me that, had sort of ether net, Machinery and cord going into his head and it was like me, but my head was actually lifted.The top of my head was lifted off and you could see all this machinery and it was an incredible graphic, by this guy named Sam Spratt. Who's now done, album covers and book covers. He's like a super talent. If you want to follow somebody fun on Instagram, he's just incredible. And it was a drawing, even though it looked photo realistic.And I used that for a while and then I would go places and people would be like, you are so much fatter and grayer than I imagined. And so instead of having Sam sort of ruin his artwork, I went back with the more, cartoonish or animated, avatar. So since then I don't get too much of that, but, that was a good move.Although that's the best thing about avatars and the internet is that your avatar never ages. It always looks the same. It stays the same weight. My avatar never overeats he exercises right here. Angie really gets along well with others and doesn't have any kind of social anxiety either. So he's pretty cool.Yeah, it goes a little downhill with me in person. So[00:49:21] Nathan:Yeah. So is it, that's something that like, it gives you some distance between you and readers, or it gives you some anonymity that, you know, you don't want to be recognized in the streets?[00:49:32] Dave:No, no, it's, it's, basically just what I described. It's like, I literally prefer the, the attractiveness of my avatar versus me, but also actually my avatar is really awesome. my logo, so it's also iconic and scalable. so it looks awesome on t-shirts even people who don't know what Next Draft is when they see, by son wearing his t-shirt, whatever, it just looks awesome.So that that's that's as much of it as anything. I thought your response was going to be mad. You seem perfectly attractive to me. I don't know what the issue is, but no, you went with, am I doing that for some other reason? Yeah. So, I get this all the time.Cause my wife is a very attractive person also. So when people meet me, they're always like, whoa, we were once a very famous celebrity came up to me and I said, oh, I'm Gina's husband. And she was like, wow, you did well. Oh, you know? So I'm like, thanks a lot. That helps. So just gave her a picture of my, my icon and walked away.[00:50:31] Nathan:Then that worked. I'm sure that she has it framed in her office, from now on. it's just interesting to me. You're you're sort of at this intersection between personal brand and, like media brand. And I think the avatar helps push you over into the media brand side. and I don't have any real commentary on it other than I find it interesting.[00:50:53] Dave:Yeah, no, I think there probably is some of that. I I've never really been a fan of using my actual face, or my actual person as a logo. I love the process of designing or working with people to design logos and taglines and all that. But yeah, probably at some point there was a, a goal with Next Draft to make it seem bigger than it is.I know a lot of people that are solo operators. They regularly say we, when they're talking about their brand to make it seem bigger, I actually think that's sort of been flipped on its head though. in the last few years where so many people are coming into the space, it's very clear that what they're doing is leaving a big brand, leaving a we and going to an eye.And I think it's actually a selling point in a lot of ways. So, I mean, I, I still get a lot of emails that say, I don't know if anybody at Next Draft is going to read this email, you know, or if you do, can you get this message to Dave? He's an asshole or whatever. And it's like, I'm the only one here, you know, or the other one I always get is when I email back to people that go, oh, I can't believe you actually emailed back.I didn't think this would get to anybody. It's like, you hit reply. And it had my email, like where else would it go? Exactly. You know? But I think actually having people thinking of you as a person, instead of a brand, Is a benefit today. Whereas if you would ask me when I was younger, I probably would have said, make it seem like you have a big company behind you.[00:52:24] Nathan:Yeah. And I think that that indie shift overall, like people are looking for that.[00:52:29] Dave:Yeah,[00:52:29] Nathan:Want to ask about the intersection between your investing and the newsletter. like, are you still actively investing today and doing author.[00:52:38] Dave:Yeah, yeah, no, I, I still invest a ton. I usually follow along with people who are a little more in tune with today's companies than I am. I don't really go out there and brand myself as an investor much, but I've been really lucky. I have very little intersection actually, if any, with my newsletter and my investing and I definitely want people to. To think of me as a writer first, for sure. Not as an investor who has this hobby, because that's definitely not in terms of time or passion, the reality. but I've been really lucky over the years that, I've invested with people or co-invested with them that were cool with me. branding myself as a writer first, but still looking at deals that came through their brands because they were branded as BCS or investors or angels.That's probably a bigger deal now than when I first started. There were like five angel investors, basically. Nobody really did small, early stage seed deals. you know, I mean, we all knew each other that did it and now there's like thousands of them. So you really have to be either a really pretty well-known entrepreneur or you have to. Sort of attach yourself to our organization or two who are really branding themselves well, getting out there and building a stable of companies,[00:53:58] Nathan:Yeah.[00:53:59] Dave:It's pretty different, more, much more has changed about that than the newsletter game, actually, which is pretty much the same as it was the day I started actually.[00:54:07] Nathan:Are there a few of those I'm curious who are a few of those, people that you would tag along with, you know, when they're investing where like, oh, this person puts money into something I'd like to be right there with them.[00:54:19] Dave:I mean, I have some people that are like entrepreneurs and former entrepreneurs that do it, and if they like it I'll do it. but generally I co-invest with, at any given time, a different group of people, used to be a larger group. When I first started out, my whole investing career, I've co-invested with this guy named Bob zip who's much smarter and much wiser than I am about all things business and.Startup world. So that was really great. And he used to work at a company called venture law group in the first boom, and they represented Google, Hotmail. eGroups all the big, huge, early internet companies, and so he really knew the space well. And when he became, I used to get deals from him.That's how you used to get deals actually was by a couple of law firms that focused on startups. I've been co-investing with him all along and he's been generous enough to, he left the law firm a long, long time ago and became an investor primarily. And he had a fund and was well-known guy and well-respected guy.So I got to sit in when he would hear pitches. and we sort of, we weren't investing together out of the same fund, but we would sort of make our decisions together. And we still do that a lot. these days, I almost always follow along with a guy named run-on barn Cohen and a really good friend of mine.He was for many years at WordPress, basically, most of the things that make money at WordPress, he did. and now he's a investor at a VC called resolute. If anybody's looking for a good VC, he's like incredible, like Bob zip much, much smarter than I am about this stuff. Unbelievably ethical, great business sense.Great technical sense. so I mostly just follow him. So if he does something that's usually good enough for me. And if I see something that I think it's good, I'll pass it along to him, but it's mostly that, but I've been really fortunate. I can't express that enough, that I've been able to invest in companies without having to spend all of my time, branding myself as an investor.That's just been unbelievably lucky. So, I've been able to focus a ton of my energy on my six.[00:56:31] Nathan:That's right. I'm writing a newsletter about the news. I guess, as you're looking to grow and continue on, right? Like the next phase of readers and, and all of that, since we can just say directly that we're all narcissists and we do this for the attention. what's what's sort of that next thing that you're looking for, it's going from 140,000 subscribers to say 200,000 and beyond.[00:56:54] Dave:Yeah, well, I'm, I'm hoping that, I'm not just trying to sell my book here. I'm hoping that the book and the newsletter will sort of have, a coexistence with them because the new the book is really an extension of the brand and the brand is that icon to Next Draft. So I'm hoping that the tricky part about writing about marketing a newsletter, like we discussed earlier, there's not really a natural virality to them.So. You Have this piecemeal growth from people telling each other or their friends or forwarding it to somebody or maybe occasionally tweeting or sharing a Facebook link. Oh, you should check this out. But it's all sort of small little blips. If you get a news story or a big blog story about it, or another newsletter recommending you, that's probably the fastest way people grow these days is by, co-sponsoring each other's newsletters or co-promoting them.Those big hits are more rare and they usually require like, I've had a ton of stories written about Next Draft, but most of them a long time ago, because it's basically a similar product to what it was when they wrote about it the first time. So they're like, Hey, I'd love to write about it, but what's the hook.What's the new thing, you know? so I'm hoping that the book provides that emphasis. It's like, we're doing now a ton of people who may by either been on a podcast in the past, or they've wanted to do a podcast with me say, okay, now's a great time. I'd probably want to move your book and, we can set something up.So it's sort of as an impetus. So I'm hoping that that will be the next big newsletter thing that most, most people who write about the book will also write about the newsletter and the two things can sort of grow together.[00:58:35] Nathan:I think that's spot on.[00:58:36] Dave:That's in terms of, you know, marketing and promotion, otherwise, I do want to try, one of these referral programs because people definitely do like products.And, I am lucky that my icon looks really good on shirts so that people actually really want them. And I have a great designer named Brian Bell who makes all of my shirts.[00:58:58] Nathan:There's something like when creators thinking about products, often if you spread yourself too thin, you're like into the newsletter, the book, the podcast, and like the 14 other things that you could make all at once you sort of hinder the growth of each thing, but then if you really build one of them up to a significant level, then at that point it can start to stall out and by shifting to another medium or have it like launching another product in this case, the newsletter to a book, then that book can have a bunch more momentum that feeds back into it.And so there's just sort of this interesting balance of like, no, When to like, keep pushing on the thing that you have versus when to add the next thing that like, then they feed off of each other and go from there. So I think you're doing it with good timing.[00:59:45] Dave:Hopefully it'll work. All that kind of stuff is the tricky part of doing this stuff. Especially stuff like podcasts and newsletters that are—it's really a ton of word of mouth, unless you get lucky and get some press, and word of mouth is just slow.There's some point where you're going to hit a tipping point where you're going to go from five or 10,000 to like 50,000 much quicker, more quickly because instead of three people going home and saying, “Hey, did you ever hear of this newsletter?” there's like 30 people going home and saying that. But, even with that they hit a plateau, and then you figure out what's the next thing. That's why doing something you're into is so important.And I don't think it's bad to try those other mediums or stretch yourself out, because you never know you might've been writing a newsletter three years, and then you do a podcast and it catches on. For some reason, you're like awesome. Less typing, more talking, let's go. So, but it's tricky. I wish I was better and had better advice for people on promotion and marketing.I'm not awesome at it, and it's not in my nature. So, begging for favors or telling people, even in my own newsletter, to buy my own book is very painful for me. I'm very sensitive to criticism about it. So, if people just all bought it and then made everybody else buy it, that would be a huge relief for me.[01:01:13] Nathan:That would be great. Well, along those lines, where should people go to subscribe to the newsletter, and then follow you on your preferred channel, and then ultimately buy the book?[01:01:24] Dave:I don't want like two or 300,000 people taking my site down. So let's go with if your last name starts between A and M you can start by going to NextDraft.com and sign up for the newsletter there. Or, you can also just go to the App Store and search for Next Draft. If you're N through Z, you can start with the book, and that's at: PleaseScream.com.It has links to all the various audio, and Kindle, and hardcover versions.[01:01:50] Nathan:That's good. I liked how you split the traffic, that way there's no hug of death, and we'll do well there.[01:01:57] Dave:I don't want to get fireballed.[01:01:58] Nathan:That's right.Dave. Thanks for coming on. This was really fun.[01:02:01] Dave:Yeah, thanks a lot for having me.

Enjoy part three of this classic episode series where Andrew Warner from Mixergy interviews Russell on the ClickFunnels startup story! Hit me up on IG! @russellbrunson Text Me! 208-231-3797 Join my newsletter at marketingsecrets.com ClubHouseWithRussell.com ---Transcript--- Hey everyone, this is Russell Brunson. Welcome back to the Marketing Secrets podcast. I hope you enjoyed episodes 1 and 2 of the interview with Andrew Warner at the Dry Bar Comedy Club where he was telling the Clickfunnels startup story. I hope you are enjoying this interview series so far, and I hope also this motivates you guys to go over to the mixergy podcast and subscribe to everything that Andrew does. Like I said, he is my favorite interviewer and I think that what he does is second to none. So I hope that you guys enjoy him as well, and go subscribe to the mixergy podcast. But with that said, I'm going to queue up the theme song, and when we come back we will start into part 3 of the Clickfunnels startup story interview. Andrew: I actually got, I did see, I don't know, I didn't see the video you mentioned, but I did see what it looked like. Here's one of the first versions. He compared it to Clickfunnels, he said, I mean to Lead Pages. He said, “Look at how Lead Pages has their stuff all the way on the left, all the controls.” Oh you can't see it. Oh, let me try it again, let me see if I can bring up the screen because this is just, it's just too good. Hang on a second. I'm just constantly amazed how you're able to draw people to you. So this is the article from Lead Pages, this is the first landing page from Clickfunnels, this is what he created before, this is what you guys did together. This is your editor and h e said, “Look, if you're on Lead Pages, their controls, their editor is all the way on the left and it's just moving the main content to the right, which is not looking right. And I prefer something that looks like this, with a hundred pixels on the left, a hundred pixels…” I go, who knows a hundred pixels, it's like you, what is this? Russell: Dylan is obsessed with that type of stuff, it's amazing. Andrew: Obsessed. And you draw people like that. You draw people like Dave, who is just phenomenal. Dave, the traffic and conversion event that he was just talking about, is that the one that you went to? Dave: The one after that. Andrew: The one after that. Okay, we'll come back to that in a second then. So this became your next version, you brought on a new partner, and then you did a webinar with this guy. Who is this guy? Russell: It's Mike Filsaime, one of my first friends online. It actually wasn't a webinar, it was a live event. He was doing a live event in San Diego and he was like, “You have to come and sell Clickfunnels.” And I was like, “Nobody's buying Clickfunnels.” We had a free trial and like, we couldn't give it away. It was crazy. And he's like, “Well, you're on this website, you're picture is there, you have to come and sell Clickfunnels, and I need you to sell it for at least $1000.” Because the way it works, if you speak at someone's event, you sell something, you split the money 50/50. So he's like, “It needs to be at least $1000.” And I was all bummed out. I didn't want to do it. And the event actually started, but they were streaming it live online, so I was actually sitting at our office in Boise, watching it as I'm putting together my slides to create Clickfunnels, and then flew out to the event. And then we had a booth, and I don't know if I told you this, we had a booth and Lead Pages had a booth right across the little hallway, skinny hallway. And Todd's wife was manning our booth and then Lead Pages was right there, and it was so funny because she was not shy at all about talking about Lead Pages. She's like, “Yeah, we're like Lead Pages except for way better. We can do this and this.” And the other guy is sitting there like, right in front of her as she's telling them everything. And it was..anyway, I digress. It was pretty funny. Andrew: By the way, she's still at it. I saw a video that you guys created, you were talking to her and she goes, “I will be Clickfunnels.” I go wait a minute, you still had that fire, okay. So you were at that event. Russell: So we're at the event and there's probably, I can't remember, 150-200 people maybe in the room. So I got the slides up and Dylan was there and he was like, when we got to the funnels he was going to demo the editor, so I did the whole thing, showed the presentation and we demo'd Clickfunnels and at the end of the thing I sold. And I've been good onstage, but by far, that was the first time in probably 8 years that I'd seen a table rush, where people are stepping over the things, jumping around, trying to get to the back to buy as fast as they could. Andrew: What did you say to get them to want to do that? Russell: We made a really, I mean we gave the presentation, and gave a really good offer at the end. They get a year of Clickfunnels for free, plus they get training, plus they were going to get all these other things for $1000. Andrew: It was $1000 training and a year of Clickfunnels for free, and then they become long term members. And it was also called, Funnel Hackers? Russell: Funnel Hacks, yeah. Andrew: Funnel Hacks. And that's the thing that became like… Russell: The culture. Andrew: This culture, this tribe. It wasn't just they were signing to learn from you, they were becoming funnel hackers. That's it. Russell: I mean, that wasn't planned though. It was like, I was trying to think about a sexy name for the presentation, so I'm like ah, Funnel Hacks. And somebody owned FunnelHacks.com, and I'm like, I'm still doing the presentation that way. And then later we made t-shirts that said, “Funnel Hackers” and then now we got 4 or 5 people have tattooed that to their bodies, it's really weird. But anyway, that's what happened. We did that and we sold it and I remember going to dinner that night with the guys who were there, and Todd and his wife and everything. And we were all excited because we made some money finally. But I was just like, “You guys don't understand, like I've spoken on a lot of stages, and I haven't seen a table rush like that.” And I remember back, there was a guy, he passed away a couple of years ago, his name was Fred Catona. And he was a radio guy. He was the guy who did the radio commercials for, do you guys remember, it's got the guy from Star Trek, what's his name? Audience member: Priceline. Russell: Priceline. He did the Priceline radio commercials and made that guy a billionaire. And he told me when we were doing the radio ads, “This is what's going to happen. We're going to test your ad and if it works, I'm going to call you on the phone and let you know you're rich. Because if it works, it means you're going to be rich.” So I remember going to dinner that night and I told the guys, “Just so you guys know, we're rich.” And they're like, “What do you mean? We made $150,000.” I'm like, “No, no, no. The way people responded to that, I've never seen that in my life. We're rich.” The response rate from that, I've never seen. Andrew: And then you went to webinar after webinar after webinar. Russell: On the flight home that day I'm texting everybody I've ever met. “I got a hot offer, this webinar crushed it. We just closed whatever percent of the room at Filsaime's event. Who wants to do it?” And we started filling up the calendar. Andrew: And the idea was, and you told me you did 2 to 3 some days. And the idea was, they would sell somebody on a course, and then their members would then hear how your software and your funnel hacking technique would help up what they just bought and then they would sign up. You're still excited, I can see it in your face. And then this thing took off. And then you started doing an event for your culture, your community, and this guy spoke, Tony Robbins. Russell: Oh yeah, there's Tony. Andrew: One of the first ones. Was he at the very first one? Russell: No, he came to the third one, was the first one we had him come to. Andrew: Yeah? Why do an event? Why do your own live event? Russell: So we've done events in the past. I know events are good, but I'd sworn off them because the last event we did, I think we sold 3 or 400 tickets and less than 100 people showed up and I was so embarrassed. I was like, “We'll never do events again.” And as soon as this, as soon as Clickfunnels launched and it was growing, everyone's like, “We want to do a meet up. We should do an event.” All the customers kept asking. And against my, I didn't really want to do it, but at the same time I was launching my book, and I had won a Ferrari in this affiliate contest so I was like, “What if we did an event and we had the Ferrari there and we gave it away and then we're…” we had other ideas for giving away other cars and it became this big, exciting thing that eventually turned into an event. And that was the first Funnel Hacking Live event in Vegas, and we had about 600 people at that one that showed up. And that's where it all kind of, it all started. Andrew: And it built how much, how many people are you up to now? Russell: Last year we had 3500 people and we're on track to have about 5000 at this year's event. Andrew: 5000? Yeah. Russell: Those aren't free tickets. Each ticket's $1000, so it's…. Andrew: So how much is that in total revenue? Russell: From the event? Andrew: Yeah. Russell: So ticket sales, last year was $3 ½ million, this year will be over $5. But at the event we sell coaching so last year we made $13 million in coaching sales at the event as well. Andrew: Wow, would you come up here for a second, Dave? Do you guys know Dave? Yeah, everyone knows Dave. You know what's amazing… {Audience catcalls} Andrew: That's amazing. Dave: I don't know who that is. Andrew: A catcall. I saw a video, you guys have this vlog now, a beautifully show vlog. You guys went to sales force's conference, you're looking at the booths and in the video, do you remember what you did as you saw the different booths? Dave: I think that one I went and asked what the prices for each of the booths were. Andrew: Yes, and then you multiplied. And he's like, you're not enjoying the event, you're calculating ahead, how much. “10,000 that's 100,000….” It's like wow, right. You do this all the time? Dave: Yeah. It's a lot of money in an event like that. Andrew: And you think, and if this was not your event, you would be doing the same calculation trying to figure out how much they brought in today. Wowee. Alright when you went to sales force did you calculate how much money they probably did from their event? Dave: We were doing that the whole time, absolutely. Andrew: You saw the building, you had to know… Dave: Oh my gosh. 61 stories. Andrew: Why? Why do you guys want to know that? Why does, how does that… I want to understand your drive as a company and I feel like this is a part of it. Figuring out how much money other people are making, using that for fuel somehow. Tell me. Dave: I think it actually goes back to Russell and his wrestling days. We had the experience of going to Chicago right after that, and super just exhausted. And it was one of those things where he literally landed, we walked down and we're underneath the tarmac and all the sudden Russell goes from just being totally exhausted to a massive state change. Where he's literally right back where he was with his dad and he and his dad are walking that same path to go to, I think it was Nationals. And I saw Dan Usher, who was doing the filming, capturing that moment and it's that type of a thing for Russell. Where all the sudden it's the dream, where as soon as you see it, it can then happen. And Russell's just been amazing at modeling, and again the whole idea as far as just going at a rapid, rapid speed. I mean it's “Ready, fire, aim.” Andrew: It's not you gawking at the sales force, what's the sales force event called? Dave: Dream Force. Andrew: Dream force. It's not you gawking at how well Sales Force's event, Dream Force is doing, it's not you having envy or just curiosity, it's you saying, it's possible. This is us. That's it. Dave: It's totally possible. Andrew: It's totally possible. We could get there. And when you're sizing up the building, you even found out how much the building cost. Who does that? Most people go, “Where's the bathroom?” How much does the building cost? Dave: There's a number. Andrew: It's you saying, “We could maybe have that.” Dave: We can have that, yeah. Andrew: Got it. And so let's go back a little bit. I asked you about Traffic and Conversion because the very first Traffic and Conversion conference you went to, you guys were nobodies. Nobody came and saw you. Dave: We were put out in North 40 pasture, way, way far away. Andrew: And some people would say, “One day I'll get there.” you told Russell, “Today we're going to get there.” Dave: Well Russell wanted, he was speaking and so whenever you're speaking at an event, it's important that you fill a room, like this. And there's nothing worse than having an event and having no one show up. It's just the worst feeling in the world. And so he's like, “All we need, I gotta find some way of getting people into the event. I wish we had like some girls who could just hand out t-shirts or do something.” And I was like, we're in San Diego, that's like my home town. Russell: Dave's like, “How many do you need?” That's all he said. Dave: It's just a number. It comes down to a number. How many do you want? So we ended up having, within an hour or so we had 5 girls there who were more than happy to dance around and give out t-shirts and fill the room. Andrew: and the room was full? Dave: Packed. Andrew: Packed. And why wouldn't you say, “One day, the next time we come to Traffic and Conversion, the tenth time we're going to do it.” Why did it have to be right there? Dave: It's always now.   Andrew: It's always now. Dave: It's always now. Andrew: It's always now. It's never going to be the next funnel, it's never going to be the next product launch. I'm going to do whatever we can right now, and the next one, and the next one. That's it. That's who you are. Dave: That's how it works. Andrew: And now you're a partner in the business. $83 million so far this year, you got a piece of that. Dave: Yes. Do i? Russell: Yeah. Dave: Just checking. Andrew: Do you get to take profits home now? Dave: We do. Andrew: You do, you personally do? Dave: Yes. Andrew: Are you a millionaire? Dave: Things are really good. Andrew: Millionaire good from Clickfunnels? Dave: yes. Andrew: Really? Dave: Yes. Andrew: Wow. And you're another one. I was driving and I said, “What was it about Russell that made you work for him? What was it?” and you said, “I've never seen anyone implement like him.” Give me an example of early days, something that he implemented…you know what, forget that, let's not go back to Russell. As a team, you guys have gotten really good at implementing. Give me an example of one thing that you're just stunned by, we did it, it came out of nowhere, we could have been distracted by funnel software, we could have distracted by the next book, we did this thing, what is it? Dave: You're here on this stage with JP, and this was what 6 weeks ago? Andrew: and this whole thing just came from an idea I heard. You use Voxer. Why do you use Voxer? Russell: I don't know. Andrew: Because you like to talk into it. Russell: Yeah, and you can fast forward, you can listen at 4x speed, you can forward the messages to people really easily, it's awesome. Andrew: and it's just train of thought, boom, here's what I think we're going to…No, it's not that. I heard it's, “I have a secret project…” Russell: “I'll tell you guys about it later.” And they all start freaking out. “Tell us now.” Andrew: “Secret project. I don't know what it, it's going to be exciting.” They don't know what it is, going to be excited. Russell: Do you know how it started, this one? I was cleaning my wrestling room listening to you, and you were, I don't know whose event it was, but you were at the campfire, it sounded like. And you were doing something like this and I was like, I want my own campfire chat to tell our story. And then I was like, “Dave, we should do it.” And now we're here. So thanks for coming to our campfire…. Dave: That's how it happens. Andrew: And that's exciting to this day. Alright, thank you. Give him a big round, thank you so much. You know what, I didn't mean for this to come onstage, but I'm glad that it is. This made you laugh when you accidentally saw it earlier too. Why is this making you laugh? What is it? Russell: So we're not shy about our competitors, even when they're our friends. So one of the companies we're crossing out is his. That's why it's funny. Andrew: It's one of my companies. That's Bot Academy there. It's also a company I invest in, that octopus is ManyChat, I've been a very big angel investor and supporter of theirs. I'm not at all insulted by that, I'm curious about it. You guys come across as such nice, happy-go-lucky guys. Dave asked me if I want water, I said “Dave I can't have you give me any more things. I feel uncomfortable, I'm a New Yorker. Punch me, please.” So he goes, “Okay, one more thing. I'm going to give you socks.” So he gave me socks. Really, but still, you have murder in your eyes sometimes. You're crossing out everybody. This is part of your culture, why? Russell: It comes back, for me its wrestling. When I was wrestling it was not, I don't know, there's different mentalities right. And I did a podcast on this one time and I think I offended some people, so I apologize in advance, but if you're in a band and everyone gets together and you play together and you harmonize, it's beautiful. When you're a wrestler you don't do that. You know, you walk in everyday and you're like, those are the two guys I have to beat to be varsity. And then after you do that, you walk in and you're like, “Okay who are the people I have to beat to be in the region champ, and then the state champ, and then the national champ?” So for me, my entire 15 years of my life, all my focus was like, who's the next person on the rung that I have to beat? And it's studying and learning about them and figuring their moves and figuring out what they're good at, what they're bad at so we can beat them. Then we beat them and go to the next thing, and next thing, and next thing. So it was never negative for me, it was competition. Half the guys were my friends and they were doing the same thing to me, we were doing the same thing to them. I come from a hyper competitive world where that's everything we do. And I feel bad now, because in business, a lot of people we compete against aren't competitive and I forget that sometimes, and some people don't appreciate it. But that's the drive. It's just like, who do we, if I don't have someone to, if there's not someone we're driving towards, there's not a point for me. Andrew: And even if they're, even if I was hurt, “I accept it, I'm sorry you're hurt, Andrew. I still care and love you. We're going to crush you.” That's still there. Russell: And I had someone, so obviously InfusionSoft was one of our people we were targeting for a long, long time and I had a call with Clayton and someone on his team asked me, “Why do you hate Infusion Soft so much?” I was like, “I don't, you don't understand. I don't hate, I love Infusion Soft. I'm grateful for it. I'm grateful for Lead Pages, I'm grateful for….” I told them, have you guys seen the Dark Knight, my favorite movie of all time? And it's the part where Batman and the Joker are there and Batman is like, asks the Joker, “Why are you trying to kill me?” And the Joker starts laughing and he's like, “I'm not trying to kill you. The reason I do this is because of you. If I didn't have you, there's no purpose behind it.” So for me it's like, if I don't have someone to compete against, why are we playing the game? So for me, that's why we're always looking… Andrew: It's not enough to say, it's not enough to just say “we're playing the game because we want to help the next entrepreneur, or the next person who's sick and needs to create…” no, it's not. Russell: That's a big part of it, but like, there's something… Andrew: Yeah, but it's not enough, it's gotta be both. Russell: My whole life there's, the competition is what drives me for sure. Andrew: And just like you're wrestling with someone, trying to beat them, but you don't hate them. You're not going to their house and break it down… Russell: Everyone we wrestled, we were friends afterwards. We were on the same Freestyle and Greco teams later in the season, but during, when we're competing, we're competing and everyone's going all at it. Andrew: Everyone's going all at it. That's an interesting way to end it. How much more time do we have? How much more time do we have? I'm going to keep going. Can I get you to come up here John, because I gotta get you to explain something to me? So I told you, I was online the other day, yeah give him a big round. I was online the other day, I don't even know what I clicked, I clicked something and then I saw that Russell's a great webinar person, everyone keeps telling me. Well, alright, I gotta find out how he does it. So I click over, “Alright, just give your email address and you can find out how..” Alright, I'll give my email address to find out how he became such a great webinar presenter. “Just give a credit card. It's only $4.95, so it comes in the mail.” It comes in the mail, that's pretty cool. Nothing comes in the mail anymore. Here's my credit card. It goes, “Alright, it's going to mail it out. Would you also like to learn how to use these slides? $400.” I go, no! I'm done. Russell: Welcome to the funnel. Andrew: Welcome to the funnel. I'm done. But I'm going to put in Evernote a link to this page so I don't lose it so I can come back. I swear. I did it. And this is my receipt for $4.95. Don't you ever feel like, we're beyond this? We're in the software space now, we're competing with Dropbox, we're not competing with Joe Schmoe and his ebook. And you're the guy who sold the, who bought the ad that got me. John: I know. Andrew: I asked you that. Do you ever feel a little embarrassed, “We're still in the info market space.”? John: No, I think it's the essence of what we do, of what Russell does. We love education. We love teaching people. I mean, the software is like the backend, but we're not software people. I mean, we sell software, but we teach people. All these people here and all the people at all of our events, they just want to learn how to do it better. Andrew: I don't believe it. John: Okay. Andrew: I believe in him. I don't believe in you. I believe that for you it's the numbers. Here's why I don't believe it. I'm looking in your eyes and you're like, “I'm giving the script. I'm good, I'm doing the script.” I see it in your eyes, but when I was talking to you earlier, no offense. This is why he does what he does. When I was talking to you earlier, you told me about the numbers, the conversion, how we get you in the sales funnel, how we actually can then modify…That's the exciting part. Don't be insulted by the fact that I said it. Know that we have marketers here, they're going to love you for being open about it. What's going on here? What's going on, keeping you in this space? John: Okay, from my perspective. Okay so, initially it was self liquidation on the front, which is what I was telling you. It was the fact that we were bootstrapped, we didn't have money to just like throw out there. We had to make sure we were earning enough money to cover our ads. And Russell had all the trust in the world in me, I don't know why he did, but he did. And he's just like, “Spend money, and try to make it self-liquidate.” I'm like, “Okay.” So we just had to spend money and hope that we got enough back to keep spending money. Andrew: And self-liquidate means buy an ad today and make sure that we make money from that ad right away and then software. John: Yeah. Andrew: And then you told, and then software's going to pay overtime, that's our legacy, that's our thing. And you told me software sucks for selling. Why? John: Software sucks, yeah. Andrew: Why? Everyone who's in info, everyone's who in education says, “I wish I was a software guy. Software is eating the world, they're getting all the risk back.” I walked through San Francisco; they think anyone who doesn't have software in their veins is a sucker. John: I asked the same thing to myself, you know. I was running ads, I'm like why can't I just run ads straight to the offer? Why do I have go to these info products? I want to get on the soft…. And then I was like, I feel like it's kind of like marriage. Like it's a big thing to say like, “You probably already built websites, but come over, drop everything you're doing and come over here and build websites over here on our thing.” And it's like, that's a hard pull. But “Hey, you want to build webinars? Here's a little thing for $5 to build webinars.” Now you're in our world, now we can talk to you, now you can trust us, now we can get you over there. Andrew: Got it. Okay, and if that's what it takes to get people in your world, you're going to accept it, you're not going to feel too good for that, you're just going to do it and grow it and grow it. John: Yeah. Andrew: What's your ad budget now? See now you're eyes are lighting up. Now I tapped into it. John: We spend about half a million a month. Andrew: half a million a month! John: Yeah. Don't tell the accountant. Andrew: Do you guys pay with a credit card? Do you have a lot of miles? John: Yeah, we do. In fact…. Andrew: You do! How many miles? John: In fact, the accountant came into my office the other day and said, “Next time you buy a ticket, use the miles.” Andrew: Are they with Delta, because I think you guys flew me out with Delta. John: Yeah, American Express is where we're spending all our money. Andrew: Wow. And you're a partner too? John: Yeah. Andrew: Wow, congratulations. John: Thank you. Andrew: I don't know you well enough to ask you if you're a millionaire, I'm just going to say congratulations. Give him a big round. John: Thank you. Andrew: Wow, you know what, I actually was going to ask the videographers to come up here. I wrote their names down, I got the whole thing and I realized I shouldn't interrupt them, because they're shooting video. But I asked them, why are you, they had this career where they were flying all over the world shooting videos for their YouTube channel. I'm sorry, I forgot their name, and I don't want to leave them out. Russell: Dan and Blake. Andrew: They were shooting YouTube videos, they were doing videos for other people. I said, “Why are you now giving it up and just working for Clickfunnels all the time? More importantly, why are you so excited about it?” And they said, “You know, it's the way that we work with Russell.” And I said, do you remember the first time that you invited them out to shoot something? What was it? Russell: It was the very first Funnel Hacking Live we ever had, and probably 2 weeks prior to that, one of our friends had an event and Dan had captured the footage, and he showed me the videos. “Did you check out my Ven Video?” I'm like, “Oh my gosh, that was amazing.” And I said “Who did it?” and he told me. So I emailed Dan and I was like, “Hey, can you come do that for Funnel Hacking Live?” And he's like, “What's Funnel Hacking Live?” So I kind of told him, and he's like, “Sure.” And it was like 2 weeks later and he's like, “What's the direction?” and I was like, “I don't know, just bring the magic man. Whatever you did there, do that here.” And that's kind of been his calling card since. He just comes and does stuff. Andrew: Bring the magic. He wants to have those words painted on the Toronto office you guys are starting. Literally, because he says you say that all the time. And the idea is, I want to understand how you hire. The idea is, “I'm going to find people who do good work, and I'm going to let them do it.” What happens if they wouldn't have done it your way? What happens if it would have gone a different direction? Russell: I see your question, and I'm not perfect. So I'm going to caveat that by, some of the guys on my team know that I'm kind of, especially on the design and funnel stuff, I'm more picky on that, because I'm so into that and I love it. But what I've found is when you hire amazing people like Todd for example, doing Clickfunnels. The times I tried to do Clickfunnels prior, build it was like, me and I'm telling developers, “here's what to do and how to do it.” And like there's always some loss in communication. With Todd, he's like, “I know exactly what I would build because I want this product too.” And then he just built it and he showed me stuff. And I'm like, “That's a good idea.” And he's like, “I did this too.” And I'm like, “That's a good idea.” And it's so much easier that way. So when you find the right people, it's not you giving them ideas, it's them coming to you with the ideas. And you're like, “that is a good idea. Go do it.” And it just makes, takes all the pressure off your back. So for us, and it's been fun because I look at, man, the last 15 years of all those different websites and the ups and the downs, the best people have always stuck. So we've got 15 years of getting the cream of the crop. It's kind of like, I'm a super hero nerd, but it's like the Avengers, at the end of, when Clickfunnels came about we had this Avenger team of people. And we're like, now we've put in our dues, now it's time to use all of our super powers to do this thing, and it all kind of came together. Andrew: Build it and build it up. And then as you were building it up, you then went to Sales Force. You guys invited me, you said, “Hey Andrew, we're in San Francisco, you're home town. Do you want to come out?” I said, “I'm going to be with the family.” And you said, “Good. Being with the family is better than hanging out with us.” But I still said, “What are you guys doing in San Francisco at Sales Force?” Because sales people don't need landing pages, yet you guys will probably find a way for them to need it. Then I saw this, this is the last video that I've got. There's no audio on it. I want you guys to look at their faces as they're looking up at these buildings, walking through the Sales Force office. Look, they're getting on the motorcycles in the lobby. They're looking all around like, “Oh gee.” Counting the buildings that are Sales Force labeled. Look at that! What are they doing? Not believing that this is even possible. And then just stopping and going, this is dream force. This is your dream. What did you get out of going to sales Force's event and seeing their office? Russell: Honestly, prior to Sales Force, I was kind of going through a weird funk in my business, because it was like, again there was the goals. So it was like, okay, we're going to do a million bucks, and then we did that. And then it's like, let's make 10 million a year. And then 50, and then this year we'll hit a hundred. And like, what's the next goal?  A billion, because a hundred million, 2 hundred million is not that big of a difference. And it was just kind of like, what's the point, what's the purpose? We've grown as big as any company that I know. And then last year, Dave and Ryan had gone out there and they were telling me stories like, “There's 170,000 businesses here.” And they were telling me all these things, and it sounded cool, but I didn't, and they were going crazy. You have to see this so you can believe it. But there's something about the energy about seeing something that makes it real. So this year I was like, I want to go and I want to see Benioff speak. I want to see the thing, the towers, I want to just understand it, because if I understand it, cool. Now we can reverse engineer and figure out how we can do it. So for me it was just like seeing it. I think in anything, any, as entrepreneurs too, if you're people believe that you can do it, you'll do it. If you believe you can lose weight, you'll lose 3eight. If you believe you can grow a company, and I don't feel like I believed that the next level was possible for us until I saw it. And then I was like, oh my gosh, this is not ridiculous. Benioff's not, none of these guys are any smarter than any of us. It's just like, they figured out the path. It was like, okay let's look at the path. And then let's look at it and now we can figure out our path. Andrew: And seeing it in person did that for you? Russell: Oh yeah. It makes it tangible, it makes it like, it's like your physiology feels it, versus reading a book about it or hearing about it. It's like you see it and you experience it, and it's like it's tangible. Andrew: I told you, I asked people before they came in here, “What are you looking for?” and a few of them frustrated me because they said, “I just wanted to see Russell. I just want to see the event.” I go, “Give me something I could ask a question about.” But I think they were looking for the same thing that you got out of there. And I know they got it. I'm going to ask them to come up here and ask some questions, and I want to know about the future of Clickfunnels, but first I've got to just acknowledge that, that we are here to just kind of pick up on that energy. That energy that got you to pick yourself back up when anyone else would have said, “I'm a failure of a husband, I can't do this.” Go back. The tension that came from failing and almost going to jail as you said, from failing and succeeding, and failing again. And still, that is inspiring to see. I want to give the whole Clickfunnels family a big round of applause, please everybody.

Ann-Marie Kong, Coaching Social Justice Trauma Dr. Dave: (singing) Hello, and welcome to the KnolShare with Dr. Dave Podcast. I am Dr. Dave Cornelius, your host. My conversation today is with Ann-Marie Kong. Ann-Marie, how are you today? Ann-Marie: I'm good, thank you, Dr. Dave. It's a delight to be here today. Dr. Dave: Yeah,… The post EAFH43: Ann-Marie Kong, Coaching Social Justice Trauma appeared first on Leaders share how-to practices - KnolShare with Dr. Dave Podcast on GrokShare.com.

EAFH34: Michael Spayd talks Systemic Consciousness and Systemic Racism Dr. Dave: So, welcome to the KnolShare with Dr. Dave Podcast, Michael. I'm just so excited to have you today for our conversation about The Social Justice Center's impact, especially in the Agile community. Michael Spayd: Thank you for having me, Dave. Dr. Dave: Yeah, I'm just… The post EAFH-34: Michael Spayd Talks Systemic Consciousness and Systemic Racism appeared first on Leaders share how-to practices - KnolShare with Dr. Dave Podcast on GrokShare.com.

Do you ever pay much attention to your feet? Our feet are our first point of contact with the ground, and we walk around on them all day. But most people just wear shoes and call it a day. And if you’re a runner, then all the more reason to maintain good foot health! So how do we take care of our feet? Dave Liow, an exercise physiologist and holistic movement coach, joins me in this episode to discuss feet and how to optimise foot health. We talk about some common foot conditions, and he also shares advice on selecting the right shoes and improving foot mechanics. For runners and everyone else, don’t miss this episode and learn how you can achieve good foot health!   Get Customised Guidance for Your Genetic Make-Up For our epigenetics health program all about optimising your fitness, lifestyle, nutrition and mind performance to your particular genes, go to  https://www.lisatamati.com/page/epigenetics-and-health-coaching/. You can also join their free live webinar on epigenetics.   Online Coaching for Runners Go to www.runninghotcoaching.com for our online run training coaching.   Consult with Me If you would like to work with me one to one on anything from your mindset, to head injuries, to biohacking your health, to optimal performance or executive coaching, please book a consultation here: https://shop.lisatamati.com/collections/consultations   Order My Books My latest book Relentless chronicles the inspiring journey about how my mother and I defied the odds after an aneurysm left my mum Isobel with massive brain damage at age 74. The medical professionals told me there was absolutely no hope of any quality of life again, but I used every mindset tool, years of research and incredible tenacity to prove them wrong and bring my mother back to full health within 3 years. Get your copy here: http://relentlessbook.lisatamati.com/ For my other two best-selling books Running Hot and Running to Extremes chronicling my ultrarunning adventures and expeditions all around the world, go to https://shop.lisatamati.com/collections/books.   My Jewellery Collection For my gorgeous and inspiring sports jewellery collection ‘Fierce’, go to https://shop.lisatamati.com/collections/lisa-tamati-bespoke-jewellery-collection.   Here are three reasons why you should listen to the full episode: Find out how to take better care of your feet. Discover the benefits of going barefoot. Learn how to select the right shoe for you.   Resources Holistic Movement Coach on YouTube The HMC Footy Show, foot exercises on YouTube How to start looking after your feet on YouTube Exercises for bunions on YouTube Holistic Movement Coach website   Episode Highlights [03:29] Why Feet? When he started looking at movement, Dave noticed that the feet were one of the areas trainers had no idea about. People have 28 bones in the feet and 55 articulations from below the knee. Over a third of the bones here are in the feet, which tells us how important they are. It’s an area largely being neglected by movement experts and professionals. [05:45] What Shoes Do to Our Feet So much space in the brain is devoted to our feet and hands, and if you walk around with sensory deprivation chambers on them, you’ll lose that space. The bottom of the foot (plantar fascia) is extremely precarious, full of reflectors that send information to your brain about how you’re moving and interacting with the ground. By wearing shoes, we break that link. [09:56] Improving Foot Mechanics and Foot Health Keep your feet out of shoes as much as possible. Whenever Dave has the chance to go barefoot, he does. By going barefoot, you are giving as much information to your feet as you possibly can. Shoes provide a lot of support for your feet. Not wearing shoes will improve your feet’s strength. A healthy foot is a mobile foot. If you can’t do a lot with your toes, it shows you need to do some conditioning on your feet to make them smarter and stronger. Plantar fasciitis is one of the most common foot problems runners encounter. Listen to the full episode to learn more about some of the most common foot conditions! [17:21] Bunions and How They Affect Your Foot Health The exact cause of bunions is up for debate, but there is certainly a genetic and environmental component to it. A bunion is when your big toe starts to go in and some calcification forms around the joint. Bunions cause compressions in the foot, leading to problems in the nerves between the bones of your foot. There should be adequate space between your toes, allowing your foot to move and breathe. This also applies to your footwear—your shoe should have a wide toe box to give your toes enough space. You can do foot exercises for bunions to prevent the need for surgical treatment. [24:10] How to Deal with Plantar Fasciitis Typically, people who have plantar fascia issues will feel the bottom of their foot locked up, especially in the morning. Increasing your running distance too quickly and incorrect foot mechanics are common causes of plantar fasciitis. Icing the foot takes some of the pain away. Applying light pressure on the affected area can hydrate the tissues and make them healthier. Adding the right kind of load to it will help line up the fibres and make it strong again. Movement issues can disappear if you keep your body balanced. [29:55] On Running Shoes Dave and Lisa talk about a shoe that reportedly takes 4% of your running time. More track records are broken lately due to the improvement in the technology used to create running shoes. These new shoes are all about sports and performance, not health. There are different types of shoes for different purposes. Being barefoot all time can also cause issues because what goes on your skin can absorb what goes on it. [37:11] The Truth about High Heels When you add an incline to your heel, it lifts you and pushes you forward, breaking your kinetic chain. To avoid falling on their faces, people who wear high heels adjust by pushing their posture forward and arching the lower back more. When you’re in high heels, you’re effectively pointing your toes. This shortens the calf muscles, which can end up reducing the motion in your ankle, pulling you into pronation, and collapsing the arch. Wearing high heels often can change the way your muscles work. [44:21] Supplementation for the Cartilage and Joints Dave reads up on what he thinks is useful and what’s not, and he uses it on an individual basis. A decent multivitamin is a good place to start. Dave is a fan of probiotics and fish oil. However, if you’re sensitive to histamine, do your research first before taking probiotics. He also recommends working fermented food like kimchi and sauerkraut into your diet if it suits you. [51:08] Dave’s Take on Orthotics Dave thinks if you have a foot without a structural issue or a neurological deficit, you can do without orthotics. Orthotics provide support and are often prescribed to block motion. Foot mechanics change when you have your foot on the ground versus in the air. A lot of the mechanics that are put into orthotics aren’t done in a closed chain, which changes the whole way the foot works. If you think you may need an orthotic, consult first with someone who knows how they work and can give you proper advice. Dave takes a holistic approach when it comes to foot health [1:00:06] Dave’s Experience with Reflexology There are different types of reflexology, but it’s often associated with feet. The idea is your body is represented in smaller areas of your body that you can access. Dave has tried reflexology on himself, and it worked well. He particularly had some good results with the sinus points around the toes, which help to clear the sinuses. He finds it relaxing, because looking after your feet is looking after your whole body—it’s all connected. [1:02:52] How to Select the Right Shoe Be careful of the marketing of shoe science. In reality, it isn’t the shoe that makes the difference. Pick a neutral shoe that feels good. Research shows the more comfortable your shoe is, the more efficient you are. Get the lightest and the most minimalist shoe that you are happy with.   7 Powerful Quotes from This Episode ‘I’m constantly dumbfounded by how little care people have taken on their feet’. ‘The foot and the ankle are a huge player in my model and certainly one that I think having a very big impact on how people move well’. ‘Shoe choice doesn’t start and finish when you’re done running—it’s throughout the day’. ‘Be careful where you expose your feet to because it will go in you and then we'll take it into your health. There's time and place for everything’. ‘It’s not about speed and power… It’s keeping everything as best as you can in optimal performance and stopping things before they fall down the cliff and being in that preventative space’. ‘If you think you can get everything out of your diet, even if you’re eating organic, you probably can’t… So certainly, some supplementation is useful’. ‘It’s not the shoe that does the running; it’s the person that does the running. Technique and conditioning and looking after yourself and your health has much more effect than a shoe ever will’.   About Dave Liow Having mentored many coaches and trainers in New Zealand and Australia, Dave Liow is following his passion for sport and health and love for teaching. As a health professional, exercise physiologist and the founder of the Holistic Movement Coach Programme, he is constantly striving to find ways to be healthier and move better. You may connect with Dave on LinkedIn or Facebook. You can also visit his website or watch his YouTube videos to learn how to take better care of your feet.   Enjoy the Podcast? If you did, be sure to subscribe and share it with your friends! Post a review and share it! If you enjoyed tuning in, then leave us a review. You can also share this with your family and friends so they can know how to achieve good foot health. Have any questions? You can contact me through email (support@lisatamati.com) or find me on Facebook, Twitter, Instagram and YouTube. For more episode updates, visit my website. You may also tune in on Apple Podcasts. To pushing the limits, Lisa   Full Transcript of the Podcast! Welcome to Pushing The Limits, the show that helps you reach your full potential with your host, Lisa Tamati, brought to you by lisatamati.com. Lisa Tamati: Hi everyone, and welcome back to Pushing The Limits this week. So I have two guests. Dave Liow this time. Now Dave is a repeat offender on the show, and I love having him to guest. He is one of my great mentors. And I hope you're gonna get a lot out of today's session.  Today, it's all about feet or so. This is one for the runners out there for sure. But also for just optimizing your foot health and also the whole kinetic chain, your feet where you connect with the ground obviously, and it affects your whole body. So we go to a deep dive into looking after yourself in regards to your feet. For the runners out there, it's all about playing for charters and bunions and picking the right running shoes. But there's also a whole lot of need for people to just have—want to know about good foot health.  Before we head over to the show, Christmas is coming. So if you want to grab one of my books, or one of my jewellery pieces, I’ll love that. You can head over to lisatamati.com. All the things are on there. And we're gonna be having a little break over the Christmas period. Maybe one, maybe two weeks from the show. I'm not quite sure at the stage, depending on the team's requirements over that period. So I hope you do have a good time of the Christmas. If you're listening to this afterwards, I hope the New Year's starting off really well for you. Before I go over to the show, just a reminder, I do have a couple of places left. We're nearly full on our one-on-one consultations, health optimization coaching. If you have a problem that you'd like to get help with, whether it's a high performance, whether you're a top athlete and wanting to get to the next level, whether you're wanting to work on your mindset, or maybe you've got a really complicated health challenge that you're just not getting any answers for, or you're having trouble sifting through all of the information and getting the right stuff—then please reach out to me, lisa@lisatamati.com. Right. Now over to the show with Dave Liow from the Holistic Movement Coach.  Lisa Tamati: Well, hi everyone. Welcome back. Today I have the amazing, the incredible, awesomest, Dave Liow on the show. Dave, welcome back, repeat offender.  Dave Liow: Hi Lisa. Lisa: I'm super stoked to have you today. Dave Liow: For the podcast you mean, right? Lisa: You’re a repeat offender for the podcast. Coming back to give us more. Not an offender in any other way.  Dave is an expert that I've had on before and he's definitely one of my mentors. And he's been to—Neil, my business partner for many years. And he is a mentor to many of the coaches and top trainers in New Zealand and Australia. So that's Dave's background. And you've got a background in physiology, don’t you Dave? Dave: Yes.  Lisa: You have a company called the Holistic Movement Coach. And will you—we're going to talk today about feet. People are like, ‘Wow, that's really interesting topic to talk about’. But it is. It's really, really exciting. Last time we had you on the show, we talked about the science of life, and that was one of the most popular episodes. So I'm really…  Dave: Great! Lisa: …happy to have you back on and to share some more of your absolute amazing wisdom. So today we've picked feet. What are we gonna to talk about, Dave? What are we going to share about feet and what you need to be aware of? Dave: Well feet’s one of those interesting ones. So from—as a movement professional, which is really my background. Though, being a holistic movement coach, if you just look at movement, you're gonna come unstuck pretty soon. So when I started looking at movement though, one of the things that I noticed that was one of the areas that were neglected were feet.  So we're seeing or looking at people's lumbar spines all the time and come to wideness not losing link from the top of the head. But a lot of trainers and movement professionals weren't even looking at people's feet. They had no idea what was going on, underneath those shoes of theirs. So for those of you who might think about maybe the back, whatever. Imagine if someone was wearing a big potato sack over their whole body, and you couldn't see where the spine was at trying to train them. So trying to work with someone and get them to move well without looking at their feet is to me just crazy.  Lisa: Yes, nonsensical. Dave: Yeah. And we've got 28 bones in the feet. So 28 bones, and we've got 55 articulations from below the knee. Lisa: Wow. Dave: So over a third of the bones are in the feet there. So that tells you about just how important that area is there. We have a look at the muscles that run down below the knee too. We've got 50 muscles. So added it, 276 ortho muscles, I think that's about right muscles. We have 50 below the knee so that shows you just how important there is. And it's an area that I think has been largely neglected by moving professionals. Lisa: Yes, it makes the total amount of sense. And we are on them all day, and we just shove them in a pair of shoes. And sometimes those shoes, you know, like ladies' high-heeled shoes, and tight shoes, and badly shaped shoes and don't do a lot barefoot—going out barefoot. Let’s start there, let’s start like—what does shoes do? When we put a pair of shoes on our feet? What sort of things are we taking away from our brain? Like, I always liken it to going around with a pair of gloves on my hands all day. I'm not going to be able to paint a picture and initiate anything, am I? Because I've just taken away all my proprioception and my ability to coordinate those fine motor controls with my hands. So we get that sort of analogy but actually, we do that to our feet all the time. Dave: And that's a wonderful analogy, Lisa. And so the representation in your brain of your body is called homunculus. So your brain has representations of all your different body parts. And some body parts are represented very, very—have a very large representation in the brain because they may have a lot of sensation and require a lot of fine movement.  So there's a huge representation in your brain of your face because if you look at the number of expressions you can do, and the articulations you can do with your tongue, your lips—there's a lot of area in the brain devoted to the face. Same with the hands as well. So you look at the fine movements you can do in your hands, isn't it? And how pink your hands are say compared to your elbow. It's incredible how much space in the brain is devoted to the hand.  Now one other is the feet. The feet have a massive representation in the brain as well. But with that, though, we know the brain is plastic. It can evolve and it will adapt to whatever environment you're putting it into. If you're walking around with that, the gloves on your hand, or in this case as one of my mentors Phillip Beach would say, ‘With sensory deprivation chambers on your feet’… Lisa: Wow. Dave: ‘…you will lose that representation in your brain’. And the bottom of the feet is extremely propiocept. Isn’t it? So many on that plantar fascia, that part of the foot there, is full of receptors which send information up to your brain. Giving you information about where you are, how you're interacting with the ground, and how you're moving. And without that, and by breaking that link there, there's a price to pay. Lisa: Yes, yes. And we just willy nilly wear shoes from the day we're born, pretty much. And if we're lucky in childhood, we might have run around bare feet a little bit. But most of us have got his feet and shoes all day. So you're saying that the—what did you call it? the munculus? Dave: Homunculus. Lisa: Humunculus? Dave: Homunculus.  Lisa: I never heard one before. I did, like, hear the representations. Like I don't know where I picked this up, some podcasts, some ways, something. If you have two fingers that you tape together for say a month. Dave: Yes. Lisa: When you untape them, you are unable to move them separately because the brain has wired them as being one unit. Another example of this is where people—they lose a limb. The brain still has the representation of that limb, even though the limbs are gone and they feel the pain of that limb. And this is like, the brain is like, ‘Hey, why? Where's my arm gone? Where's my leg gone’? or whatever.  And we're doing this to much lesser degree but when we don't need our toes and our things wiggle and wobble and do the proprioception. Okay, and we can improve our performance. Now, as runners are listening to us, let's talk about a little bit why this is important for runners to be able to sense the grounds and have good proprioception. So what are some of the advantages of having good—taking good care of our feet and maybe going bare feet a little bit. Dave: Oh, massive. One of my buddies, one of the things he has around feet—he has a lot of background in horse training. And he says, ‘No foot, no horse’. If you have a horse which damaged his hoof, then that's pretty much the end of that horse. They can't do a lot. And for you being an ultra-runner, Lisa, I'm sure you understand when your foot goes wrong.  Lisa: Oh, yes. I'm in trouble.  Dave: Yes, you are, you're in a lot of trouble. So I'm constantly dumbfounded by how little care people have take on their feet. I work on my feet every day without fail.  Lisa: Wow.  Dave: I'm certainly not an ultra-runner. I'm not the same class as you guys. But the amount of care that I take on one of my major movement teachers… I know this time when I lift… Lisa: So okay, what are some of the things that you would do to improve your foot mechanics and your proprioception and stuff? I mean, obviously, it's a little bit difficult with our podcasts and we can't show. I’ve got some video but… Dave: So there's that saying, ‘use it or lose it’. If your foot’s in a sensory deprivation chamber, you're gonna lose it pretty quick. So I like my foot to be out of things as much as possible, though... Lisa: Like right now? Dave: Yes. Quite a surprise, no shoe. Yes, I don't really wear shoes much. I wear [10:14 unintelligible] more than other shoes. If I'm running off-road, I'll certainly—and on concrete—I’ll wear some shoes. And we'll kind of talk about the shoe design a bit later on. But whenever I can go barefoot, I will. So if I can give as much information to my feet as possible—that's going to keep them smart, but also gonna keep them strong because shoes add support. That's what they are.  Lisa: Yes. Dave: You will not believe how much support shoes add. And you'll notice when you take them away, if you try and run barefoot, if you've been wearing sickly shoes with a lot of stability that added in there. So by going barefoot a fair amount of time, you get a very strong foot as well. So that doesn't come down to running shoes. And I guess we'll talk about running shoes in a bit.  But if you're wearing running shoes all day, even when you're not running, well, you're adding support there 24/7. I understand that some people might want more support when you're running, when you've got high forces going through your feet, but walking around and running shoes all day or highly-supportive shoes. You're basically walking around with. Lisa: Crutches. Yes, and making yourself lazy. You're making yourself lazy. Yes. Dave: Yes, right. So you're certainly going barefoot as much as possible. Now I do a lot of work at night to make sure that my foot’s mobile. A healthy foot is a mobile foot. So one of the things that they’ll often say is ‘the foot is not a hoof’. A hoof is rock solid and hits the ground and off the coast. So look at what you can do with your hand. Okay, you should do an awful lot with your toes as well and get them moving. So if you've lost the ability to do that, it really shows that you need to do some conditioning work on your feet and get them smarter and stronger.  Lisa: And if you don't, this is where some problems come up. If you can wiggle your toes and all that sort of stuff, you can prevent issues like yes—let's look at a couple of a common running problems that people get. Things like plantar fasciitis is a biggie, or even going up the leg a little bit. Like shin splints, and the problems in the calf, in the Achilles. Are these coming from the feet at all? Dave: Well, they’re coming from running. And there's some sort of mechanics going on there. But think of the foot, that's your first contact with the ground. When that goes wrong, everything in the chain will [12:37 unintelligible]. And if we think about something like a marathon, you've got 30 to 50,000 impact on the ground. That's a lot of race. So something's going wrong. This repetition over and over and over again. That's gonna end up breaking you.  And we're talking about forces, which you can't—two to five times your body weight depending how you're running. Now that’s a hell of force, a hell of a repetition. If something's not working right there, you will pay the price. Will you pay that price? Well, it depends.  But if we look at running injuries, straight off the top. Probably 15% of those will be at the knee. So the knee is normally the one that pays the price. But you know, I often say this in my lectures. Knee’s a dump. I knew that they kind of extracted and they've been—they have a little bit of rotation. But you see that one too much. And they have a little bit of sideways motion, but you don’t want too much of that either. So the knees are dump. So it's not only the knees fault that the knee gets some problems. It's normally the foot and ankle, or it's normally the hip, that's normally where I'll go.  And if you're a runner and you're getting knee pain, I'd be looking at either the foot and ankle. After the foot and ankle I will be looking at their hips straight away. There's something going wrong in those areas there. So about 50% of people will get knee pain more common in females than males by a long shot. Now, we look at kind of around, kind of Achilles as well. That's another area that can get a fair bit of problems as well. That's probably around… Lisa: That's mum, as usual. Ringing in the middle of the podcast. Dave: Calling mum. So around 10% of people get Achilles issues. That's another really common one and that's more a male thing. So that's the case, the 40 plus male is that actually the shoe. But then you'll get your IT band and touch that, which is probably around like 5% of the injuries. [14:32 unintelligible] can be in the foot or your tibia as well. And that's probably around 5% too.  So those are the main injuries. You'll see that getting running back, but knees if I was gonna go after one injury in running, knees are normally the one that pay the price. And there's certainly a big relationship between the foot and the knee. Ginormous. Lisa:  Right. So it's not always go up. Mechanics of the knees is the actual problem is down, or above, or below.  Dave: Yes. Almost always. Unless you've had an impact at the knee? Yes, you can treat the knee and always look at knee because if people come and see you for a knee injury, if you start playing the beat straight away, they'll go, ‘Well, hang on’.  Lisa: ‘What's this going on’? But it does make sense that the kinetic chain and the linking together and trying to find out where the original problem was coming from. Not just where—because like Neil's always said to me, ‘You know, like, if you've got a problem with your ankle, it can affect your shoulder’. And I’m like, ‘How does that work’? You know? Dave: Absolutely. Yes. Where it goes, nobody knows. Lisa: And how do you trace it back? How do you trace up a back problem to the ankle? Or the piriformis? Dave: If you know what it should look like and it doesn't look like what it should look like, well, what happens if you change and make it look more like it should? How does that change things? And that's normally in a nutshell the approach that I'll take. I guess that’s where you need to have a reasonable reference library of saying that, nothing more than my fair share of runners. And I'm sure you have too. I mean, if you feel someone running down the street, now you go, ‘That's not a very experienced runner’, or ‘Oh, boy, that's very experienced runner’. Well, you know that because you've seen so many runners.  So having that, I guess, experience in that database to draw from, and then understand the mechanics, and really add into it what you got. And I know what you gotta do in your Running Hot business. Well, you understand your body and you understand running technique, you can put that together and solve some wonderful problems.  Lisa: Yes, absolutely. But it is like a bit of a counterintuitive thing. I had a guy like, ‘Oh my piriformis’. Like Neil said to me the other day when he saw me, ‘Oh my God. Your bunions are getting really out of control. We got to do something about that’. And I'm like, ‘Oh, is it’? Sometimes you don't notice the things because you're just seeing them every day. You know? So let's talk about—let’s say some specific type of things that we are looking at. So let's look at bunions for that. What are bunions? And what effect can they have on the mechanics of your feet and up the body? Dave: Yes. So bunions—the quarter bunions is up for debate. There is certainly a genetic component to it. So either your mum probably has bunions. I guess. Lisa: Yes. Yes. Yes, you're right on money.  Dave: But that there’s also a big environmental part to it as well. So bunions, when your big toe starts to go in, then you'll end up with normally some calcification around that, well, that first joint—the joint in the big toe—that's probably a better way of saying it, around there as well.  What that does too is compresses the foot. The big toe goes sideways compared to it goes to the next [18:02 unintelligible], that compresses the foot, as well. So we get a lot of compression in that foot. They cause a number of problems. In between those bones in your foot. You've got a lot of nerves that run through there. So when those toes get compressed together, those nerves can get very irritated. Next, become very, very painful.  So and probably just as a little sideline here, if you were to pop your hands just in front of you there—if you're driving a car, listen to this, it's probably not such a good idea. But try this later on, you just put your hand down and look at your hand. So notice the space between your fingers there, that you put your foot down and have a look at your foot, you should also see space between your toes as well. Spacing’s really important to allow that room for the foot to move, to breathe. And also to get those space for all those straps in your foot to go. Lisa: And that’s with you naturally just having the foot there and not trying to spread them but just... Dave: Just naturally you should see space between your toes.  Lisa: Oh, wow. Dave: That you see a nice wide foot there. I love it. I love a good wide foot. Yes, so compression in those toes. And that can be a footwear choice thing too. So if you have shoes, and we've talked about toe box, that's the front part of a shoe. So we go out the toe box, this area through here. So the step front pair of shoes give a wide toe box in a shoe design that lets the foot spread out versus one that narrow and pushes the toes together. Lisa: Gosh. I should know about that. Yes. A lot of the shows that I get, I get sponsored by some brand or whatever. And then like I couldn't wear them.  Dave: Yes, the kiwi foot. Yes, and also this is a column that does this as well.  Lisa: Yes.  Dave: And with me, I've got a nice wide foot. I will not wish you for the narrow toe. It caused me nothing but problems. So footwear choice can be one of the things they also drive a bunion.  Now the other part too is that, when you've got that big toe and that big toes moving sideways, rather than going through the foot, you will often go inside the foot and fall into it. You get more pronation than what you normally have. So we lose the arch of the foot because the way the foot’s designed to move is your desire to move through and move through the big toe.  So, when we talk about the cycle of walking and running, we even have a phase of that called toe off. Because that's a really important part with a big toe pushes off. So if your big toe is going sideways, it's going to be—when you can't go through the toe, we’ll have to go around the toe. And that will cause a lot of wear and tear that can, after a while, that will start to break that foot down.  Now that may require you to drink, unless you do some exercises. In Sydney, we have some real bunion experts and my team, some of my guys love working with bunions. And you can certainly bring that foot back if you have surgery to repair bunions. So if you don't do the work, well the same thing is going to happen again. You just go straight across and they'll end up having to cut your foot open. Lisa: Yes, yes. Dave: My mum had bunions. But I gave her a little exercise program, and I'm pretty sure that's on my—that may be on my YouTube channel.  Lisa: Okay, we might get the link off here.  Dave: And yes, if not, I'll put it on there. And yes, she had some exercise to do for bunions. Her bunions pain disappeared and my mum's in her 70s. So you can certainly reverse that and have her feet are straighter. I’ve had some people come back from their podiatrist and I go to say, ‘What the hell have you been doing? What have you been doing? Keep doing it. Because your toes are straightening, and your foot in better condition’. Lisa: So you can sometimes avoid surgery. Wow, that's pretty amazing. That's pretty amazing. Dave: Well, and even if you have surgery, if you don't do the follow up, you're gonna end up having it again. It’s a huge amount of work with a huge amount of things you can do to help out your bunions. Lisa: Okay, that's really good because I have—got a very neglected bunion. I've always like, ‘Oh, it’s not causing me major troubles yet’. You know? Now I'm thinking, ‘Shoot. I need to address it’, because it's getting, like, Neil noticed that last time I was with him, it's getting worse. And I'm, ‘Oh, this is it? I thought it was the same old, same old’. Neil exclaimed no. And I've got troubles with piriformis. And I'm like, ‘I've been looking at piriformis trying in working on that’. And that could be, could be, could be, might not be, could be a knock on the feet there. Dave: So thinking about how that could relay. If you've got that bunion here, and your foot’s falling into pronation and it’ll take the knee with it, and it will take that whole hip and will rotate in and everything will rotate in there. What stops it? Well piriformis can stop that. So if piriformis is having to make up for a foot function issue there, well, that's worth working.  If you release piriformis, and get that guy—well, now you've got nothing holding your foot together. So where's that guy next to the public often deal on the spine? That's probably where we're going next. And then it could be somewhere else too, or it could travel to the knee. Lisa: Yes.  Dave: So, you know, we talked before about finding the source. Fixing the foot would be a really useful one. And if you're still on your feet, a fair amount, which knowing who you are, you certainly want that contact with the ground. Lisa: Yes. Yes. Yes. Dave: Sort it out. Lisa: Like paying attention to the little changes that are happening in your body because sometimes you think, ‘Oh, no, you know, it's all the same’. And then you don't see changes in your own body when you don't, when you see yourself every day, or your loved ones. Or sometimes you just like got your own little blind spots. Okay, so if we can dig that video out, we'll put that in the show notes for sure.  Let's talk about plantar fasciitis because this is a major problem. One of the most common running problems, especially the people who have up the distance very quickly or done some things here, what is plantar fasciitis and what can we do to deal with it one? Dave: So the left part of fascia is a layer of fat or connective tissue that goes right along the bottom of the foot. And as I mentioned before, that has a lot of receptors on it. So it's very rich in receptors, though can get extremely painful. And typically people who have plantar fascia issues will get out of bed and they'll try to put their foot down, and take a snack, or walk, and start walking, and the whole bottom their foot will be locked up. It'll take a while for that to loosen up so they can use that foot.  More often, you'll get that around the front of the heel, so none of them pointed the heel back in towards the centre of the foot. And sometimes that'll run up in bands as well. Now, the change in volume too quickly is your number one culprit which you mentioned. And that centre area. But certainly some foot mechanics can also have an issue there as well. So the plantar fascia is—in your foot, you've got well, definition you got 50 muscles that run below their knee—all could help control that foot. Your plantar fascia is there, it winds up, and plucky when you bend your big toe. It helps wind up that panic factor to help make the foot rigid to make it to leave so you can push off it.  That's one of the—there’s sort of two main functions of a foot. The first one is to allow the foot to splat is my technical term. Hits the ground and conforms to the surface that it goes to, number one function. Second one is it becomes a rigid lever so you can repel off it. Well, that's pretty much what a foot does. If you have kind of with a narrow down.  So we've got an issue there with that timing between backing and becoming a rigid lever. And the plantar fascia is wearing it somewhere there. Now there's—we can look at the plantar fascia, and you can try and treat the plantar fascia. But there's a lot of layers of muscles and a lot of timing that happened before that plantar fascia that’s been beaten up. So there's something gone wrong with the timing of how you're going from flat to rigid lever that's causing that.  And particularly if you overload into that. So if you've increased your volume too much, that's often the last well, kilometre, or 1000 footsteps that broke the camel's back. So I want to look at what's happening with the ankle and the foot, and I'm always interested in the big toe when it comes to plantar fascia. Lisa: Right, so that's your big lever. Point, really big toes when you push off and you get that elasticity sort of wound up. Dave: Massively important part that big toes. The amount of bones you have in that big toe, and for those of you with bunions, or pinchy injuries in that big toe joint as well. That's a really important one to get looked at. That can have a massive effect on everything up the chain.  Lisa: Wow. Yes. And what can you do about it? Are there some exercises that you recommend? Like, you might have fascia release, you make your ball rolling, that type of thing for the actual plantar fasciitis itself, the stretching and icing, and all that jazz? Dave: Icing can be nice, and that takes some of the pain away because it’s very painful. Having some light pressure in those areas too can help hydrate the tissues and get them healthier again. Because during—if you have some sore spots in their plantar fascia, often they won't have the hydration and the movement, because it's still layers and layers of tissue. Now, if you can get those moving better and hydrated, that will heal better.  Adding some load to it can be useful too, you just need to be careful where you are in their injury spectrum. But it actually does require some loading because the loading will help actually line up the fibres and get that strong again. But it needs to be the right type of loading starting slowly and building up. That sort of mechanics. In big toe, you'd be wanting to have a look at and also what's happening with the ankle. Check that you've got enough dorsiflexion to get into more. How much can you bring your ankle? If you've got a restriction on the ankle and a restricted big toe, your plantar fascia—well, everything in the foot but the plantar fascia, may end up wearing that one. Lisa: Yes, yes. And there's a couple of tricks to do with the dorsiflexion that I can link to another video there that Neil's done. Where you can push that—I’ve forgotten it—talus bone. Where you pushing it back into—because sometimes there’s some sort of a line. Yes, this one,  this one. Trying to find the words. Dave: Restoring their ankle dorsiflexion will be critical. I think that the foot and ankle, I'll look at three main zones in the body. In terms of my model for looking at movement. If you get the torso moving really well, that's very important for rotation. If you're running, you get the pelvis and hips moving really well, that would be my second zone. And the third zone would be the foot and ankle. So if you can get those three zones working well, normally I take 85% of the movement issues will just disappear. Right? And so the foot and ankle are a huge player in my model, and certainly one that I see having a very big impact on how people move well or done don’t move well. Lisa: Yes. Now, that's really good. So the torso, the pelvis, and the feet. So working on those areas in trying to get things balanced.  Dave: Yes, well, the big thing on that that's where I missed them.  Lisa: And those are the three areas—the key areas—and obviously it's the score a lot of work Dave but yes. It's everything from drills and exercises and it's what we do, what you do.  Let's look at now, for runners, talking about running shoes, and buying running shoes, and picking a shoe that's good for you and what you're doing. You were showing me some running shoes before and for people on the podcast, you can't see, but says Kipchoge ones, what do you call them? What are those shoes? Dave: So these are Nike's Zoom Fly shoes. So for those of you who are listening to this, rather than watching it, so this is the shoe that Kipchoge wore to get his sub-2-hour marathon. And they have fibre placement, which have an awful lot of recoil. And also, it is over four centimeters of foam here, but the foam has incredible amount of recoil.  Lisa: Wow.  Dave: So the theory is these will take 4% of your running time.  Lisa: Wow, that’s messed up.  Dave: There’s actually a spreadsheet, which I got hold up to. We can actually look at your running times and calculate how much of a difference it would make to your running performance. And yes, I mean, who wouldn't pay for 4%?  Lisa: Yes. Dave: Mostly runners, my straight line runners, will compete in these. And you'd be a magnet to, if you want to run fast on straight lines. These are extremely high and extremely unstable. If you wouldn’t run on trail with these, no way.  Lisa: Like the HokaOnes, you know, like really deep into the thing that a big sole...  Dave: No, these are high. And they're incredible amount of recoil. They do push you very much, your forefoot style. So what I’ve noticed for days, I totally didn't want to like these. Lisa: Cause you want more people to go bare feet. Dave: I ran in them last week. This is ridiculous.  Lisa: Ridiculously good.  Dave: The speed and ease is something else. And certainly most of my runners who run straight liner, competing in these and certainly in the meantime and now, unless athletes have sponsors, those are the shoes they are picking up. And why wouldn't you if you can—I mean getting 4% improvement in performance is there's something else, even with training. If you can get that by paying for it, why wouldn't you? Lisa: So basically, it's elasticity that they're using. It’s the spring, it's the coil, it's the ability to bounce you off the ground, it's like being on a trampoline. So you're gonna get more force.  Dave: Right.  Lisa: Taking your foot. Dave: Well, yes. The energy is returned a lot more efficiently. So you'll notice that there's a whole host of track records been broken lately, and then closed the marathon. And yes, the technology had a big part in playing it. I think that the next Olympics, the shoe feature extremely heavy. And a lot of a lot of other manufacturers are using this technology now. And they have a lot stricter with the technology they can use in those events now. So there's the level playing field.  Lisa: If you want to level the playing field, it's a thing—if we start having an unlevel playing field, and that's where it becomes a bit problematic.  Dave: And they're recouping broken now. And there'll be more broken with this sort of new technology coming through. Lisa: And from a foot health perspective, are they okay, in that respect, or you just didn't want to like them?  Dave: No, it's not about—it’s sports. Sports is not about health. Lisa: Performance is not about health. No Dave: No. Lisa: It should be but it depends… It’s not always the case. Dave: That's the point, though. I mean, if you wear these around all throughout the day, why would you do that? And having four centimeters of foam between you and the ground can  be put to sleep. So look, I would—if I'm wanting to do a fast run and I don't really do much of that anymore—but if I was doing a faster training run with them, with a buddy of mine who runs pretty quick, I would definitely wear these.  I'm walking all day barefoot. I'm doing full exercises throughout my day. I'm waking up my feet all the time to look after my feet in-between. So you know, this foot choice, shoe choice doesn't stand finished when you're running. It's throughout the day. And that way, you'll choose a different type of shoe. If I was wearing a shoe during the day, my normal shoe would be something that's very minimal, which allows my foot to feel the ground and do things, if I need to wear footwear. Lisa: Yes. And sometimes you don't, you know?  Dave: Yes. And I think that's an important thing too. We've always—there's always extremes. Yes. So I'll see the odd person is taken to the extreme, and they'll go barefoot all the time. And I think you need to be careful of that too. So from a health point of view, yes. So where I live, you wouldn't run—I have run some trails barefoot but there are sharp rocks around there. But also we have snakes there which is a bit of a problem. So I've done the odd barefoot run, but it makes you pretty nervous. The other part too, is what goes on your skin, goes in you. Lisa: Yes, me too. You talked about that on—what was it on? Something you were talking about the other day. You were talking the skin and your feet.  When your lectures that I was learning from you, right? And you were saying how your daughter was barefoot, which was great, but you went to get some picture with the car.  Dave: Yes.  Lisa: And she wanted to run across the full court bare feet and you said, ‘No, put your shoes on’. Dave: Yes. Gotta have shoes. If you go into public toilets, or you're going on a forecourt of a petrol station, if you're walking barefoot on those, those chemicals are getting into your thing.  Lisa: Yes. So also, if you're walking barefoot too, and certainly in Asia and I have an Asian background, you bringing into your house when you go in there too. So be careful where you expose your feet to, because it will go in you, and then we'll take it into your house. Lisa: Yes. Dave: So yes, there's time and place for everything. Lisa: Yes, yes, that's so true. And this is where some other minimalist shoes come in. So and like, social etiquette and stuff, you don't—you can't go to the gym without some sort of footwear on. Most places will tell you off. Well, gym maybe. Dave: My gym, we actually have a gym shoes off policy, right? If we want people to move well, we need all the sensors working well. So we want as much information from those shoes from those feet as possible. So people understand where they are on the ground. Then we have covered where people put their shoes in.  And now not everyone is trying to barefoot. And we have some people who have some structural foot issues who do require some footwear, as well tend to move well. So, if you drop a dumbbell on your foot, having a shoe isn't really going to help you. But as one of my main etiquette contains the meat. Lisa: And most gyms prescribe that you have to have shoes on when you go to them. They do. And these social situations, you can't go to the opera with bare feet. It's not cool. And that brings me to ladies in high heels. What are we doing to our bodies when we wear… Dave: Oh boy. Lisa: …lovely, elegant? We look very elegant in high heels. What the hell are we doing to ourselves? Dave: Okay, so yes, you mentioned that word kinetic chain before. And the idea there is when you change one part, it will change something else with. That's what a kinetic chain does. Okay, a closed kinetic chain. So when you add an incline to your heel, and lift yourself up there, that pushes you forward. So if you have a stiletto on or something very high, you’ll fall on your face unless you adjusted. So where will you adjust? You'll normally do that by pushing your pose forward, by arching your lower back more. So often, the problem that you'll see with high heels will be it changes up the chain.  As well as that when you're in high heels, you're effectively pointing your toes. So if you're in a flat shoe, you'd have been in your ankles. In a high heel, your toes are pointed more. So what that does is that will shorten the calf muscles. And that’s why, if you look at a woman in high heels, she has more definition in the calves because those calf muscles are shortened up. But if you're wearing high heels an awful lot there, what that will do is shorten up that calf, it may make it harder for you to bend that ankle again, which will cause you some different issues, and for those of you who are a bit more technical minded too, peroneus longus, okay, will be one of the muscles which is a part of the action which will be shortened. The peroneus longus comes around a riff underneath the foot and a wrench into the base of that big toe. So it pulls you down into pronation so it collapses the arch. So if you've been wearing high heels an awful lot, that peroneus longus can shorten, which can end up reducing your amount of bend in your ankle and also will pull you into more pronation. Apparently, the good thing that allows you to splat, but remember we also want to make the foot rigid after that so it can repel often.  But if you end up mucking around with muscles, and changing the way they work, and certainly by placing a high heel, and you're certainly going to do that, that will do that. And it will change the way the peroneus longus works and wears out the muscles, which will change that timing, that intricate timing that we need to have in the foot. Lisa: Wow. And so ladies, keep your high heels for special occasions and not everyday use if you can. And I mean I—working with mum and she was in the bed for a long time, bedridden. Drop foot, you know, same thing basically. But just on a horizontal because she couldn't stand so she couldn't get that dorsiflexion happening, and then I was not aware of it at the time that this was a problem when it was happening, and I caught it quite late. And then we had to have her in a boot to try and straighten that out and now she's got a rigid ankle pretty much. So she's got no dorsiflexion, therefore she can't roll over the front of your foot and off nicely. So her whole gait is more flat footed. And these things knock on very early. And then it happens quite quickly that you start to get dropped foot.  Even if you think about life, wake up in the morning and that first time the foot hits the floor, and you've got like, ‘Oh yes, stuff. Stuff on the calf muscles feeling scuffles within the Achilles. And this is a—getting onto the Achilles toe’. If you're getting that initial stiffness when you get up in the morning, there's something brewing and maybe start to look at it. Achilles is a good—that's a good indicator that so step in the morning. How are you feeling? If you're bouncing out of bed and you can get out of bed and run down the hallway and you find you've got nothing, then you probably, not too bad. Dave: I think that's a great point here. You should wake up feeling reasonably good. I mean it’s not a margarine commercial. You shouldn't jump out of bed, ‘Hey. Hello world’. That's probably the only thing you'd be happy about if you're eating that stuff. But that's a whole other conversation.  I had a professional athlete who I was working with, and we were talking one morning and was actually helping, deciding—standing up, deciding we were gonna go with him. And he said, ‘Yes. So how things young is young? What’s your story? I didn't have a car stand up. And then I go, ‘Sharon district’. About 40 minutes later, I'm ready to move. That's normal, right? ‘No, no, that's not normal. Your body normal is not being in pain and struggling to move. That's not normal..  Lisa: Oh but it's age, Dave. That's the next thing, he’ll tell you. It’s just normal aging. Dave: So now I think too, you know. Let’s you've got a—sorry for those of you who are in different hemispheres. But a classic car in the southern hemisphere was a Ford Cortina. Now imagine you've got a 1984 Cortina in your garage, and it's chrome. It's beautiful. And you've looked after it wonderfully. That car drives fantastically in your own town, you think this is the best car ever. But if you take a 1980 Ford Cortina, and you don't maintain it, and you just drive it hard, you won't have it here today.  Lisa: Yes.  Dave: Okay. So if you've got a classic car, it can run really well. But you need to put some extra care and maintenance into it.  Lisa: Absolutely. Dave: That's all it is. So, but you can have a young—you can have a new sports car. You can trash it's probably gonna be a little bit better. But yes, so the older you are, the more keen you’re taking care of your classic car. Lisa: We fit into the classic category now.  Dave: That's another spin on that too. You know, ages is one thing.  But I kind of look at these young athletes, I think you're—you can you can keep up with me. You haven't got the experience I've got. Play that card. It's not there's not just physical is a lot more that goes on to it. And take a look at the outer world. And know that certainly, the more of a mental game that's required, the better it suits your experience.  Lisa: Yes, in Roman times, like, it's not about speed and power after a 100k, it sort of starts to come down to… Dave: Yes. Lisa: So yes, it is. It's an attitude for life. There's a number of rounds on the clock, but it's keeping everything as best as you can in optimal performance and stopping things before they fall down the cliff, and being in that preventative space. And that's what we're both all about. And that's why you’re taking good care of your joints, and your muscles, and your hydration, and all of those exercises is really, really key. Let's talk a little bit now around, what's your take, I'd like to hear just on general and for joints and cartilage and stuff? Things like sulfur, MSM, conjugated salt, and so Glucosamine, that sort of supplementation for cartilage and joints you know anything about this? If it’s a cool thing or not? Dave: It's really cool at one of my key areas. Look, supplements are strange one. And certainly my take on that really changed over the last few years. And now if you think you can get everything out of your diet, even if you're eating organic, you probably can't. So there's certainly some supplementation useful. I'm very big on getting an evidence base on that though.  So there's this push where we've almost seen our science as lying now. We need to be able to do our supplementation, to what you want to choose. But what I found now is basically you become a victim to marketing now. So there's a fine line between the two. So I read up on what I think is useful, and what's not, and I use it on an individual basis. But I'd like to cover the basics first, and often think that we're thinking they're tasting things like curcumin. Another problem with curcumin by the way, as well some other some other supplements here when you're not even looking at the basics. So do the big rocks first. Lisa: Yes, I'm big on those pretty you know those ABCD. Selenium, zinc, magnesium-type base. Not sexy, but very essential for genetic functions. Yes. Dave: A decent multivitamin is probably a bloody good place to start, and then you can start fine tuning from there. Sure. I take a few other things, as well. I'm a big fan of a decent probiotic, and veering those probiotics around. I think that's really important. And I use that as a food source as a supplement. I do like my fish oils. I think there is a part to play in that.  Lisa: Yes. Those are wild. Dave: Wild, wild, wild small fish is the way you want to go and watch out for the processing on those as well, they can get... Lisa: Very very important to get the right fish source, you get right fish source ,and you'll be doing the opposite to what you need to kick the company out especially... In our next conversation. I know we're getting a bit off topic but probiotics, I've done quite a lot of study around the probiotics, and some of the problems of probiotics, and has domains, and causing inflammation and allergic reactions. Have you found any one in particular that you'd say, ‘Yes, that one's been really good for a lot of people’. This got a good clinical base to it? Dave: Yes. There's a few brands that I tend to like. These… Lisa: Deep in here without any proof on that question, but I was interested for myself because I'm looking at our probiotics. Dave: Syntol is a brand I quite like. Syntol, S-Y-N-T-O-L iis a brand that I've used for probably the last decade. That's an industrial strength one which works really well. Also Bio-Heal is another one, which I think is a pretty decent one. And the reason I like those brands is that they don't need refrigeration. And the Syntol is more spore one so it can be a bit bitter as well. Lisa: Yes. Because it's got to get through the digestive, the stomach, the action, into the lower. And I know like the science in this area is still a very much an evolving space. And a lot of this, I have had a couple of clients been on probiotics that you get out of off the shelf or supermarket type thing. They ended up with histamine reactions and things like that because they do have often—so if you're sensitive to histamine and you might want to check it out a little bit more, and just be toe in the water and find out. So it's a little bit hard to know because I think the jury's still out in some regards. But I think but the spore based ones… Dave: Yes, there seems to be built in there. I feel like most fermented foods, they won't suit everyone, for sure. They served me really well. So I make my own kimchi. I make my kombucha. I make my own sauerkraut. Do some water kefir as well. I often use a little bit of fermented foods to help my gut work. And every culture and everywhere in the world has some form of fermented food. And we realize as developing communities that we need to look after our gut health needs, and we didn't have refrigeration was probably the other thing as well. Then those are very health giving. And it still exists in most cultures today, and it's certainly something that I'd recommend if it suits you to work into your diet. Lisa: Yes, and that is where I know—working with the PH-316 epigenetics programme that we do that there are certain biotypes. And one of them that can miss to watch the amount of fermented foods because it can again—cause histamine problems in inflammation in the body—so that is a bit of a bit more a personal genetic thing too, as rather than across the board.  But to be fair, I think that's everything needs to be personalized nowadays. And we've got a lot I wouldn't say we've got an all sass but there is a lot of science around what type of thing for what person and which genes, for which foods, and I don't think it's by any means perfect yet. The science behind it, but we can get a bit of an idea on some of these things. So just because it's healthy for Dave doesn't necessarily mean it's going to be healthy for Lisa, you know? So a little bit of experiment, and I'm a big experimenter, versus showing one of my athletes into my pantry. And it looks more like a cumulus isn't well supplement shop rather than a...  And I don't take on things all the time but I'm always experimenting on my own body, and trying to optimize, and to see what sort of things are having which effect and then trying to take note of it, and keep track of it, and trying to work out. A little bit hard when you keep chucking 100 variations at things. It's not exactly a clinical study where you do one variation. But… Dave: Eating is one.  Lisa: Eating is one. Yes, exactly. And keeping testing. But back to the whole foot scenario talking that—I mean, you and I can end up in bloody all sorts of areas. What's your take on orthotics? I wanted to ask that again. Jury's out of my mind on orthotics and I'm not sure. Dave: That’s a real polarizing one. I'm gonna make myself unpopular with some people here, but here's my take on it. I'm not—I'm not a [51:17 unintelligible]. If you have a foot that hasn't got a structural issue, or a neurological deficit, you can work without orthotics. Okay, so orthotics add support, and they will normally block motion. Okay, that's what they're pretty much designed to do.  So normally, when they describe orthotics, they'll look at, ‘Okay, there's too much motion. We will block that motion so that the foot can do its thing’. You block motion, some way though. What we know is that motion will be taken up somewhere else. And in that closed chain, where that motion goes will often have problems.  So let's have a look, if you've got a foot that doesn't dorsiflex well, so the ankle doesn't bend well. Now what will happen is the only way you can bend their ankle now is to roll inside or to over pronate. That's the only way you can go there. But rather than go through the foot, you go around the foot now. So what may happen is, if you have no thoughts to stop that pronation, go, ‘What's happened now’? Okay? Now you can't pronate the foot, you can't work at the ankle, what's going to go next? You may end up taking up a knee. But now you'll end up with a knee issue, when you may come in with a foot issue. You may end up with a knee issue, or it may end up going into the hip or the lumbar spine, or as far as into the neck, which is a common thing or even to the head.  I've seen from people who've had a foot issue and they get hit out when they start hitting the pavement because it goes right through the chain. And that's it ends up tearing them up. So when you enter [52:53 unintelligible], if you've got a painful foot, it can be very useful temporarily to change what's going on, or a structure or neurological deficit. Otherwise, think of a crutch.  Okay, if I break my leg, ‘Oh, I want to break around my knee without smashing my knee to smithereens. I want to break around my knee and I want to wear crutches to start with’.  Now, oh boy that feels so good having extra support in there. And I've restricted that range around my knee because it's too painful to move. But 10 years later, I wouldn't want to be still be wearing that same brace on my knee with a crutch. And I wouldn't want to go in there each year and get that brace changed a little bit and realtered. So I look at some of your thoughts that come into me and I look at that foot and I look at your foot and I go, ‘I have no idea’. I kind of—foot mechanics is tricky stuff. But I've put a fair bit of work into it. Like I understand how feet generally work, I think. I look at that foot and I look at that person, and I think, ‘I can’t see what’s that relating to at all’. I don’t know what you’re seeing, but that's not what I see.  And there’s a few things around some of the theory of orthotics which are a little bit tricky around foot mechanics change when you have your foot on the ground versus when you—whether your foot in the air.  Lisa: Of course.  Dave: A lot of the mechanics that are put into orthotics aren't done in a closed chain, which changes the whole way the foot works. Though, there is some stuff there. I've had piles of orthotics thrown away over the year. I have products come into me and I go, ‘What?’ And I'll test them. It'll take people with them, without them, and they'll go better without them. I had some people that do need them though, because they had some neurological issues for their head structural foot issues, where their foot is broken beyond repair, where it does need some help.  And making good orthotics, definitely—for those of you who maybe have a diabetic foot or have had some issues around there. Some of the orthotics I've seen that have come and have been worked about and are amazing, though there is some there are some amazing work on orthotics. And that's probably my outtake on this one. So finding someone who's very good at that, and looking after a foot in trouble is a real skill. Lisa: It is. I've got a friend, Lisa Whiteman, who owns a China podiatry clinics, right, throughout New Zealand, and their stuff is next level. But the science and technology that they have in order to get the right things for that. So if you're thinking of doing it, make sure you go to somebody who really knows this stuff, and not just any sort of orthotic. And test it, and try it, and see whether you're getting something through up the train, fix that. And question with the immediate, long term—I've never had any benefit out of an orthotic. And I've only got, again, one anecdotal in me.  But we're not—like dealing with someone like my mum with a neurological problem, and limited dorsiflexion. I am considering the next opportunity I get to take down to Wellington to go and see my friend and go into her clinic and get her an assist, that might be, for example, a situation where something like that could be called for, because she's lost that motion and the ankle, so we haven't got it to work with. Dave: So we do have problems from the bottom up. So the foot can cause a problem going up, but also it can probably be going

Welcome to the first episode in a special 5 part series. Over the course of these next 5 episodes, you’ll get to hear an interview between Russell Brunson and Josh Forti about the book “Atlas Shrugged” by Ayn Rand. But this interview is much more than just them talking about the book, they are actually discussing business, religion, and politics (a subject Russell doesn’t talk about often) as they pertain to the concepts in the book. In this first section, you’ll get to hear the introduction and the basis for how the entire conversation will flow. The first main topic of the book, and the main concept for this episode is greed. Is it bad? Can it be good? Are we born with it? Can we change? So listen in to part one of this unique interview and start reading “Atlas Shrugged” (just read it, the movies aren’t great), so you can be ready for part 2! Hit me up on IG! @russellbrunson Text Me! 208-231-3797 Join my newsletter at marketingsecrets.com ---Transcript--- What's up, everybody? This is Russell Brunson. Welcome back to the Marketing Secrets Podcast. And right now, I have a treat for you. Over the next five episodes, I'm going to be taking you in behind the scenes of an interview that I did with Josh Forti about the book, Atlas Shrugged. And some of you guys have read Atlas Shrugged, some of you haven't. Some of you know the premise, some of you don't. And I want to preface this by saying I do not believe in everything taught in the Atlas Shrugged book. I love a lot of it. It talks about producers versus consumers, the looters and the takers versus those in society who are the creators. Right? And there's a lot of things I strongly align with. There's also things that I don't strongly align with. And so I love the book, one of my favorites I've ever read. And so that's the first thing. Number two is, as I finished the book, I remember Josh Forti, who's one of our funnel hackers, he wanted to do the interview with me and I was just like, "I don't have time for interviews." And we're getting closer and closer to the election, we talked on Facebook. We were posting some comments and I was like, "You know what? The interview that I would actually love to do would be about Atlas Shrugged, looking at the whole political thing as it's happening right now and the elections and everything, through the lens of Atlas Shrugged. That'd actually be fascinating for me," because I don't typically, as you know, talk about politics. Right? I do talk about religion, but I don't talk about politics. That's not something I typically go into, but I thought it'd be interesting to look at politics from the lens of Atlas Shrugged. And so in this interview series, it's a lot of fun. We talk about producers versus consumers. We talk about the left and the right. We talk about some political things. Now Josh, just so you know ahead of time, he's very pro-Trump, very much on that side of the discussions during this interview. And this interview, just so you know, took place before the elections. As of right now, I'm still not sure who won. You guys probably will know by the time you're listening to this, but as of when I'm recording this, we don't know, but he definitely leans on the Trump side. I don't really share much of my political beliefs, but you'll get kind of what I believe and why I believe it through the lens of Atlas Shrugged over this interview series. So I hope you enjoy it. It was a lot of fun to do, a lot of great feedback and comments. And again, we talk about stuff I don't typically talk about ever. So this may be a one-time shot to hear inside my mind when it comes to politics, religion, and all through the lens of Atlas Shrugged, the book. So with that said, I want to introduce you guys to the first part of this five-part interview series with me and Josh Forti, talking about Atlas Shrugged. Russell Brunson: Are we live? Josh Forti: We are live. Russell: What's up, everybody? Josh: Oh, my word, with the incredibly ... I don't know if long-waited. It hasn't really been that long. Two months ago. So much expected podcast with Mr. Russell Brunson, himself. How are you doing, dude? Russell: I'm doing amazing, man. Thanks for flying all the way to Boise just for this conversation. Josh: Yeah, absolutely. Dude, this is probably the conversation I'm looking forward to most, certainly in my life thus far, when it comes to business and philosophy and everything like that. Russell: No pressure at all. Josh: Well, it's funny. Your wife said, "Oh, thanks so much for coming out." I was like, "Yeah, it's certainly ... Yeah, because it's inconvenience to me to fly all the way out here." I will say, this is my first ever in-person interview like this. Russell: Oh, really? Josh: Yeah. Russell: We got the microphones set up. Josh: I know. We have- Russell: He’s a professional. I've never done this before. Josh: Literally, we have a soundboard down here. We've got Russell's mic. Can you guys hear us all right? By the way, guys, for all of you listening on audio, we apologize because we're going to answer some comments in the Facebook feed here because we've got everybody down here. By the way, you can see all the comments down here. Russell: What's up, everyone? Josh: All right, guys. If you are live, comment down below. Let us know where you're tuning in from. Let us know if you know Russell or if you know me or if you know both of us or what you're most looking forward to. And Russell, I'm going to be honest with you. We're just going to be super chill. Guys, we have a live audience back here. We've got Dave. Dave's over there. We've got Jake and Nick. Russell: What's up, Dave? Josh: Where'd Jake go? Russell: Jake's working. Josh: Oh, there we go. Jake's working late over there. Russell: Jake, by the way, designed these amazing shirts for this- Josh: Yeah, check us out. Russell: This is my Rearden Steel shirt. This is my Who Is John Galt shirt. Josh: Isn't this great? Okay, but I feel like the back- Russell: Yeah the back I’ll read what it says. It says, "I started my life with a single absolute, that the world was mine to shape and the image of my highest values never to be given to a lesser standard, no matter how long or hard the struggle." So do you guys like these shirts? These are custom made for tonight. And you guys may have a chance to get one of these, but not yet. No, not yet. Josh: Not yet. Russell: We'll let you know when the ability ... If you guys ... Josh: Oh, man. Oh, man. Russell: Anyway, it's going to be fun, but these are custom ... We literally made these today. We needed some sweet shirts…for the show. Josh: Okay, Will says he got your text. Did you send my text to everybody? Russell: Yeah. Josh: Russell on top of it. I sent out a ManyChat, Russell sent out a text. All right, guys. Let's lay some ground rules here. So the quick backstory behind this ... And it's going to be weird. You've got to look in the camera here. Quick backstory behind this is I make a post on Facebook about, what, probably three months ago now or so? Russell: Yeah. Josh: Two, three months ago. And I go, "We need some epic people to interview for the podcast. Who do you know? Tag them all down below." And shout out, Georgie. Georgie comments and goes… "I coached Russell. You should totally interview me." And I was like, "You've got to be pretty gutsy to tag Russell in your comment and tell him you coached him," but then Russell comments back- Russell: And George is an Olympic wrestler. He was on the Bulgarian Olympic team. He wrestled at Boise State with me. He's the man. So yeah. Josh: I commented back. I go, "You coached Russel?" And then Russell goes, "Well, yeah. He coached me. He's awesome. You should totally interview him." And so I said, "Yeah, Georgie, of course, you can come on. We'll do an interview, but Russell, I've got an open invitation to you if you want to come back on." And then you were like, "Sure, if we can talk about…" or no, you didn't say sure. You said, "Can we do it about Atlas Shrugged?" Russell: Yes. Josh: Yeah. Russell: Because I interview a lot about business stuff and- Josh: I'll pull the microphone just slightly. Russell: Yes. I don't do a lot of interviews because ... I feel like I've said, but I don't want to say, but I just finished literally probably the fattest book in the history of books called Atlas Shrugged. And I was geeking out on it and I wanted to talk about it. I didn't have a way or someone to geek out with, other than some of my friends here. And I was like, "If you want to talk about Atlas Shrugged, I'm in." And then you started freaking out. Josh: The funny thing was is I go something to the effect of, "You want to talk about the fall of capitalism because of a boycott, because of a brilliant person and why socialism sucks? Yes, absolutely. I would love to do that," to which you don't give me a yes or no answer. You reply back and go, "Ha-ha. Oh, man. That'd be fun." I'm like, "Talk about an open loop, man. Come on." So anyway, I immediately messaged Russel and I'm like, "You better not be joking because that would just be rude." He goes, "No, I'm totally in." Josh: So about two months go by. You had a bunch of stuff. You had some fun stuff during that time, hanging out with- Russell: Lot of stuff is happening. Josh: Tony Robbins? Russell: Yeah, Tony, man. And it's been chaos the last couple months, not going to lie. And as we got closer and closer to the election, I'm like, "This is an interesting conversation, post-election, but I think it's more interesting before election." And so was it two days ago, three days ago, you're like, "I will fly to Boise to record this." Josh: Yeah. Russell: "What day do you have open?" I'm like, "Only Wednesday night." And now we're here. Josh: Yeah. It was Friday afternoon. We were Voxing back and forth and you're like, "Dude, we've got to get this done before the election." I'm like, "Before the election? Oh, my word." I said, "All right. Sounds good. What time do you have available?" And that's when I was like, "You know what? I was going to ask you creatively, but I'm just going to ask you. How about I fly out to you?" And you're like, "Heck, yeah." Josh: So guys, that's the backstory. That's how we got here. And so this is an open conversation about Atlas Shrugged and kind of everything that encapsulates. I think we'll talk about some religion, some politics, kind of both sides of the aisle there and open it up. Russell: Fun. Josh: Anything else you want to add to that? Russell: The only other thing I would add is, because this book, by the way, if you haven't read it yet, is very polarizing. There are people on both sides of it. Russell: And I think both of us wanted to stress ahead of time that I do not believe in everything in this book. A lot of things in this book, I do believe in. And it's interesting. One of the things I want to dive deeper in in this conversation, I'm excited for and I told you not to do Voxer. I was like, what's fascinating to me is not, "This is what we should believe." What was fascinating to me as I was reading this book, and we'll get into the premise of the book for those who haven't read it, but the big thing is producers and going out there and creating stuff and doing things, which is what entrepreneurs do. Right? And it gets in the part of greed is good. You should be greedy because it's going to create all these amazing things, which then the byproduct's really good. Russell: And part of me is like, "Yes, yes, yes, yes," and then part of me, as a believing Christian, I hear this message I believe in and then I hear in my mind ringing Christ, talking faith, hope, charity, and love. And I feel like they're these two polar opposite things, which by the way, we dive into politics a little bit. There are two polar opposite sides, one that believes one, one believes the other. Russell: And I think that there's a happy medium and that's what I want to dive deep into just because I don't want anyone thinking, "Oh, Russell and Josh just believe this," or whatever. It's like, no, there's sides of this and I empathize on both sides. I want to talk about both of them because they're fascinating. Anyway, I've toyed writing a boy about this concept, these two things. Anyway, I think it should be fun to first time verbally ever talk about this stuff. So I'm excited for it. Josh: Yeah. And I would just echo that, as well. I think one of the things that often happens with me, with my ... So funny. You, who never, ever talks about politics and me who doesn't know how to get on Facebook without arguing about politics, colliding here, but is that a lot of times I get grouped into, "Oh, you like this reading. Therefore, you believe with everything." "You read this book," or, "You support this person," whether it's a political figure or a book or something like that. It's like, by saying that you enjoyed that or that you learned a lot from it, that all of a sudden you suddenly believe everything in it. And that is not the case at all. And I've gotten a lot of criticism from people that are like, "How could you possibly like Atlas Shrugged?" And I'm like, "Well, this is the conversation that we're going to have." Josh: So real quick, before we dive in, I'd be curious ... I want to do a poll real quick. How many of you guys have actually read the book? I'm curious to know. Hold up here. There's two different versions of it, but if you've read the book, just comment below the number one if you have read the book, the number two if you have not read the book. I think that will just kind of give us a poll. We've got 200, 300 people. Russell: And if you listened to the audiobook, we'll count that as reading, too, either way. Josh: Yeah. Not if you know the premise of the book, but actually have read the book and have a deep understanding of it, or not deep understanding. But have like… Russell: Understand the stories them in. Josh: Yeah, things like that, because then it'll be interesting. Russell: One is read. Josh: One is read, two is not read. Oh, more ones than I thought was going to. Russell: Yeah. Me too. Josh: Russell's book is so underrated. Russell: We're 50/50. Josh: Ooh, yeah. I think we should take a poll at the end; what's better, Atlas Shrugged or Dotcom Secrets? That's the real question we should be asking right now. Russell: That would be good, that would be good. Josh: Okay. So we have a lot of people that have not read it, so we'll have to go into the premise of that. Okay. Russell: Are you ready to get started? Josh: Yeah. I'm ready to rock and roll with it. Russell: Oh I’m ready. Josh: Okay. Guys, we want to lay a couple ground rules. Okay? Because I don't know what it's like to be Russell, Russell doesn't know what it's like to be me, but I think we both have a mutual understanding that we could very easily be taken out of context here. Josh: I think the goal, and then I want you to kind of expand upon this, is we're not trying to take a side here. We're trying to have an open discussion about it. This could very easily turn into something that's like, "Why did you vote for Trump? Why Biden sucks, why Biden's great, why Trump sucks," something like that or certain religion. We're not trying to convince you of anything, really. In fact, this is honestly more of a conversation for us. And we're like, "We think it'd be cool to stream it out to a bunch of people because there's a reason for me to fly out here and do that," but the purpose of this is to have an open discussion about the book, the premise of the book, an understanding of it, and then honestly we're probably going to be in our own little world over here. Josh: And we want you guys to interact and comment and engage and push your questions. And we'll go back through it, obviously, but the purpose of this is not to try to convince anybody of anything. It's simple to, at least from my perspective, shed a new perspective and give the perspective of somebody who, for those of you that don't know who Russell is, the founder of a ... ClickFunnels is a billion-dollar company, SaaS company. You have 400 employees? Russell: Yeah. Josh: 400 employees. So from that perspective and from my perspective, to open your eyes to a new perspective of what we like, what we don't like and, like I said, more of a conversation for us. Russell: Yeah. I think that's good. And I think a big thing that we will talk about ... Our goal is not to convince you of anything. In fact, I think I'm still convincing myself of both sides. I believe both these two things that seem contradictory, but I think there's a middle ground and I'm excited to explore it. So it'll be fun. Josh: Cool. So I think we got to- Russell: Talk about the premise of the book? Josh: Yeah, we've got to talk about the premise of the book. Russell: I might have a little mini statue behind me that might help. Can I grab that? Josh: Ooh, yeah. Russell: Okay. So folks that have not read Atlas Shrugged, I didn't know what the premise was at first, but this is the story of Atlas. Some of you guys know Atlas was cursed to have to carry the entire weight of the universe, entire weight of the world upon his shoulders for forever. Right? And so this is where the premise of the book ... All of us, people who are listening to this might guess that you are a producer. Right? Otherwise, you probably wouldn't be listening to me or to Josh. I attract, I teach, I coach, I help producers, entrepreneurs, people who are trying to change the world. Right? Russell: I'm curious, how many of you guys have ever felt this pressure. Right? When you feel like you literally have the entire weight of the world upon your shoulders. And if you haven't, it's time to become a producer. That's first off. Second off, I can empathize, though. There's so many times, you can ask Dave or any guys on my team, there's days I come in, I was like, "I feel like I'm going to crack." There is so much weight to carry this around. And I'm guessing most of you guys have felt that. It could be with your family, could be in work, could be business, whatever, but you've felt the weight of the world. Right? Russell: So this is what Atlas had to hold. Right? And so the premise of the book, Atlas Shrugged, is what would happen if the producers, the people that are carrying the weight of the world on their shoulders, what happens if they were to go on strike and they were to shrug their shoulders and be like, "Meh." In fact, should I read your tile you gave me here? Josh: Yeah. Russell: So Josh, as a gift today, gave me some amazing tiles. This is a quote, actually, from the book, Atlas Shrugged, talking about this. It says, "If you saw Atlas, the giant holds the world on his shoulders. If you saw that he stood, blood running down his chest, his knees buckling, his arms trembling, but still trying to hold the world aloft with the last of his strength, and the greater of his efforts, the heavier the world bore down on his shoulders, what would you tell him to do? Just shrug." That's things like, what happens to society when us, the producers, when we no longer want to carry the weight of the world? We shrug and we walk away from it. Russell: And the book is a story about that. What happens when these producers start disappearing and they start leaving, they start going on strike? You see society, what happens when the producers disappear. Josh: Yeah. It's interesting because there is no one named Atlas Shrugged in the book and there's nobody named Ayn Rand in the book. And so there's concepts that she's writing about outside of that and it's this ... How do you summarize a 1200-page book? Basically, in the book, there is a main character by the name of Dagny. Russell: Oh. Yes. Josh: Oh. Russell: I was going to say John Galt, but you're right. Yes, Dagny’s the main character. Josh: Sorry. For the first two thirds of the book, the main character is a woman by the name of Dagny. And basically, she is one of the producers of society. And she's not the head boss of the railroad, but she's basically the person that runs this railroad company. And it is written, what, 1950 is when this was- Russell: Yeah. Josh: So 1950, and it's basically this forecast into the future of a government that is basically forcing super, super strict restrictions onto private businesses and making them do things, kind of like today in America, but super, super government overreach in a lot of ways. And so Dagny is trying to keep the world afloat, more or less, by getting the railroads done on time and getting orders shipped. Josh: And I'm super oversimplifying, but around her, all the people that she works with that owned all these other companies that she would buy copper from or she would buy steel from or buy the railroad track from or buy the coal from, all of a sudden all these head people ... Imagine people like Russell, all his friends just start disappearing. Imagine Elon Musk and Jeff Bezos and Russell all just started disappearing. Right? That's what's happening all around her and she doesn't understand what's happening to them because just, one day, it's up and it's gone. Josh: And so the premise of the first two thirds of the book is showing this story of this producer who is living in this world of super government tyranny, overreach that's super, super controlling and she's watching all of her friends disappear and she doesn't know why. Would you say that's a pretty good explanation of it so far? Russell: Yeah. And every time they disappear, they leave behind a note or something that says, "Who is John Galt?" That's this theme throughout the book, is who is John Galt? Who is this John Galt person that makes all the producers disappear? Josh: And Dagny has no idea who John Galt is. Right? She doesn't even know, actually, for awhile that John Galt's actually even a real person. And so once she does find out that John Galt is probably a real person, John Galt becomes her sworn enemy because she doesn't know who he is or what he's doing. All she knows and all she associates with is that John Galt is taking away all these producers of society and is making her life harder because ... Imagine you being an entrepreneur and all of your entrepreneur friends that you buy stuff from and that you send all your people to, your referrals and everything, you buy all your supplies from, imagine they're all just disappearing and you think it's because of this one guy who's taking them all away and you don't know what's happening to them. Obviously, they'd become your sworn enemy. Josh: So for the first two thirds-ish of the book, that's kind of this premise of they're painting this really, really vivid story of the ... what are they called, the great thinkers of society? Yeah, the great minds of society, basically disappearing. And Dagny and ... there's a guy by the name of Hank Rearden, I think. Russell: Yeah, Rearden Steel. Josh: Rearden Steel, yeah. So Dagny and Hank Rearden are the two major ones left right before the big plot twist happens and you're like, "Oh," and then you get introduced to John Galt. I'm going to let you explain John Galt now. Russell: Oh, man. Okay. So that's the first two thirds of the book. By the way, there's movies. Don't watch them. They'll ruin the book. The movies were really bad. Josh: Yeah. Read the book. Russell: So two thirds into the book, she starts trying to figure out this mystery of who's John Galt. She ends up finding him and turns out that he has been going around and getting all these producers to go on strike, convinces them to, "Look, it's not worth fighting for anymore. All your incentives are gone. Let's leave. Let's go on strike," and they leave. And John Galt's trying to get her to leave and she's like, "I can't. I have to do everything in my power." The last third of the book is her leaving John Galt's presence and going back and trying to figure out how to do this thing as she's watching just government regulations getting harder, and harder, and harder, and harder to the point where everyone just has to disappear. Russell: But one of the things John Galt and the people say, "When the lights of New York go out, then we'll come back and we'll rebuild society from the ground up, after the looters and the people are gone." Josh: And that's basically how the books ends is lights of New York go out and then- Russell: For such a long book, all of a sudden it just ends and you're like, "Oh, I need one more chapter. Come on. Just end it." Josh: And we're never going to get it. Ah. Russell: Well, maybe I'll write it. Josh: Yeah. So that's the storyline of the book, but what I think we really both want to focus here is kind of the premises and the overarching ideas that the book presents, and capitalism versus socialism, and I think we'll talk religion and politics and kind of everything that’s in that, but I kind of want to, if it's all right with you, I kind of want to turn the conversation more towards us now and just kind of start geeking out just about that. Josh: So guys, we'll obviously go back and ... By the way, we want all your comments if you're ... Actually, comment below right now. Where are you watching? Are you watching it on YouTube? Are you watching it on Think Different Theory page or are you watching it on Russell's page? Comment down below because we went to multiple different locations. So we have a bunch of different people tuning in for everything. So just comment down below. Leave your comments, leave your questions, smash the like button, love button, share this out, and we're going to be here. Josh: All right, Russell. What's up? Russell: Hey, man. Josh: All right. Dude, I've been wanting to, and I hate this terminology, but just pick somebody's brain like yours for the longest time. And this book, oh, my gosh. So what do you like about the book? What was your favorite thing? Russell: Yeah. Well, let me tell the backstory. So 2008 is when the market crashed last time, right? Josh: Yeah. Russell: And I didn't realize that, that year, over 500,000 copies were sold organically by people talking to me about it, talking about, "Everything's she's prophesying is happening right now." And so, back then, I remember all my entrepreneur friends, like, "You have to read this book." It was the word-of-mouth buzz that sold 500,000 copies of a book has been ... The author died, whatever, 30 years earlier. There's not active marketing out there. It's crazy. And everyone's talking about it, like, "What's happening in this book is happening in 2008." And it was just this prophecy that was being fulfilled. Russell: And so everyone in 2008 was telling me to read this book. I remember buying it and I was like, "This is a really, really big book." And it took me awhile to get into it and I could never get into it. I read the first, I don't know, first 200 or 300 pages four or five times. And then, finally, this summer, one of my very first trips where I didn't bring a laptop since my marriage. So my wife is very proud of me. Josh: Dang. Russell: And so as I was leaving the office, I grabbed this book. And I picked it up and I was like, "I have no computer, but I've got this." And usually, I bring 20 books just because I know I'm going to read. I just brought one and I was like, "I'm going to do this. I'm going to be forced. I'm on a lake for a week and a half with my kids and all I can do is read this book." So I brought it, got the audiobook, as well. It's funny, I do the same. I listen to the audiobook and I read along so I can listen to it way faster, that way. And I started going through it. It took me a little while. She does such a good job of character development at the very beginning, it took awhile to get into it. Josh: Yeah, for sure. Russell: And then the story hits and then you're just like ... And you couldn't- Josh: It's like thing, after thing, after thing. It's so quick. Russell: Oh, yeah. And it got crazy. So for me, it was interesting because I think, if I would've listened to it 10 years ago or read it 10 years ago, I had never experienced any of the things they talk about in this book. Right? Josh: Now you don't have to worry about it. Yeah. Russell: Even better. I never experienced government regulations and things like that or just those kind of things. And as ClickFunnels has grown from me and Todd to our first member, to our first thousand, 10,000, 100,000 members, 400 ... I don't know how many employees, a lot, 400 plus employees. As it's grown, it's been crazy because you would think all we'd be focusing on here inside ClickFunnels is the next feature in the app, next thing. Russell: And there's the year where we had to spend an entire year just refactoring the software for GDPR compliance. We have regulations that come in on taxes and this. It's constant where most of the battles we fight at ClickFunnels right now is not about, how do we make this thing better for the customer? It's, how do we protect our customers from the government? It's crazy. And just so many regulations and things. Russell: And so I have been feeling this pressure. Some of you guys may have seen my interview I did with Tony Robbins ... not interview, but Tony Robbins did an intervention with me last year in Fiji. Josh: Yeah. That was fascinating, by the way. Russell: I'm so glad we captured that. It was a really cool moment in my life, but if you listen in there, I talked about ... He's like, "Well, what do you want to do?" And I was like, "I don't know, but the pressure ... I love the same, so I love everything I'm doing. I love the people we're serving, but there's these other pressures that aren't the game, that aren't the people, that they just get so heavy sometimes where it makes me want to just walk away." And again, as I'm reading this book- Josh: You hadn't read the book at the time. Russell: I hadn't read it yet. Josh: Yeah, okay. Russell: As I'm reading this, it's like- Josh: Did you know anything about the- Russell: I did not know the premise, no. Josh: You knew nothing. Okay, okay, okay. Russell: I didn't know what Atlas Shrugged meant. I was just like, "Oh, it's Atlas ..." I didn't know ... And it was like, when I read this title, like, "What would you tell Atlas if this was happening? Just shrug." And I was like, "Oh, that's why they called it Atlas Shrugged." And then I remember vividly feeling the pressure of this calling and how heavy it is. Russell: And there's so many times I wish, like, "Okay, sometimes it'd be so nice to walk away or to shrug or whatever." And so I instantly, with Dagny's character, I was like ... I feel that with Hank Rearden. I had so much empathy and understood their characters because I feel that so many times. Hank Rearden just wanted to invent his steel and put it out. That's all he cared about, right? For me, funnels are my art. I can't draw, but funnels, that's my art and entrepreneurship. That's my art. And so I just want to do my art. That's it. He just wanted to create steel. And it's all these other things and it's just like, "I just want to do my steel. I just want to do my art. Why do I have to deal with all this other stuff?" Russell: And so as I'm reading this, I just had so much empathy for the characters because I felt like I was the characters, even though it was weird because it's railroads and stuff like that and I'm internet, but I think that's why I really got into it. And then I got just curious, what happens? How does this story end? Be I'm in the middle of it. And depending who's listening, you may or may not have felt some of these pressures. As you grow, you feel them. Russell: It's interesting. As ClickFunnels has grown, we've talked about the pressure that I feel today would've crushed me five years ago. Right? And so you have to go through this thing where you build capacity to handle the next set of pressure, and build capacity, and build capacity. And nowadays, stuff happens daily that's just like, "Man, that would've destroyed me five years ago." Russell: And so I think, if you guys haven't felt that, as you grow, as you continue to try to get your message out and try to grow your businesses, whatever, the bigger you get, the more that pressure comes. Josh: Do you think…with that ... And I want to continue that because it's such a good conversation, but with the pressure, the things that are happening now daily that would've wrecked you five years ago or three years ago, whatever it was, do you think it's good, though, that they would've? Is it good that, at the capacity that you understood, that you took those things seriously then or would it have been better for you to just be in this mindset? I know it's not possible, but looking back, if you could snap your fingers and back then would've had the mental capacity to just ignore all those things and go up, would that've been a good thing? Or the fact that you went through all those things, does that help? Russell: The going through it is what makes you worthy of the things, right? Josh: Being able to… Russell: It makes you ready for it. Otherwise, just like lifting weights, if you try to squat 800 pounds, that's what it feels like. Right? Your legs buckle and you die, but because you went through that thing, you're able to have the capacity to hold the weight. Josh: Okay. Russell: Yeah. So anyways, the thing for me that was the big thing is reading this. And so I was just fascinated because I was like, "This is kind of my story. How does it end?" Josh: How long did it take you to get through it? Russell: I'd say about two months. I got a lot of it done on the boat, and then I got into biking for a little while, so I was listening to it while I was biking. Josh: That's right, I remember that. Russell: I just kept biking and biking, like, "One more chapter, one more chapter." I'm in really good shape because of it. It's funny because one of the premises ... And they don't say greed is good, but there's a chapter, I think it's called Greed. And I remember, if you guys have ever seen Wall Street, Gordon Gekko talks about, "Greed is good," and I never understood that premise. Right? In the book, they start talking about that, how greed is what drives this whole thing. Is it called Greed? Josh: I'm trying to find it. Russell: Utopia of Greed, yeah. Josh: And then Anti-Greed. So Utopia of Greed and then Anti-Greed. Russell: So what's interesting is ... because all of us are taught that greed is bad, right? That's just, like, you shouldn't be greedy. That's, I think, a principle that's instilled in most of us, but then I think about, for me, when I started this business, why did I start this business? I wanted to make money. That's greed, right? And you think about any of us, we go through a phase in all of our lives that greed is the driving factor. Right? When I wanted to become a good wrestler, I wanted to become a good wrestler. It was greedy. I went and got coaches and spent all my time and it was a very selfish time in my life. Not that it's bad, but it's a very greedy time. Right? Kids, when they're first born ... I love my kids. They are so ... not in a bad way, but they're greedy. It's about them. Right? Josh: Right. Russell: And it's this growth phase where growth ... You have to be greedy. You're in the growth phase. Right? When you're trying to learn, you're sucking things and you're learning and you're not contributing it. You're just learning, you're growing. And it was interesting because, as I'm going through this, I'm like, the greed is what got me into business. Right? And it's what got these things started and then the byproduct of that is jobs were created and things ... All the byproduct of it is ... I think, in the book, how it justifies it, Hank Rearden going after ... he wanted to build his steel and make a bunch of money, created tens of thousands of jobs and changed the world and changes all these things. Russell: And so the premise of the book is that greed is this driving force that gets you moving. And it is. If you think about any aspect of your life, from sports to education, to business, to everything, it starts with greed. Now, we'll go deeper into this. I don't want everyone to think that I'm just into this for the greed, because there's a transition point. We'll talk about it in a minute, but there's a transition point from growth to contribution that happens, but that's in the book where it starts talking about that. Russell: And I remember I was on the greenbelt here in Boise, riding my bike with James P. Friel, listening to that chapter. And I was trying to think, "Is this true? Did I get started because of greed?" And it's like, yeah, I didn't start a business because I wanted to change the world. Eventually, that happened, but it wasn't like it was ... Greed was the driving force that moved me forward. I think it moves all of us forward such a long time. And as I was listening as I'm riding my bike, I'm like, "Yes, I understand this," and the other half of me was like ... I started thinking about my spiritual upbringing. Right? Josh: Yeah. Russell: I'm very Christian. I'm a member of the Church of Jesus Christ Latter-day Saints and I started thinking about Christ and his teachings, which are, honestly, the opposite of that. Right? It's like- Josh: Really the polar opposite. Russell: Yeah. Josh: Which it's funny, whenever you say that, people are like, "You know, Jesus was a socialist." I hear that a lot. I'm like, "You need to read the Bible." Anyway, but I think a lot- Russell: But he definitely is way more liberal leaning, 100%. Josh: Right, right. And I think that that's where Republicans, conservative, traditionally on that side of the aisle, fiscally Republicans get into trouble is where we're like, "Yeah, we're Christians, but we also want to get rich," and they never talk about all this other ... People like to use Christianity, I feel like, when it's convenient. Russell: We call it cafeteria Christians. Josh: Right. Russell: They pick and choose the things off the menu they want. Josh: Right. And then they go through and do it. So I definitely want to dive further into that, but continue that. Russell: Yeah. So that started this question in my head, though, of just, so is greed bad then or is it good or where does it fit in the whole grand scheme of things? Because it is something that's instilled in all of us from birth. Right? When you're born, you're a baby, if you didn't have greed, you would just die. Right? It's me. I need food, I need love, I need shelter. It makes you cry, which creates people coming to you. Greed is a driving force that's instilled in humans from birth, right? When we come here, greed is what helps us survive the first part of our life. Russell: And first, I was having this conundrum. I'm just like, "God, is this book evil? I don't know what to do with myself." Right? But all good things in my life that happened happened initially because the seed of greed started me on motion, started me in momentum. And then I started thinking, if you've read the Expert Secrets book, which- Josh: If you haven't, come on. Russell: If you haven't, you must hate money. Come on. No, but in the beginning of Expert Secrets book, I talk about this concept, as well, where as an expert, there's two phases to go through. The first is a growth phase. Right? I want to be an expert in whatever. You go through and you're a consumer, consuming everything. And that's greed, right? And then there's this transition point where, eventually, you keep trying to grow, grow, grow, grow, trying to learn everything, going there. I'm listening to all the podcasts, I'm reading all the books, I'm growing, growing, growing. And eventually, there's this point. I remember feeling it in multiple parts of my life. In wrestling, I felt it. In business, I felt it where you can't continue ... The ability to grow through consumption slows to almost a halt where you can't continue to grow. Right? Russell: I've shared this story. I think I shared it in the book with wrestling. I was a really good wrestler. I was a high school state champ. I took second place in the nation. I was an All-American. And my senior year, I got invited to go to a wrestling camp. My coach was like, "Hey, do you want to come coach wrestling this summer?" And I was like, "Why would I do that? What's in it for me?" Josh: Before you go on here, I want to ask you something. So you're riding your bike, wrestling with this whole greed thing. Is this the first time that you've thought about greed in this way? Russell: 100%. Josh: And this is, what, six months ago? Russell: Not even that. Maybe four months ago. Josh: So you've built most of what ClickFunnels is today and now this is the first time you're really sitting down and wrestling with this idea of greed and is it bad, is it good, what's the balance there and stuff like that? Russell: Yeah. Josh: That's fascinating. Russell: Yeah. It never crossed my mind, really. And then it became this thing where it bothered me because I'm like, "Oh, my gosh. I don't want to be a greedy person." You know what I mean? Josh: Right. Russell: I'm like, "I don't feel like I am," but I was stuck. I couldn't figure that out. Right? And so I'll rewind to the wrestling story because I think it will set it up. Josh: Yep. Russell: But my senior year, again, I'd been growing as a wrestler. I was going to camps. I was getting coaching. I was greedy. I was sucking up everyone's brainpower I could and I became a really good wrestler because of it. And then my coach asked me to go coach a wrestling camp. So I say yes, go to the wrestling camp, and I remember he's like, "Okay, I need you to teach ..." My best move… I'm really good at tilts. So for all the wrestlers out there, I'm really good at cheap tilts. And he's like, "Teach these kids how to do a cheap tilt." Russell: And I was like, "Okay." So I walk out, there are like 30 kids. I'm like, "Yeah, you do this. You just do it like that." And they all look at me and they go try and they try to do a cheap tilt and they all just fall apart. I'm like, "Are you guys dumb? This is not that hard." I'm like, "Come back in, come back in. No, you did it all wrong. This is how you do it." I show them again, like, "Go do it." They go back out, nobody can do it. Russell: And then, all of a sudden, I'm like, "Gosh, they're missing something. What is it?" So I have them come back in and I start breaking down, "Hey, for the move to work, your hips have to be here, your legs have to be here." I start walking through all the things. And as I'm doing that, I start realizing, "Oh, the season why I'm able to do this is because of this," and I started realizing what I was doing as I was teaching people. And as I taught it to people, then the kids started doing it and they got better and better. And all of a sudden, I started realizing, "Oh, my gosh. This move works because of this." Russell: And now that I was aware of the situation, now I was able to make these tweaks and stuff on my own. And I realized that, but coaching the kids, that was the next-level growth. It was a shift from selfish greed growth to contribution. So that's why I started coaching camps every year and that's why I went from slowing down my progression to, all of a sudden, it sped back up again by shifting from growth to contribution. Okay? Russell: And so I think the same thing happens in business, right? I got in business because that seed of greed is in us. It gets us moving, gets us in the momentum. And some people never get out of that. Some people live their entire lives chasing greed and they die and it's a tragedy, but I think for most people, there's this transition point. And I don't know where it happens. It happens different spots for everyone where, all of a sudden, you realize ... you make the money, you started the business, and you realizing how unfulfilling that is. You're tapping out. You're like, "I'm not growing anymore. I thought I wanted money, but I don't. I want growth. That's what we're here on this planet for, is to grow as humans. Right? Russell: You don't get that and, all of a sudden, you realize money's not fulfilling and then you start seeing the other people you're contributing to and you're helping. Then it shifts to ... We hear people talk about, "This is about impact, about growth, it's about helping other people," and that's that transition. That's charity, love. That's pure love of Christ. It's that transition, but greed is the seed that gets us moving, right? And so there's this handoff. It doesn't happen all the time. And are you guys cool if I share scripture stuff? Because- Josh: 100%. Russell: -all this stuff is scriptural. It's not just- Josh: They don't get to decide, Russell. I get to decide. It's my podcast. You can talk about whatever. Russell: If you hate scripture, just close your ears and go, "Blah, blah, blah." So I wrote down some scripture. This is a scripture because it illustrates this point. I think it's so good. Josh: Also, I just want to say, Russell Voxed me and he said that this is the first episode of a podcast that he's ever prepared for. When you said that, I'm like, "Ha! I was the first for something for Russell. Let's go." Russell: I want to be ready. Okay. So this is a scripture. It says, "For the natural man is an enemy to God and has been from the fall of Adam and will be forever and ever." I'm going to stop right there. Okay. So natural man is an enemy to God. Why is that? We're born. We have this greed inside of us, so the natural human is the enemy of God because we're chasing after greed. Right? But God gives us that seed because it creates momentum. It creates motion. It creates us doing something. Right? Russell: And then it says in here, it says, "For the natural man is an enemy to God and has been from the fall of Adam, will be forever and ever," and then this is the transition point, "unless he yields to the enticings of the Holy Spirit." So he's greedy forever, forever and ever, unless he yields to the enticings of the Holy Spirit and puteth off the natural man and becometh a saint through the atonement of Christ, the Lord, and becometh as a child, submissive, meek, humble, patient, full of love, willing to submit to all things which the Lord seeth fit to inflict upon him, even as a child doth submit to his father." Russell: So growth is the seed. It's the natural man. It's the thing we have that's ... It's good, right? God gives it to us because it gets us to do stuff, gets us to learn, gets us to not die in our crib because we need love and attention and to get fed. Right? So then it gets us off our butts, off the couches, us being producers that gets us moving. And if we're not careful, though, the natural man will destroy us. You see so many people who made tons of money and they destroyed themselves in their lives because they don't do that second thing, which is, "Unless he yields to the enticings of the Holy Spirit." Russell: That's the thing saying this is not about money, this is about the impact. Look at the people you're changing. And it shifts, right? If you make that shift, all of a sudden, now this thing you’re creating is not about greed, it's like, "Oh, my gosh ..." I remember, for ClickFunnels, when I had that transition was when I started seeing Brandon and Kaelin Poulin. I started seeing the ripple effect of their business. And I can name hundreds of people, person, after person, after person. Russell: I was like, "This isn't about money. This is about the ripple effect of what we've created in each person's life." Now, that's charity. That's love. Now the mission isn't about money. We don't care about the money. We keep score with money, but that's the mission, is the people's lives and the impact. And I think that's that transition where greed is the thing that gets us moving, but if we don't have that ... Russell: I think that's happened in the book. We talked about it. You said this at my house earlier, like, "A lot of people in the book seem like they have a miserable life." And it's like, yeah, because they never yielded to the spirit. They never made that shift. It was all greed to the point where they let everything collapse as opposed to the charity side of things. Josh: Yeah. So one of the things about the book ... And I'm sitting on the plane on the way over here and I'm like, "How do I articulate this?" Because that's always the hardest thing. You have this idea in your head and you're like, "How do I get it out and explain it in a way that somebody else can be like, 'Yes, I understand that?'" I'm going to go kind of political here for a second. I'm going to bring it back, too, specifically to the book. So I am pretty vocally a conservative. Right? I'm a blatant Trump supporter, very much so conservative when it comes to everything fiscal, but I call myself a libertarian because I actually think that I lean left on a lot of social issues. I think the government should stay out of gay marriage. Right? There's a lot of things that I lean left on, but when it comes to money and finances and things like that, I lean to the right. Josh: But the reason I lean to the right and I typically go with the right is because I like what the left is trying to do in concept. It's like, okay, there's a bunch of people that are really truly in need. I agree. We need to help them. The problem is is that the way they go about doing it, I so radically disagree with it. It's against everything that I stand for. Right? I'm like, it's not that I disagree with what you want to do, it's I disagree with how you want to do it. Josh: What's interesting is I feel like, in this book, I feel like it's the opposite. I actually don't agree with why they're doing it. This concept of ... I mean, Hank Rearden says it over and over again, "Everything that I do is for profit." That is it. Even to his friends. He took a bullet for John Galt, right? He gets shot. And John Galt thanks him for it. He goes, "You know I only did it because it's what I wanted to do, right?" Literally saves a guy's life. Josh: So it's all about what he wants and only for him and that's it. And it's profit and money and dollars. It's not about everything that he helps. And I'm like, I disagree with that premise, but what that leads to, I actually do like. And I feel like it's flipped compared to the world I'm living in now. Half the stuff that the Democrats ... I hate to… oh I want to go into politics so bad… Russell: Left and right. Josh: Yeah, the left. Guys, we're going to say left and right. Generalized here, right? Oh, my god, but generally speaking. And so when it comes to the whole greed issue, I'm like ... It's interesting to hear your perspective because I never, even throughout the book, I'm like, "Greed is a bad thing." And hearing your perspective, I'm like, okay, I understand what you're saying, but is it greed or is there some other driving ... If I were to ask you a year ago ... When were you in the heart of ClickFunnels, like a year and a half ago, two years? There was a time of your life when all you ... I know all you do is ClickFunnels, but when- Russell: It's the last six years of my life. Josh: But you know what I mean? Wasn't there a year or two period in there, in the growth phase, where 100% of everything you do was just ClickFunnels, ClickFunnels, ClickFunnels. It felt like you were going nonstop. It feels like you're a little bit more balanced now. Maybe not, but from the outside perspective looking in, it does. Anyway, during that time of growing ClickFunnels, before you read that, would you have described yourself as greedy? Russell: No. Josh: What would you have described yourself as? What's the word? Russell: I don't know. That's a good question. I was always trying to create stuff. It's art for me, right? So it's like I was trying to create stuff. I think, initially, I was creating for myself as opposed to, "Oh, my gosh. I create this for myself, but look what happens to the people." Josh: What point was that shift for you, though? Russell: You can see it in my marketing, by the way. And by the way, for those who are greedy capitalists who only care about money, it actually is a better marketing way, too. My marketing went from- Josh: For all you greedy capitalists out there, switch to being a contributor, you’ll make more money. Russell: Well, think about it. My marketing is always like, "Here's Russell. Here's how much money my funnel made. Here's how much ..." It was me talking about me all the time. And then I realized, "Who cares about me? I don't care about me. Let me show you what this person ... Let me show you all the results of the people we're serving, what's happening there," which first off, is better marketing and, second off, it's that transition where I was literally like, "Everything I've accomplished is stupid. What they're doing, that's the real ... What we're doing, that's the thing that's amazing." Right? That's the spiritual side of it. That's the thing where it's like, the thing that got you into motion now is doing good in the world. And when you start seeing that, it's like, oh, my gosh. That's so much more fulfilling and so much more exciting. Russell: And people ask me, "The last six years, why'd you keep getting up? Do you need more money?" I'm like, "No, that's not what keeps me up," but I can tell you 100 stories of people who ... literally the ripple effect of how many lives they've changed because I did my thing. Right? We made a documentary of the Two Comma Club and Jamie Cross has this whole part there where she's bawling her eyes out and she said, "Where would my family be if Russell wouldn't have fulfilled his God-given calling?" And every time I see that, I start bawling, myself. That's why, eventually, you start doing it. Right? Josh: But when did that shift happen? Russell: I don't know. It wasn't a day that it happened. The energy of it shifted. Right? I don't know. It gradually kind of happened. Josh: What's that? Dave: Tell them about your dad. Josh: Yeah. Russell: Dave, come on in. Dave's here. Dave, take the mic. Here. Dave: Yeah. No, honestly, I think… this has been one of those things. It's been fun for me to watch Russell from the sidelines here. I think, honestly, it was your dad's 60th birthday. Josh: Which was how long ago? Dave: I don't even know. Russell: Three, four years ago probably. Dave: But it was the reflection on that and it was the difference from having your hand raised versus ... because I remember you… Russell: Yeah, you want me to tell that story? Dave: Russell is a much better storyteller. I'll seed the thought, but I'll let him finish. Russell: All right. Josh: Oh, thank you Dave. Russell: Thank you. Interesting. Josh: Guys, we have a live audience here. Russell: So yeah, my dad turned 60 and we have our little family reunion every year we do. And so it was during his birthday. And I remember my mom gave him $60, six $10 bills. And so she gave them to him one at a time and said, "Okay, the first decade was one to 10. Tell us something you remember about that." He's like, "I don't remember anything back then." The second one, he's like, "10 to 20, that's when I was a wrestler. It was so much fun for me." And then, 20 to 30, he was like, "Okay, that's when I was starting my business, trying to figure things out and trying to get our family stable." 30 to 40, "That's when my kids were wrestling and I was coaching them." And then 50 to 60, he kind of went through everything. Russell: And then, after it was done, I asked him, I said, "Well, Dad, of all the decades, what one was the best for you?" Thinking, in my world, the best was going to be when he was a wrestler because I was like, for me, the greatest part of my life was when I was wrestling. And my dad said, "The greatest decade was when I got to coach you." I forgot that story until Dave said that, but I remember coming back and telling Dave and other people that I always thought the best part was being the all star. For my dad, the best part was coaching other people and seeing their hand raised. Josh: That was a good interjection there, Dave. Huh. Russell: …which was really cool.

Welcome to the recruiting hackers podcast. A show about innovation, technology and leaders in the recruitment industry brought to you by Talkpush the leading recruitment automation platform.Max: Hello, and welcome back to the recruitment hackers podcast. Today I have a very special guest on the show. I normally talk to people from the practitioner side. But today  I have the pleasure, the awkward pleasure of talking to what may be perceived by others as a peer or competitor as the chief of staff for Wade and Wendy.Wade and Wendy is one of  the early companies that got into the conversational AI for recruitment space and I first heard about this company, I think five years ago at the very beginning. Dave Mekelburg is the chief of staff and joining us today  for chats, which will be a little different and a little bit more about, I suppose, about chatbots. Right Dave? If that's okay with you. Welcome to the show!Dave: Great to be here. Always excited to talk about chatbots. I don't get to do it enough. Especially in this context. And I will say, you know, I cheat a little bit. So I'm our chief of staff and also our head of people. So I am technically a practitioner.I do oversee our recruiting and hiring. So I can speak a little bit to that. So I won't be a total foreigner, but I'm very excited to talk about chatbots and talk about, you know, what's happening in the recruitment mission: “hacking”. Max: Awesome. Were you the guy who came up with a job title conversational designer?Dave: Oh, that's a good question! Max: I picked that out from a blog post. By your CEO. And I saw that conversational designer and I fell in love with it so much that I immediately posted for that job, myself at Talkpush, you know, within a week. And I started collecting applications. We hire a bunch now, and it has taken off, and I always thought maybe you guys came up with the term.Dave: Oh, I would love to take credit for that. Let me think where we first probably encountered it. So there were some early, going way back in time, like PullString, which was like a Pixar backed, conversation design platform. We had met their team and they had somebody, they call it a conversation designer. I think Apple, in Siri, I think a lot of this Siri team was starting to use that phrase. But you know, certainly when we posted that job it got some ice, because people were like, conversation designer? I've never heard of that. Max: Yeah. We got the same thing. And I also... One of my heads of conversational design, she said that when she changed her job title from product manager to conversational designer, the volume of interest she got on LinkedIn also showed up. Considerably. So it's, it's not a good retention strategy, maybe a good hiring strategy. Conversational designer. Great place. A great way to advertise, but also not a great retention strategy because people will come out and try to hire them away from you.And so maybe if I'm lucky, I'll find out who came up with that term. And I'll be on a goose chase, Dave  I'll start looking at the people at Siri or at Apple to see if I can find the person who coined that. But yeah. Definitely chatbots have been around for longer than we've been around.Dave: That's definitely true, but they've, It's the rate of change... And I think you've probably seen us over the last few years. The rate of change has been astronomical and just in terms of the penetration, the familiarity from the average person that's interacting with the chatbot. When we first started, we were doing user testing and, you know, having people chat with the bot about work. Like talk to me about what it is you want to do and what it is you'd like to do.And it was such a novel experience for people. And now, you know, really up and down the... You know, across the country, in every corner. Everyone has some experience with a chabot, whether it's, you know, through a bank teller or through a customer service bot, you know, the depth of penetration has gotten beyond people that are interested in technology or people that are interacting with, you know, the hot new FinTech startup, things like that. And really gotten into the hands of the average person so that, you know, when we started, we built so much into the experience to make sure that this was intuitive and, it didn't scare people that, you know, might have some emotional, anxiety about talking to a bot about AI and automation in their lives. And get them to put, you know, trust in helping us get them the right opportunity and we're in between them and, you know, the right job.And that's the responsibility that we take really seriously. And we had to build an experience where people would trust and believe that we would guide them appropriately. Given that it's a technology experience. And I do think over the last few years, that comfort, that familiarity just looking at the feedback that we get and things like, that there's way less like, wow I've never  seen this before, too what a high quality conversational experience. We get feedback about the conversation design and that's just something that I think a few years ago, your average, you know, sales person and applying for an entry level job wasn't leaving feedback about our bots conversations design. Max:  I got completely thrown off. You're putting me back to 2018 or 2017, I was in India meeting with, I think it was Expedia, and I was presenting our technology chatbots for recruitment. And this gentleman, this engineer that I met started showering me with questions about natural language processing and how intensely have we mapped that out? And what is our taxonomy of not being tense? And I thought, where did I step into, I don't know, half the words he's using. But I haven't had that experience too often. Still most people  they're past the point of, I've never worked with a chatbot before. They still feel like it's a bit of a dirty word, and that it may ruin the candidate experience, but obviously if they're working with us they are past that as well. I guess it's a bit of a marketing job to change the perception and say, well it's not a chat bot, it's a conversational agent or, you know, it's a virtual agent, just different ways  of renaming it.  Our system is very much built on the handover to the human and having a hybrid experience, I think, and this is perception. I haven't really tested your product, but I think Wade and Wendy comes from a deep tech expertise where you have PhDs who work in your company. And so you're building intelligence that works without the human intervention, perhaps. Dave: Yeah. So, the notion of human intervention is a really interesting one. So let me lay out for you, a little bit of how we approach this problem. Right? And where we started from. We started from a place of recruiting that we saw. Our CEO and founder is pretty adventurous for deep tech and wearables for manufacturing and farming, you know, deep marketing tech in the early days of that industry. His first job out of college was as a recruiter, and he felt that pain of I love the problem. And everyone at our organization to a T, it's something that we screened for in our hiring process, is really excited about solving the hiring problem. Which is getting people the right opportunity as fast as humanly possible.And that experience kind of started it, you know, it is what bubbled this up. And there's so much wasted space when it comes to the recruiting process. So much time spent looking up email addresses and a dozen tools. And you know, spending all your time on LinkedIn, crafting the perfect email, you know, having the same 15 minute conversation over and over again, only to find out that the candidate, actually moved two years ago and they're not really, you know, they're not open to working in your location, all this kind of running in place.And you're never sure when you're a human recruiter connecting with a candidate, if this is the right fit. And as a candidate, you're not sure, like is it worth my time to even connect with this recruiter? And you have this kind of core problem in place, that we wanted to take that deep tech and automation approach to, which was, we want to clear out all of the road recruiting tasks that get in the way of humans coming together. So, when you say human intervention, our goal is to have as little human intervention in the bot, the chat experience itself. So, you know, in terms of what we do, our platform helps automate. And for an enterprise company it helps automate three core functions. Sourcing. So identifying a candidate for a role, engaging them in an informational interview. Getting them excited about the opportunity, a few basic qualifying questions, and if they're a fit, bringing them into the hiring process. Screening, so somebody applies to a job. They go through a first round, deep dive interview with our bot, all kinds of written texts.And the last is coordination. So scheduling, messaging, you know, don't forget your interview is tomorrow at 1:00 PM that kind of work. Our goal is to do all that. So recruiters can come in and see, okay, this candidate is excited, they check off all the boxes. Here's the AI recommendation that is leading to me to believe they're a fit. And I'm sure that this candidate is worth my time. Now let me as the recruiter, build a relationship, guide them to the hiring process and, you know, help get them across the finish line. We do believe that ultimately recruiting is still always going to boil down to a human decision making process. On the other side of the equation, we have a candidate facing a bot. So Wendy works at the enterprise and Wade, we put out into the world as kind of an AI career guide, and you chat with Wade about what you've done in the past, what you'd like to do there, and personality tests. So you can get a real sense of who you like to work with, how you like to work, why you work?Is it a matter of, I just want to grow my career in whatever way possible. I want to maximize my salary because I want to be able to take... Max: Wait, wait… Is this Wendy or Wade?Dave: This is Wade. Max: I would actually open up more to a Wendy than I would to  Wade but fine. Dave: So this is one of the things. And, I'm going to ask you a question, which I hope is not too uncouth because, you know, I'm on your show. One of the things that we saw from the beginning, which we were not ready for was. There's something about when you know you're chatting with an AI personality, and I know for you and for us,  that's key to the experience. Is letting people know, hey, this is not an immediate personality.There is a level of trust, people don't feel judged. And not everyone wants to open up to it necessarily, but we had in our early days, we had candidates sharing stories that recruiters, you know, that have been doing it for 20 years had never heard. People surviving, you know, terrorist attacks, people going into depth about a personal tragedy that they had overcome, and how it related to the job that they were applying for. And these really deeply personal stories. And when we would conduct, you know, surveys and user interviews afterwards, there's this theme of, you know, I wasn't sure about this, but once I started talking, I realized, you know what? I can just tell my story. And I can get it out of the way, and there's no judgment.And, you know, work is such a personal, specific context. Right? And I would love to hear from your side of the table, like what do you see when people are interacting with Talkpush? Like, how do they feel about it? Max: Well, first, to your points, I think it's a good medium for getting stuff out that would be sensitive. So, an exit interview would be a good medium to use chatbots because, you know, you're talking to an AI. And so you can say things as they are a little bit more, perhaps than if you're talking to HR. Because HR can pull back your salary, but the AI is not gonna hold back, hopefully.And on the matter of people opening up. We do, you know, very large volumes and most of it is you organizing, and sourcing, and screening, and coordinating. But really, we try to keep the sourcing bids, which is like asking questions directly to the job as lean as possible.And then screening is also quite lean and this is the bulk of the volume. And we collect answers that are text, but also audio and video. So a video is the chance for people to express their creativity and we see some nice things there, of course. And on text it's usually a little bit faster, because people are on their mobile phones and they're not going to go on forever.So yeah, that's how I would describe it, but there are  different pools of population because we work in eight or ten countries that have different reactions. So in some markets, the people are more warm and they try to convince the bots to, you know, treat them nice and put them at the top of the list. Then there's more flowery language. Dave: Yeah. I'll never forget. The first time we had, you know, Wendy the chat bot personality that is doing the interviewing basically, “she's the recruiter”. And, we had somebody go through an interview and at the end, you know, we have a little wave emoji and Wendy says, you know like, thank you so much the hiring, you know, the human hiring team will get back to you. Something like that, something from the early days, whatever it said. And people were responding, Thanks, Wendy. Hope you have a great day! And people know Wendy is a robot. We had like robot jokes in some of the early chats, like people knew. But you know, there's that notion of, well if I'm going to chat with it, I'm going to treat it like a, you know, like it's a thing, like I'm going to call it by its name. It's Wendy!Max: We got the same thing. I mean, it got to the point of like, Oh I really hope that you're going to get back to me sooner because I really need this job because blah, blah, blah my daughter needs a surgery something like this.Dave: Oh my goodness. Yeah...Max: At the end of the application process. Which, you know, I mean it makes my heart bleed, of course, but the bot doesn't have a heart! Dave: Sorry. There's nothing in our evaluation algorithm about, you know…Max: Additional circumstances. Dave: Yeah.Max: All right. Well, let's switch gears a little bit, and maybe it sounds like we should have a separate podcast where we put our bot people with your bot people and sharp out stories. That would be fun. It would be for a different kind of audience, my audience are mostly TA professionals, and  they could get a little bit bored. So, one thing that... We kind of started at the same time, right? So when did you launch a Wade and Wendy? Dave:  Wade and Wendy started in, you know, like on the couch, like a dollar and a dream idea in 2015. And we've been building ever since. Max: Yeah. So around the same time, I may be a few months older, but we only did our first text bot in 2016. After our initial run was doing IVR voice collection over the phone. Dave: Awesome. Max: And sometimes people ask me, are you still a startup? And I don't know what to tell them because, yeah, the company is more mature five years in, but people want to work in a startup because it's cool and exciting. How do we keep it cool and exciting by, you know five years in, when we have not yet totally taken over the world? Certainly our numbers are very high and, you know, we have purpose around that, but yeah, what are your thoughts on how to keep it fresh? And I'm also curious, you know, to extend a little bit the conversation, on the retention number, which is too high. Dave: Oh, interesting. Max: Because I think like the company from 5 years ago did not need the same people as it does now.Dave: Yep. So that's... What a question! I'll work backwards. I'll enter that first because I think that will help inform sort of, how do you keep it fresh? You know, I think. I completely agree with your point, which is that, you know, at every stage of a company you need different types of personality.The reality on the ground was really different. When we were tackling an incredibly difficult idea in an immature tech space and market, you know, in 2015, 2016, really up until probably like early 2019. It was when we would talk to prospective clients, we had to explain what a chatbot was, what AI was, why HR was going to benefit from AI and what that even meant. When it came to the problems that we were solving and  just the ability to manage a chat conversation and what that took. And understanding from a design and conversation perspective, through the hard tech of, you know, how do you build for the future with this? It was so much open field, just an empty meadow with grass in every direction. And we had to walk forward. Right? And that is not for everybody, that level of uncertainty of rapid rate of change, of you know, chaos to a degree because I'll never forget when we went live with the first customer, because you know I'd been on a zero to one startup journey before, so I had a distinct memory then of what happened and how disruptive and special having a client like was to, you know, an organization that was, you know, under the hood, trying to solve these deep tech problems.Certainly we had user testing all the time, but it's so different when you're actually live. So you know, the person that is engaged and excited, with that chaos, and certainly we do have a chunk of our core team that has been with us from those early days, you know, when you get to a level of, okay this is a thing, and there's still so much green grass and there's still so much to do, but there is a clear pathway and the people that we have now, you know, there are people that I think if they had joined the organization four or five years ago, it would have been miserable. You know, being the fifth person on a team, trying to solve this as a really different lived experience than, you know, being an employee 12 or 15 or 20 or whatever it is. And that changes as you go.Max: Some people would be addicted to startup after startup after startup. And you see those resumes where people spend 6 to 12 months and, you know, you're thinking, okay either this person has serious ADD and is not reliable or perhaps, that's just the way gear. They just have to go at the earliest stage and just keep doing that over and over again. Dave: I call it. I have this notion, that we talk about a lot, which is startup time. And the earlier you are at a startup, both in terms of company size and like development life cycle, if it's a tech startup. Those early days, every month, you should count as six months!So, you know, six months at an early stage startup, when it's five people, feels like three years of sort of life experience. And as the company grows, as things become more predictable, that starts to flatten out. We're like, okay, five years at, you know, a late stage tech company is five years. But if you're part of that first year, there's so much emotion and complexity and raw hours that go into those early days that it's almost as if you're operating on a different calendar.And certainly there are people, you know, that were on our journey for six months, you know, we have a couple of those, especially some junior folks that were interns and things like that. And you know, to this day we have relationships as if we've worked together for a decade, just because those six months really forged that time. And it was a really wonderful kind of moment for all of us. Max: So, your alumni, your best alumni, they stay in the startup world for the most part? They moved on to their own thing? Dave: It depends. And we've watched people go to a giant company and then realize like, you've been at it for long enough where a couple of people now in the second thing afterwards, worked for, you know, a fortune 50 company for a couple of years, and we're like, no I missed that! So most went on to start ups, in some capacity, but a handful went to the big places where everybody else is.Max: Yeah it paid the bill!Dave: Yeah, what motivates you is different for everybody. And if it's an awesome paycheck, which you can really get at a giant company, then, you know, by all means go after it. Max: I think so, right? I was saying conversational designers will find jobs and you can go work for Microsoft anytime, and probably get something there. Well, other tips, that I can appropriate, on how to keep the excitement strong? Especially in these troubled times where we cannot see each other in person? Dave: So this is the advice that I got.  Hopefully you can use it. Both you Max and you felt listener at home, or wherever you're listening to this. You know, when one of the things that... The entire employee life cycle is tied together. Right? So from the first time you hear about a company that you might work for in the recruiting process to, you know, 20 years down the line, when you're an AVP and just continuing to kind of move up the ranks, whatever it might be.But the best organizations that I've seen, really do illuminate their entire process with that organization's mission. Right? And, you know, I think about, you know, companies where I've gotten to see this up close are organizations like, you know... And I'm not... Some of these are clients, some of these are just companies where I've gotten the chance to talk to leaders and hear what they have to say. But I think about companies like PepsiCo or Comcast that have a real kind of message infused in what being an employee there means. And what the goals of that organization mean to kind of the broader world. Max:  wait a minute! PepsiCo, is the mission to sell more sugar? Dave: So it's, it's fascinating. PepsiCo has a wide range, and I have no affiliation with PepsiCo. So, I've just heard people at PepsiCo speak about their culture. So PepsiCo's internal mission is really oriented around diversity and personal development. So yes, they are selling corn chips and sugary drinks, and, a whole bunch of other things, which is, you know these are the complexities in the modern world, but internally in terms of their company's culture and what they do. They are deeply engaged with bringing their workforce into the community with service projects. They are one of the most diverse, leadership organizations. The fact that I even know this stuff just tells you see how, and again, I have no connection to PepsiCo whatsoever.The way they communicate that brand, the way it filters out throughout the organization keeps people, you know, not just engaged and motivated in a kind of transactional way, but in a deep way, people are committed to the development of the organization. Now selling sugary drinks isn't necessarily what drives me every day, you know, but for us, we're lucky and I'm sure you feel the same way. We're oriented towards this really powerful problem. Right? Every day I get to come to work and I get to work on. Chipping away at the massive unemployment crisis that is affecting, you know, hundreds of millions of people across the globe.I get to work on issues of representation and diversity by trying to remove bias in the hiring process. I mean, if your work, if you're a recruiter, if you're a TA person and you're thinking about your team. Your team is on the front lines of some of the most important decision making that human beings make. where do they choose to work. Where they choose to spend their time. Max: It affects society.Dave: It's such an important thing. And, you know we do a lot to remember that. And to talk about that, we have an internal mantra, that we call 60 to 6, which is, today the average job search in America, and it's different the world over, but the majority of our team is based in the US. So this is the number we use.The average job search takes 60 days. So when you're looking for work, whether you're unemployed or you've decided it's time for a change, the average job search takes 60 days. We want to create a world where it takes 6. We want to make hiring 10 times faster, where you're not spending all your time searching and trying to eliminate the right and wrong job. We want the right job to come to you, and you are able to just opt in. For the recruiter, they don't have to spend all this time searching for candidates and putting people to the process. You just get the right candidate, you know they're the right candidate because you have all this data to suggest that it's the right candidate, and how it maps on to their future work at your organization. This notion of 60 to 6 and removing, you know, 54 days of not knowing how you're going to pay your bills, not knowing what you're going to be doing with yourself, just going crazy, sitting by yourself, like that is so powerful and illuminating. And, you know, I think that really helps keep things fresh. And for a startup, this is a little more specific to startup context, you keep hitting milestones along the way, right? You're never done. It's never like, okay, this is over. It's like we got this contract, or we're able to release this functionality, or this thing that we've been talking about for five years, since this was an idea on the couch, is now about to go live because of the work of dozens of people across the globe.That is so cool. and when you get to celebrate those kinds of victories, you know, it's just a reminder of why you get up and do all the unglamorous things that being at a startup requires. Cause it's not, I'm probably making it sound all, you know, sunshine and lollipops, but you know, it's a lot. And there's a lot of work that a big team in money can solve that you have to be scrappy and you have to find your clever way around it. And just one at a time. Max: Yeah. I think we're lucky or maybe not lucky. We picked the industry we chose to go after. And that was one of the reasons I would personally not be motivated to sell sugary drinks. But, you know, I'm gonna use what you said about PepsiCo and go chase some sponsorship money from Mountain Dew for this podcast. Dave: Yeah. A really extreme podcast!Max: Yeah. Great. Well, we could go on all day on these topics, and maybe we'll talk again, and maybe we'll have our bot people have a separate chat, but it was a real pleasure, a real treat having you on the show. Dave, thank you so much for sharing and, all the best  to you and your 60 to 6 mission! I'll see if I can tweak it and personalize it for my team.Dave: I would love that. Look, this is a, you know, one of the things that we talk a lot about, is that this is a community, right? And, you know, if you're solving these problems, these problems are bigger than any group, any company, things like that. And it's always exciting to talk to other people who care about these issues.So thank you so much for having me. I am excited to get to talk with you about this in this setting. And yeah, hopefully people are ready to chat with a bot about work now.Max:  All right. Awesome. Thanks Dave. Dave: Thanks Max. Max: I had such a great time interviewing Dave Mekelburg Chief of staff.Head of people at a Wade and Wendy. It's often an experience running a startup, which is very competitive, where  you're trying to grab the headlines and grab market share from your competition. And it's so refreshing and so nice to meet the competition. And remember that you are working on problems that are much bigger than your own. And much bigger than your own company. And then we had so much to learn from each other. So thanks Dave for participating. I hope you enjoyed our conversation, and I hope it didn't get too geeky for you, that you'll sign up for more on the recruitment hackers podcast.

Developing a pilot or a proof of concept is among the first steps to introducing XR into your industry, but that's only going to provide so much ROI unless you can fully implement that idea. Dave Beck from Foundry 45 discusses how to make that leap. Alan: Hey, everyone, Alan Smithson here. Today, we're speaking with Dave Beck, founder and managing partner at Foundry 45, an immersive technology company that develops enterprise level virtual reality training experiences. They've created over 250 experiences for notable clients such as AT&T, Coca-Cola, Delta, and UPS. We're going to be discussing going from PoCs, pilots, and case studies to full scale deployments. All that and more, on the XR for Business podcast. Dave, welcome to the show. Dave: Hey, Alan, thanks so much for having me on here. Alan: It's my absolute pleasure. I'm super excited. You guys have been doing so much work in the VR training space. First of all, let's just talk about, what is Foundry 45? How did you get into this? And we'll kick it off from there. Dave: I guess first off, it's nice to chat with you again. I went back and checked my email, and it looks like the first time you and I talked was way back in 2016. So a lot's happened in that time, hasn't it? So, OK, we put VR to work by creating virtual reality training experiences for enterprise partners. And we specialize in industrial-- think hard skills type training. I've actually been working in immersive technology for almost a decade now. Initially it was in augmented reality, which was something that we added on the side for a SAS product we built, that was actually our main business during that time. And we did a lot of stuff where you would hold up your phone or a piece of industrial equipment, and it would tell you where to wrench on it or how to change the filter, things like that. It was cool technology, but we pretty quickly realized that no one was going to hold a phone or an iPad over a piece of industrial equipment on an oil rig. They weren't going to set it down and start wrenching on something, and then pick it up with greasy hands. [chuckles] So what we wanted to do was hands-free AR, but the technology just wasn't there. We exited that company in 2014, and we were trying to figure out what we wanted to do when we grow up. Alan: You exited your company in 2014. Most people didn't even know what this technology was when you guys were exiting your first one and getting into the second. Think about that. Dave: Yeah. I mean, we were trying to figure out what we wanted to be when we grew up. And one of my co-founders bought an early innovators edition of Samsung Gear VR. Do you remember that one? Alan: I have the one with a solid strap on top. Dave: Yeah. Did you strap the Android phone into the headset? Alan: Exactly. Dave: Yeah. And you could use that camera on the back of the phone as a pass-through. Alan: Yes. Well, not very well, but yes, you could. Dave: Well, yeah, it's funny. You know where this is going, right? Because we wanted to use it for hands-free AR, but it didn't work at all. Alan: Not without making people very sick. Dave: Yeah, the processor wasn't good enough. It was super laggy, which kind of made it nauseating. So that wasn't going to work. But wow, VR was awesome. That's when we made the decision to start down our current path. Alan: And that was before ARCore and ARKit. So planer tracking really wasn't a thing. Slim mapping, it was not that easy to do. Dave: Yeah. I mean, just

Developing a pilot or a proof of concept is among the first steps to introducing XR into your industry, but that’s only going to provide so much ROI unless you can fully implement that idea. Dave Beck from Foundry 45 discusses how to make that leap. Alan: Hey, everyone, Alan Smithson here. Today, we're speaking with Dave Beck, founder and managing partner at Foundry 45, an immersive technology company that develops enterprise level virtual reality training experiences. They've created over 250 experiences for notable clients such as AT&T, Coca-Cola, Delta, and UPS. We're going to be discussing going from PoCs, pilots, and case studies to full scale deployments. All that and more, on the XR for Business podcast. Dave, welcome to the show. Dave: Hey, Alan, thanks so much for having me on here. Alan: It's my absolute pleasure. I'm super excited. You guys have been doing so much work in the VR training space. First of all, let's just talk about, what is Foundry 45? How did you get into this? And we'll kick it off from there. Dave: I guess first off, it's nice to chat with you again. I went back and checked my email, and it looks like the first time you and I talked was way back in 2016. So a lot's happened in that time, hasn't it? So, OK, we put VR to work by creating virtual reality training experiences for enterprise partners. And we specialize in industrial-- think hard skills type training. I've actually been working in immersive technology for almost a decade now. Initially it was in augmented reality, which was something that we added on the side for a SAS product we built, that was actually our main business during that time. And we did a lot of stuff where you would hold up your phone or a piece of industrial equipment, and it would tell you where to wrench on it or how to change the filter, things like that. It was cool technology, but we pretty quickly realized that no one was going to hold a phone or an iPad over a piece of industrial equipment on an oil rig. They weren't going to set it down and start wrenching on something, and then pick it up with greasy hands. [chuckles] So what we wanted to do was hands-free AR, but the technology just wasn't there. We exited that company in 2014, and we were trying to figure out what we wanted to do when we grow up. Alan: You exited your company in 2014. Most people didn't even know what this technology was when you guys were exiting your first one and getting into the second. Think about that. Dave: Yeah. I mean, we were trying to figure out what we wanted to be when we grew up. And one of my co-founders bought an early innovators edition of Samsung Gear VR. Do you remember that one? Alan: I have the one with a solid strap on top. Dave: Yeah. Did you strap the Android phone into the headset? Alan: Exactly. Dave: Yeah. And you could use that camera on the back of the phone as a pass-through. Alan: Yes. Well, not very well, but yes, you could. Dave: Well, yeah, it's funny. You know where this is going, right? Because we wanted to use it for hands-free AR, but it didn't work at all. Alan: Not without making people very sick. Dave: Yeah, the processor wasn't good enough. It was super laggy, which kind of made it nauseating. So that wasn't going to work. But wow, VR was awesome. That's when we made the decision to start down our current path. Alan: And that was before ARCore and ARKit. So planer tracking really wasn't a thing. Slim mapping, it was not that easy to do. Dave: Yeah. I mean, just

Some of the highlights of the show include:  The difference between cloud computing and cloud native. Why operations teams often struggle to keep up with development teams, and the problems that this creates for businesses. How Dave works with operations teams and trains them how to approach cloud native so they can keep up with developers, instead of being a drag on the organization.  Dave's philosophy on introducing processes, and why he prefers to use as few as possible for as long as possible and implement them only when problems arise.  Why executives should strive to keep developers happy, productive, and empowered.  Why operations teams need to stop thinking about themselves as people who merely complete ticket requests, and start viewing themselves as key enablers who help the organization move faster.  Viewing wait time as waste.  The importance of aligning operations and development teams, and having them work towards the same goal. This also requires using the same reporting structure.  Links: Company site: https://www.mangoteque.com/ LinkedIn: https://www.linkedin.com/in/dmangot/ Twitter: https://twitter.com/DaveMangot CIO Author page: https://www.cio.com/author/Dave-Mangot/ TranscriptAnnouncer: Welcome to The Business of Cloud Native podcast, where we explore how end users talk and think about the transition to Kubernetes and cloud-native architectures.Emily: Welcome to The Business of Cloud Native. I'm your host, Emily Omier, and today I am chatting with Dave Mangot. And Dave is a consultant who works with companies on improving their web operations. He has experience working with a variety of companies making the transition to cloud-native and in various stages of their cloud computing journey. So, Dave, my first question is, can you go into detail about, sort of, the nitty-gritty of what you do?Dave: Sure. I've spent my whole technical professional career mostly in Silicon Valley, after moving out to California from Maryland. And really, I got early into web operations working in Unix systems administration as a sysadmin, and then we all changed the names of all those things over the years from sysadmin to Technical Infrastructure Engineer, and then Site Reliability Engineer, and all the other fun stuff. But I've been involved in the DevOps movement, kind of, since the beginning, and I've been involved in cloud computing, kind of, since the beginning. And so I'm lucky enough in my day job to be able to work with companies on their, like you said, transitions into Cloud, but really I'm helping companies, at least for their cloud stuff, think about what does cloud computing even mean? What does it mean to operate in a cloud computing manner? It's one thing to say, “We're going to move all of our stuff from the data center into Cloud,” but most people you'll hear talk about lift and shift; does that really the best way? And obviously, it's not. I think most of the studies will prove that and things like the State of DevOps report, and those other things, but really love working with companies on, like, what is so unique about the Cloud, and what advantages does that give, and how do we think about these problems in order to be able to take the best advantage that we can?Emily: Dive into a little bit more. What is the difference between cloud computing and cloud-native? And where does some confusion sometimes seep in there?Dave: I think cloud-native is just really talking about the fact that something was designed specifically for running in a cloud computing environment. To me, I don't really get hung up on those differences because, ultimately, I don't think they matter all that much. You can take memcached, which was designed to run in the data center, and you can buy that as a service on AWS. So, does that mean because it wasn't designed for the Cloud from the beginning, that it's not going to work? No, you're buying that as a service from AWS. I think cloud-native is really referring to these tools that were designed with that as a first-class citizen. And there's times where that really matters. I remember, we did an analysis of the configuration management tools years back, and what would work best on AWS and things like that, and it was pretty obvious that some of those tools were not designed for the Cloud. They were not cloud-native. They really had this distinct feel that their cloud capabilities were bolted on much later, and it was clunky, and it was hard to work with, whereas some of the other tools, really felt like that was a very natural fit, like that was the way that they had been created. But ultimately, I think the differences aren't all that great, it just, really, matters how you're going to take advantage of those tools.Emily: And with the companies that you work with, what is the problem or problems that they are usually facing that lead them to hire you?Dave: Generally the question, or the statement, I guess, that I get from the CIOs and CTOs, and CEOs is, “My production web operations team can't keep up with my development teams.” And there's a lot of reasons why those kinds of things can happen, but with the dawn of all these cloud-native type things, which is pretty cool, like containers, and all this other stuff, and CI/CD is a big popular thing now, and all kinds of other stuff. What happens, tends to be is the developers are really able to take advantage of these things, and consume them, and use them because look at AWS. AWS is API, API, API. Make an API call for this, make an API call for that. And for developers, they're really comfortable in that environment. Making an API call is kind of a no brainer. And then a lot of the operations teams are struggling because that's not normal for them. Maybe they were used to clicking around in a VMware console, and now that's not a thing because everything's API, API, API. And so what happens is the development teams start to rocket ahead of the operations teams, and the operations teams are running around struggling to keep up because they're kind of in a brand new world that the developers are dragging them into, and they have to figure out how they're going to swim in that world. And so I tend to work with operations teams to help them get to a point where they're way more comfortable, and they're thinking about the problems differently, and they're really enabling development to go as quickly as development wants to go. Which, you know, that's going to be pretty fast, especially when you're working with cloud-native stuff. But I mean, kind of to the point earlier, we built—at one of the companies I worked at years ago—what I would say, like, a cloud environment in a data center, where everything was API first, and you didn't have to run around, and click in consoles, and try to find information, and manually specify things, and stuff like that; it just worked. Just like if you make a call for VM in AWS, an EC2 instance. And so, really, it's much more about the way that we look at the problems, then it is about where this thing happens to be located because obviously cloud-native is going to be Azure, it's going to be GCP, it's going to be all those things. There's not one way to do it specifically.Emily: What's the business pain that happens if the operations team can't keep up with the developers? What happens? Why is that bad?Dave: That's a great question. It really comes down to this idea of an impedance mismatch. If the operations teams can't keep up with the development teams, then the operations teams become a drag on the business. There's so much—if you read the state of DevOps reports that are put out by DORA research and—I guess, Google now, now that they bought it—but they show that these organizations that are able to go quickly: the organizations that are able to do deploys-on-demand, the organizations that are able to remediate outages faster, all those things play into your business's success. So, the businesses that can do that have higher market capitalization, they have happier employees, they have all kinds of fantastic business outcomes that come from those abilities, and so you don't want your operations team to be a drag on your organization because that speed of business, that ability to do things a lot more easily, let's even call it like a lot more cloud-native if you want, that has real market effects. That has real business performance impacts. And so, if you look at the DevOps way of looking at this—like I said, I've been pretty involved in the DevOps movement—really the DevOps is about all the different parts of the organization working together in concert to be able to make the organization a success. And the first way of DevOps, you're talking about systems thinking, you're looking at the overall flow of work through the system, and you want to optimize that because the faster we can get work flowing through the system, the faster we can deliver new features to our customers, bug fixes to our customers, all the things that our customers want, all the things that our customers love. And so if you're going to optimize flow of work through the system, you definitely don't want work slowing down inside the operations part of the system. That's bad for the business, and that's bad for your business outcomes.Emily: And how do you think companies realize that this is a problem? I mean, is it obvious or not?Dave: I think it's one of those things like I always talk to people about process right? When do we want to introduce process? a lot of startups are like, “We need more process here, we need more process there.” And my advice to everybody is always, use as little process as possible for as long as possible, and when you need that process, it will make itself known. The pain will be so obvious that you'll be like, “Okay, we can't do this anymore this way. We've run this all the way to the end, and now we have to change things, and now we have to introduce process here.” And I think that it becomes pretty obvious to certainly the companies that I work with. At one point where they're like, “This isn't working, I'm getting my development leadership coming to be saying ‘I'm waiting for this, I'm waiting for that. I'm waiting for this. I'm waiting for that. I don't have permission to do this. We're being blocked here.'” all the things that you don't want to be hearing from your development leaders because what they're expressing is their pain of being inhibited; their pain of being slowed down. And I think it's just, like, with the process thing, I think at some point, the pain becomes obvious enough that people say, “We have to do something.” I remember talking to one company, and I was like, “Well, what do you want out of this engagement? What's your end goal?” And they said, “We'd like it for our developers to show up every day and be really happy with the environment that they're working in.” And so, you can hear it there, right? Their developers are not happy. People are coming from other companies, and they're going to this company—and I certainly won't name who they are—but they're going to this company, and they're saying, “Hey, when I worked at this other place, I didn't have all this. I didn't have all these things stopping me. I didn't have all these things inhibiting me.” And so that's why, what I said in the beginning, it's things that I'm hearing from CEOs, and CTOs, and people in those positions because at some point that stuff is just bubbling up and bubbling up, and the amount of frustration just really makes itself known.Emily: Why do you think COOs care how happy their developers are?Dave: Well, I mean, there's tons of studies that show the happier your developers are, the more productive they are. I mean, look at the Google rework stuff about psychological safety. Google discovered after hiring a professional psychology researcher to determine who were their highest performing teams, their highest performing teams weren't the teams that had the most talented engineers; it wasn't the people who went to MIT; their highest performing teams weren't the ones who had the best boss, or the coolest scrum master, or anything like that. Their highest performing teams were the teams that had the most psychological safety. People who were able to operate in an environment where they felt free to talk about the things that maybe weren't going well, things that could be improved, crazy ideas they had to make improvements, stuff like that. And I don't think that you can be on a team that's unhappy and feel like there's a lot of psychological safety there. And so, I think those things are highly correlated to one another. So, I mean, obviously, the environment that's necessary for psychological safety goes far beyond whether or not my Kubernetes cluster is automatically deploying my Docker containers; that's certainly not the case. But I think it's important to recognize that if developers are in an environment where they feel empowered, and they're not being inhibited, and they can really focus on their work, and improving things, and making things better, that they're going to produce better work, and that's going to be better for companies and certainly their business outcomes.Emily: And bringing it back to cloud-native a little bit. Can you connect for me how a cloud-native type architecture helps bring operation teams up to speed or helps remove these roadblocks?Dave: Yeah. Well, I think it's a little bit of the reverse, right? I think that the successful operations teams are the ones who are enabling these cloud-native ways of looking at the world. I think there used to be this notion of, if you want something from operations, you open up a ticket, and then operations goes and they do the ticket, and then they come back to you and say, “It's done.” And then, this never-ending cycle of sending off something and then waiting, and then sending off something, and waiting. And in cloud-native environments, we don't have that. In cloud-native environments, people are empowered and enabled, to go off and deploy things, and test things, and remediate things, and do dark launching, and have feature flags, and all these other things that, even though we're moving quickly, we can do that safely. And I think that's part of the mind shift that has to happen for these operations teams, is they need to stop thinking about themselves as people who get things done, and they need to start thinking about themselves as people who are enabling the whole organization to go faster, easier, better. I always talked to my SREs—Site Reliability Engineers—who used to work for me, and I'd say, “You have two responsibilities and that's it. And this is, in order, your first responsibility is to keep the site up.” That sounds pretty normal, right? That's what most operations teams feel like they've been tasked with. And I'm like, “Your second responsibility is to keep the developers moving as fast as possible.” And so really, when you start taking that to heart, keeping developers moving as fast as possible, that's not closing tickets as fast as you can. That's not keeping the developer moving as fast as possible, that's enabling developers to have self-service tools, and have things where they want to get something done and it's very painless for them to do that. We used to launch EC2 instances at one of the companies I was working with, where we had gotten it down to a point where you just said what kind of machine you wanted, and then that was it; and you were done. And everything else got taken care of for you: all the DNS, all the security groups, routing, networking, DNS, like, everything was all taken care of, all the software was loaded. There wasn't anything to do but say what you wanted. And we actually were able to turn that tool over to the developers so they could launch all their own stuff. They didn't need us anymore. And I think that's really creating these cloud-native ideas. Certainly, a lot of that stuff is part of the cloud-native tooling, now. This was a few years ago, but really it's enabling the developers to go as fast as possible. We could have said, “Hey, you want a machine? Open up a ticket, and it's so easy for us to spin up a machine.” But we didn't do that. We took it to the next level, and we empowered them, and we allowed them to go quickly. And that's really the sort of mental shift that the operations teams have to make. How do we do that?Emily: I have to say, I have never been a developer, but whenever anyone talks about this process of submitting a ticket and waiting for it to get addressed, it just sounds like hell.Dave: Yeah. Well, if you look at it from a lean manufacturing, Toyota kind of thing, all that wait time is waste. In lean, they call that waste. It's a handoff: there's no work being accomplished during that time, and so it's waste in the system. And so Toyota is always trying to move towards—I can't remember they call. It, I think it was, like, one piece flow, or something like that where basically you want work to be happening at all times in the system, and you certainly don't want things sitting around. And so, developers don't want that either. Developers want to put things out there. They want to see, does this work? Does this not work? And when you enable developers to have that kind of power and have that ability to go really fast, there's all kinds of like things that we can enable for the business that help cost savings, better security, all kinds of stuff far beyond just simple, “Hey, here's more features. Here's more features.”Emily: How easy do you think it is for operations teams to sort of shift to think, like, “Our job is to make things as easy as possible for developers?”Dave: I don't think it's that hard, actually, mostly because if we're starting to look at things from a DevOps mindset, we're understanding that the whole goal is to optimize the entire system; it's not to optimize a single point in the system. And I always advocate that operations teams report up through the same reporting structure as the engineering teams do. The worst thing you can do is silo it off so all the operations teams report to the COO, and all the engineering teams report to the CTO. Like, that's awful because what you want to do is you want to align the outcome so that everybody's working towards the same goal, and now we can start to partner up together in order to be able to achieve those goals. And so, one of my favorite examples of this from, like, enabling the developers to go fast, and doing that in partnership with operations was, I worked at a company, and we had a storage system, and we were storing all this stuff in a database, and we were paying a lot of money to store all this data for our customers. And that's what the customers were paying us for, was to store their data. And so the developers had this idea that they wanted to try this other way of storing the data. And so, we worked with them—the operations teams work with them, “How do you want to do this? What kinds of things do you need? What's going to work best? Is this going to work best? Is that going to work best?” And we had a lot of collaboration, and, “Here's where we're going to launch these new things, and we're going to try them out. And this is how we're going to try them out.”And it wasn't a process that happened overnight: from beginning to end of this project, it probably took, I don't know, a year and a half or something like that, of iterating, and trying, and testing, and making sure it's safe, and all these other stuff. But in the end, we wound up shutting off the old database system and talking to the engineers about what that meant for the business. They said a conservative estimate would be that we saved the company 75 percent on storage costs. That's the conservative estimate. I mean, that's insane, right? 75 percent for their biggest cost. That was the biggest cost of the company, and we knocked it down by 75 percent, at minimum.And so this idea of enabling this cloud approach of going quickly, and taking advantage of all these resources, and moving fast without impediments, that can have some major impact. And it's not operations teams doing that; it's not development teams doing that; it's operations and development teams doing that together in partnership to achieve those pretty awesome business outcomes.Emily: In that particular case, who had the initial push? Who had this initial idea that let's figure out a better way to approach storage?Dave: Well, I mean, we got a challenge from the business. The business said, look at our costs. Look at what we're doing. Are there ways that we can improve this so that we can improve our profitability? And so it was a challenge. And I think the best thing about that is, it wasn't the business telling us how to do it; it wasn't people saying, here's what you should do. The business is saying, “If this is a problem, how do you solve it?” And then they, kind of, got out of our way and said, “Let the engineers do their engineering.” And I think that was kind of fantastic because the results were exactly what they wanted. But the business is going to look at the problems from a business perspective, and I think it's important that as engineers, we look at the problems from a business perspective as well. We're not showing up for work to have fun and play with computers. We're showing up at work to achieve an objective. That's why we get paid. If you want to hobby around with your computers, you can hobby around at home, but we're getting paid at work to achieve the goals of the business. And so, that was the way that they were looking at the problem, and that's the way that we wound up looking at the problem. Which is the correct way?Emily: Do you have any other notable examples that come to mind?Dave: Yeah, I mean, this idea of cloud and being able to go quickly, we had this one problem with that—actually, with that same database engine, which is hilarious, before we wound up replacing it, where we were upgrading the software from one version to another, and we're making a pretty big jump. And so, we spun up the new version of the software; we loaded the data on, and we started seeing how their performance was. And the performance was terrible. I mean, not just, we would have trouble with it; it was unusable. There was no way we could run the business with that level of performance. And we're like, “What happened? [laughs]. What did we do here?” And so, we went and looked in GitHub at the differences between the old version of the software, and the new version of software. And there was, like, 5000 commits that had happened between the old version and the new version. And so all we had to do was find out which of those 5000 commits was the problem. [laughs]. Which, that's a daunting task or whatever. But the operations team got down to it, and we built a bunch of tooling, and we started changing some things and making improvements so that we were able to spin up clusters of this software and run a full test suite to determine whether this problem still existed. And that was something we could do in 20 minutes. And so then we started doing what's called git bisecting, but we started searching in a certain kind of pattern, which I won't get into, for which of these—where was the problem? So, we would look, say in the middle, and then if the problem wasn't there in the middle, then we would look between the middle and the right. If it was there, then we would look between the middle and the left. And we kept doing this bisect, and within two days, we had found the exact commit that had caused the problem. And it was them subtracting, like, a nano from a milli, or something like that. But going back and talking to the CTO afterwards, I said, “You know, if we hadn't built these tools, and we hadn't had this ability to really iterate super quickly in the Cloud, what would you have done?” And he was like, “I have no idea.” He's like, “Maybe we would have spent a couple of days and then given up, maybe we would have just gone in a completely different direction.” But that ability to be able to work so effectively with these cloud tools, and so easily with these cloud tools, enabled us to do something that the business just would just not have had the opportunity to take advantage of at all. And so that was a major win for being able to have operations teams that think about these problems in a completely different way.Emily: It sounds like, in this particular company, the engineering teams and the business leaders were fairly well-aligned, and able to communicate pretty well about what the end goals are. How common do you find that is with your clients?Dave: I don't know. I think it's pretty variable. It depends on the organization. I think that is one of the things that I emphasize when I'm working with my clients is how important that alignment is. I sort of talked about it a little bit earlier, when I said you shouldn't have one group reporting to the CTO and another group reporting to the COO. But also, it's really important for leadership to be communicating this stuff in the proper way. One of the things I loved most about my experience working at Salesforce was, Marc Benioff was the CEO and he would publish what they call V2MOMs, which is like—oh boy, vision, values, metrics, obstacles, and measures, or something. I don't remember what the last thing was. But he would publish his V2MOM, which was basically his objectives for the next time period, whether it was quarterly, or yearly, I don't really remember. But then what would happen was the people that worked for him would look at his V2MOM, and they would write theirs about what they wanted to get accomplished, but showing how what they were doing was in support of what he wanted. And then the people below them would do the same thing. And the people below them would do the same thing. And what you were able to create was this incredible amount of alignment at a 16,000 person company, which is crazy, up and down the ladder so that everybody understands what they're doing, and how it fits into the larger picture, and what they're doing in support of the goals of the business, and the objectives of the business, and that goes all the way down to the most junior engineer. And I think having that kind of alignment is, I mean, it's obviously incredibly powerful. I mean, Salesforce is a rocket ship and has been for a long, long time. And Google does this for their OKRs, and that there was that thing that was popularized by Intel as well; there's a whole bunch of these things. But that alignment is phenomenal if you want to have a lasting, high performing organization.Emily: When you see companies that don't have that alignment, or even just, it seems like the engineering team maybe doesn't entirely understand where the business is going, or even the business doesn't understand what the engineering team is doing, what happens and where is the communication going wrong?Dave: I mean, you see the frustration. You see the fracturing. You see the silos. You see a lot of finger-pointing. I've definitely worked with some clients where the ops team hates the dev team; the dev team hates the ops team. I remember the dev team saying, “Ops doesn't actually want to do any work. They just want to invent stuff for themselves to work on. And that's how they want to spend their day.” And the ops team is saying, “The developers don't even understand anything about what we're doing, and they just want to go o—” you know, there's all these crazy, awful made up stories. And if you've ever read the book Crucial Conversations—they also have a course, or whatever—one of the things they talk about is you need to establish mutual purpose in order to have a difficult conversation. And I think that's really important for what we're talking about in the business: we need to establish mutual purpose, just we talked about with DevOps, there's only one goal. And the other thing that they say in that class, or in that book, is that when we are going to have a conversation with somebody that we are not getting along with, we invent a story that explains why they behave the way that they do, and every time we see something that validates that story, then it's even more evidence that that story is actually correct. The problem is, is it's a story. Like it's not real. It may seem real to us; it may feel real to us. But it's a story. It's something that we made up. And so, that's the kind of outcomes that you get when you have this fracturing, where you don't have this alignment up and down. You have people telling these stories like, “Operations doesn't want to do any real work. They just want to make stuff up for themselves to work on.” Which is, if you're not in that environment, if you're someone like you and me looking from the outside, that's absurd. But I can certainly see how you can make up a story that gets continually validated by what you see because you're looking for evidence that supports your story. That's part of what makes you think that you're right, is that you're always searching for this evidence. And so obviously, those are not going to be high performing organizations. That's why it's so important to get that kind of alignment.Emily: Going back to this idea of sort of moving to cloud-native, what do you think are some of the surprises or misconceptions that come up when teams are moving to more cloud-native approaches?Dave: I feel like my clients generally are not terribly surprised. I think by the time that someone's reaching out to me, they are feeling a lot of pain, and they know that things have to change, and they are looking for what are the ways that things have to change? I don't ever have to go into a client and convince them that they need to do it better. The clients that are coming to me, recognizing that they're having a problem, and so it's really just getting them to stop focusing on what we call an SRE toil, which is popularized by Google, which is—I don't remember the exact definition, but it's basically manual work that's devoid of enduring value, that's repetitive, it's automatable, it's just repeat, repeat, repeat, repeat: we're not making improvements anymore. And so once we start to have this Kaizen mindset, this idea of continual improvement at all times, instead of just trying to keep the business running, that starts to enable all this kinds of stuff. And that's why we talked about building things in sort of a cloud-native manner. We're talking about that ability to go fast. We're talking about that ability to enable things, and part of that is this idea of continual improvement; this idea of always making things better. A lot of this comes out of Agile as well. I always talk to people about their sprint retrospectives, and I say, “It's your opportunity to make your team better. It's your opportunity to make your environment better. It's your opportunity to make your company better.” And I was like, “The worst thing that you could do in Agile is if in January of last year, and in January of this year, your team is just as good as it was.” That's terrible. Your team needs to be much better than it was. And so enabling developers to go quickly and all that other stuff. And putting all those things in place is a big part of that.Emily: Anything else that you want to add about this topic that I didn't think to ask?Dave: I mean, I think embracing these principles is really important. I think that if you look at the companies who are trying to go fast, and don't embrace these principles, these cloud-native ideas, or just even these cloud computing ideas, it basically becomes technical debt that keeps building up, and building up, and building up. And everybody knows accumulating tons of technical debt is not going to help your organization to move faster; it's not going to help you achieve all those great business outcomes that you want to get out of the State of DevOps report. And so I've seen situations where they have not been able to make that transition into this way of looking at the world, and the environment becomes really fragile; it becomes really brittle; it becomes really hard to make changes, and the only way is to make changes is to double down on the technical debt, and accumulate more of it, to the point where eventually they wind up spinning up an entire team whose sole purpose is to try to undo the mess that's been created. And you don't want that. You don't want to allocate a team to start unpacking your technical debt. You'd rather just not accumulate that technical debt as you're going along. And so I think it's really crucial for businesses that want to be successful in the long term that they start to embrace these ideas early. And obviously, if I'm a startup and I want to embrace a lot of these cloud-native things, that's a lot easier than if I'm a well-established company. I, in my consulting practice, I don't really work with startups because they don't tend to have these problems. They don't tend to accumulate a lot of technical debt because they are founded with this idea of going quickly and being able to empower developers and enable people to go quick. To your point earlier, the companies that I'm working with are the ones who are making this transition, where they've been running in the data center, or maybe they built an environment in the Cloud, but it's just not operating the way that they expected, and they're paying ridiculous amounts of money [laughs] to run stuff in AWS, where we thought, “Hey, what's going on? This isn't supposed to be this way.” But startups have the ability to do this much easier because they're unencumbered. And then as they grow, and they start to introduce more process because that stuff is inevitable that we're going to need to do that, that's when these things become even more important that we make sure that we're keeping them in mind and we're doubling down on them, and we're not introducing lean waste into the system and stuff like that, that will ultimately catch up with us.Emily: It's so true. All right, just a couple more questions. What is your favorite engineering tool?Dave: Ah. I mean, I'm supposed to give some kind of DevOps-y, it's not about the tools answer, but this week I think it was, on Twitter, I saw somebody else put up a SmokePing graph. And most people are not going to have heard of SmokePing. I worked at multiple ISPs in my career already, so the networking stuff is important to me. But wow, I love a SmokePing graph. And it's basically just a bunch of pings that are sent to some target, and then they're graphed when they come back, but instead of saying, “I sent one ping, and I came back with 20 milliseconds,” it sends 20, and then it graphs them all at that time point, so you can actually see density. It's basically before everybody came up with the idea of heat maps, this was one of the original heat map tools, and I still run SmokePing in my house just to see the performance of my home network going out to different parts of the internet, and that's definitely my favorite tool.Emily: Where can listeners connect with you? Website?Dave: Yeah, yeah, that's a great question. So, if people are interested in my business, I'm at mangoteque.com, M-A-N-G-O-T-E-Q-U-E. That was a fun name invented by Corey Quinn of The Duckbill Group and I loved it, and so I wound up using it. And they could also find me on LinkedIn obviously, or Twitter at @DaveMangot. M-A-N-G-O-T, and I post a lot on there about things that I've observed. I post a lot on there about DevOps. I post a lot on there about taking a scientific approach to a lot of the things we're doing, not just in terms of the scientific method, but like in terms of cognitive neuroscience, and things like that. And I also write a monthly column for CIO.com.Emily: Well, Dave, thank you so much for joining me.Dave: Thank you for having me, Emily, this was really fun.Announcer: Thank you for listening to The Business of Cloud Native podcast. Keep up with the latest on the podcast at thebusinessofcloudnative.com and subscribe on iTunes, Spotify, Google Podcasts, or wherever fine podcasts are distributed. We'll see you next time.This has been HumblePod production. Stay humble.

Dave Nobs is the Managing Director and Chief Growth Officer at Lavidge, a highly awarded, employee-owned, full-service advertising agency with ever broadening horizons. Lavidge started in traditional advertising in 1982, then added public relations in the 90s, digital marketing in the 2000s, and multicultural marketing about 5 years ago. A couple years later, the agency broke down the walls between what had been its divisional siloes. Subject matter experts now look at the totality of a client's issues holistically. Dave notes that the agency's work focuses on projects that meet client-specific and industry-specific benchmarks, most commonly tracked through brand awareness and sales. He explains that his agency strives to make a difference for clients, employees, and the community. Lavidge added multicultural marketing to address cross-cultural messaging needs in a state with a strong Hispanic presence . . . but multicultural marketing is not just about language differences. Dave says marketers serving a specific cultural market need to be aware of the different, and almost intangible. “tones,” strategies, and tactics needed for a client to gain credibility within that community. “Truth, inspiration, and action” drive the agency's projects:  Truth “happens” when the agency and a client collaborate to research issues, develop strategy, evaluate data and analytics, and go through the give-and-take-process of participating in focus groups, interviews, consumer intercepts, and experiential observation – and synthesize all that market and client information to understand what the client is “about,” and what the client “needs.” In the inspiration phase, the agency and the client work “hand-in-hand” on the marketing story, the design and art direction, and the feel of the narrative.  The action part includes media and channel placement and assessing responses and brand impression dynamics – getting the message to the masses and hearing their reply.  As Chief Growth Officer, Dave generates new business, grows existing client business, attends to agency marketing issues, and develops strategic client innovations. In this interview, he lists assets that he attributes to Lavidge's success:  An attitude of positivity  Daily communication with clients large and small The agency's focus on the client . . . and on using “every experience, tool, trend, skill and insight at our disposal to create immediate and lasting connections between brands and human beings.” Over the years, Lavidge has evolved to concentrate on a number of core verticals: healthcare, education, retail services, homebuilders, and sports. Dave discussed re-reading a Harvard Business Review article on how to market in a recession. The article's author asserted that tough economic times were “not the time to cut advertising.” Historically, brands increasing advertising during a downturn, while their competitors cut back, “can significantly improve market share and return on investment.” Dave reminds us that “It's also important to be aware of tonality . . . to be authentic . . . to be helpful” and highlighted several companies that are taking action to do just that. Dave is available on his company's website at: https://www.lavidge.com/. Transcript Follows: ROB: Welcome to the Marketing Agency Leadership Podcast. I'm your host, Rob Kischuk, and I'm joined today by Dave Nobs, the Managing Director at Lavidge based in Phoenix, Arizona. Welcome to the podcast, Dave. DAVE: Thank you, Rob. It's a pleasure to be here. ROB: Fantastic to have you here, Dave. Why don't you explain to us where Lavidge really excels and what you're known for? DAVE: Sure. We are a full-service advertising, digital, public relations, and multicultural agency here in Phoenix. We've been in business since '82. We were founded in the '80s as an advertising agency, added PR in the '90s, digital in the 2000s, and then multicultural marketing about 5 years ago. We are one of the largest agencies in Arizona, and certainly one of a handful of full-service agencies, meaning all of our services are in-house under one roof. ROB: Perfect. You've been around for the addition of that multicultural line of business; what were some of the things you saw in the market that pulled you in that direction and caused you to commit to that line of business? DAVE: We're always looking at innovative client solutions, and multicultural marketing, particularly Hispanic marketing here in the Southwest, is particularly important to our clients. We started with McDonald's, which was a big client of ours, and then we added multicultural marketing to a number of our other clients, particularly in healthcare, like Banner Health, Blue Cross Blue Shield, and others just because it was a need that they have. Multicultural marketing is very different than general market in tone and some strategies and tactics specifically geared to accomplish results in that area. ROB: How in particular? What are some of the ways you would say in detail that things need to be different when you're speaking to that sort of audience? DAVE: I think different strategies and tactics resonate with the Hispanic market better than others. Obviously, digital is very important. Events, immersive/experiential marketing sometimes is more important than others. But really, for us, it's more a client solution than it is anything else, particularly for our clients that has that audience, and that's important for them. ROB: I would imagine a part of that is really almost subjective in the eyes of the person being marketed to. It's this overall sense I think we all have when someone knows and understands us versus where someone's intruding into our world but doesn't really belong at the party. Is there an intangible dimension to it, do you think? DAVE: I think that's accurate. ROB: Perfect. Tell us a little bit about how the agency started, if you can get into some of that, and then how you came into the picture as well. DAVE: Sure. As I mentioned, we were founded in '82. We have a staff of just over 70 people. We have $70 million in capitalized billings, and we're employee-owned. I believe we're the only agency in Arizona that's employee-owned. We're proud of the fact that we've been voted Best Place to Work eight times and the Top Agency in Arizona six times, Best Place to Work for Women, and just recently – this month, as a matter of fact – we were named AZ Big Media's No. 1 Advertising Agency for the ninth year in a row. We're very proud of that. For us, it's really about solving client problems with strategic thinking and sharp creative views that go well beyond producing ads. Our agency mantra is “be creative, work smart, and have fun.” We live and breathe that every day. ROB: With an agency that's been there for a while, and you said it's also employee-owned, how do you think about leadership transitions within that environment? Because 33 years, you didn't start the thing but you're running a lot of the show there now, and someone will supersede you. How does that work in that sort of environment? DAVE: Good question. My role is that of a Chief Growth Officer, so my focus is generating new business, growing existing client business, agency marketing, strategic client innovations. I've been here 10 years, and I'm part of a management team of eight people. If you can believe it, I'm the newbie. The rest of the management team members have been with Lavidge for more than 10 years. The industry has changed so much. It certainly has become more project focused. What we need to do, and what we're focused on, is really – our purpose is to make a difference for our clients, our employees, and in the community. Our beliefs are really around truth, inspiration, action. What I mean by that is for our clients – and we're very collaborative; we like to involve the client at every step of the process, from the outset of the campaign to the strategies and tactics to the implementation and to measuring the results. So when I mention our purpose, making a difference, we're looking for truth. You hear a lot in our industry about finding insights, but the truth for us is really strategy, research, the conversation with our clients, including the hard conversations, looking at the data, analytics, focus groups, interviews, consumer intercepts, the experience. All that we put into place to gather these insights. The next step for us is really the inspiration, which is the motivation, the motion, the design, the art direction, the experience, the usability, the feel – to tell those stories, because for us, like most agencies, it's all about storytelling. Then it's the action, getting the results that our clients need. That's looking at media, looking at the channels, looking at loyalty, all of the brand impressions, clicks, visits, awareness, decision, movement, all generating the results our clients are looking for. ROB: It sounds like quite a range of things to think about. I appreciate what you're saying about the insights and having some of those hard conversations around the insights. In some ways, coming into digital, even coming into PR before that, in some ways the numbers that you can present to a client have changed, but the bottom line of business in terms of doing well for your clients, doing well for the business, doing well for your employees – those haven't changed. What are some of the key numbers you see that are really relevant to clients today, that help them understand and help them come to grips with maybe a hard conversation? DAVE: That's a good question. Most of our clients – and this is historically true for the industry as well – are looking at two things at the end of the day, usually: brand awareness and sales. The trick is to develop programs that are specifically geared toward our clients' benchmarks. They're different by industry and they're different for each client. I think it's particularly important these days to develop tailor-made solutions because each client is different, each challenge is different. Oftentimes, there are different projects for some of our bigger clients, and they all have different metrics. ROB: Yeah, especially when the clients are significantly larger. It can make a difference. When it comes to Lavidge, is there any particular sweet spot for you in terms of industries and client size that you maybe see a cluster of clients around that helps develop some particular excellence in that area? DAVE: Some of our core vertical experience – healthcare, certainly we have a number of healthcare clients such as Blue Cross Blue Shield, Delta Dental, SimonMed, Sonora Quest, Banner. So healthcare is certainly a specialty of ours. Another one is education. Arizona State University is one of our larger clients. It's interesting – I say Arizona State University; it's really 12 or 14 different clients because we work with their enterprise marketing hub and all the different schools and divisions, such as Barrett Honors College, Thunderbird, Cronkite, the Alumni Council, the athletics department. It's a number of different clients under that one banner. So healthcare, education. Retail services is another core area of expertise for us. We do a lot of franchise marketing in the retail space. We worked with Massage Envy for years and years and years in virtually every year of marketing and communications. Re-Bath is another significant retail service client of ours. If I had to mention three, those would be it. Healthcare, education, retail services. We also do a lot with homebuilders. We've done a lot in the sports area as well. We're a full-service general market agency, but those are some of our core areas of expertise. ROB: Very interesting. It makes sense. Some of those are very familiar, although even with the educational focus, in some ways it maybe looks more like enterprise than ever before, because what you're describing to me sounds almost – you mentioned their marketing hub – it sounds like a center of excellence that any enterprise brand might have. Do you think they have had some inspiration from that world, or some learnings from the center of excellence approach? Or maybe even the enterprises learned from them. DAVE: Yeah, I believe so. For ASU, it's really all about innovation. They're proud to be named the most innovative university. Obviously Michael Crow, their president, deserves a great deal of the credit for that. But ASU, for us, that's a great example of our collaborative approach. We really do work hand-in-hand with them. It can get messy at times, and we like that because we think involving them, again, early in the process and working with them – daily communications, weekly status calls, monthly reporting – that helps generate best results as possible on their behalf. ROB: It's really interesting because you jammed through that cadence of the daily, weekly, monthly. A lot of times when we talk to even very successful agencies, especially because I think maybe people come from a creative place, they don't mention that sort of process. How do you, with I think you said around 70 some employees, think about establishing that as a standard? How do you communicate those standards of cadence and make sure they're listened to and followed throughout the organization? Because they come from a place of wisdom. DAVE: Right, and that's really our commitment to our clients because things change so often. Daily communication is vital – not only for our big accounts, but also for some of our smaller accounts. We have, like a lot of agencies, larger agency of record relationships, and then we also have standalone public relations clients or website clients or creative services clients. It's important, no matter how big or small they are, to communicate daily. Again, that's part of our commitment. Then the weekly calls keep everybody on track – not only us, but also our clients. Particularly helpful for the larger clients. One of the things that we like to do is have one point of contact for our clients so they're not making four different calls. They're calling one person who can marshal the internal resources that are needed. One of the things we did that I think is interesting, a couple years ago – we used to have a standalone advertising division, a standalone interactive division, a public relations division, a multicultural division. We broke down those walls and those silos a couple years ago and implemented a more unified approach. It's not about whether they're an advertising client or a PR client; it's much more about what that client needs. Does it need strategy? Does it need creative? Is it a user experience website/responsive design approach that's needed? Is it content? Is it social? Is it search? It could be a number of things, and it's really about answering clients' needs and offering one-stop client solutions on their behalf. ROB: When you made that transition, did they have an account manager in each of those divisions before and you were able to streamline that to one trusted point of contact? How did that realign when you made that switch? DAVE: It was actually fairly seamless. We had, obviously, experts in each one of those areas, and we had a head of advertising and a chief creative officer and the head of our interactive division. Breaking down those silos – we still have subject matter experts, but it's about bringing them to bear on our clients' behalf rather than looking at it division by division, if that makes sense. ROB: For sure. DAVE: The reason for that is we found that it's like – what's the old saying? Trying to force a square peg into a round hole. We were slotting different clients into different divisions, and that's not always the case. They could be primarily a public relations client, but they're going to need a website or they're going to need a special event or they're going to need print or digital magazine execution, video. It's really about being more client-service-focused than anything else. ROB: Dave, what are some things you've learned as a marketing agency leader that you might do differently if you were starting again 10 years ago, or even further back in your career? DAVE: That's a very good question, Rob. I think the one thing that I would've done differently is I would have taken one of the client side opportunities that came my way over the years, because I've been in the agency business – all my career has been spent on the agency side of the business. Talk about a glutton for punishment. [laughs] But I probably would have taken one of the client side opportunities that came my way. I think I would've liked to have that experience, sitting in the client's chair and having the final say and making decisions on which campaigns run and why. In fact, one of those opportunities was in your neighborhood, with Turner Broadcasting System, interestingly enough. ROB: Oh, interesting. It's very common, I think, for people to bounce from brand side to agency side, sometimes drifting over to the vendor side. I think there is value in that empathy. I'm sure you have had plenty of people on your team that have had that experience, right? DAVE: Yeah. I think it's useful. I also teach a sports marketing class at ASU at the Cronkite School, and that question comes up a lot with students, because of course, they're thinking primarily, in sports marketing, “I want to work for a league or a team,” and they don't really understand all the other avenues of career development, whether it be in an agency like ours or a corporate sponsor or some of the other suppliers that are involved in sports marketing. But I do always recommend having both experiences, and again, I would have probably done that differently, to answer your question. ROB: You can also see quite often how many agencies, some of their longest running clients come from the relationship you're talking about. You have a relationship with the university, and the university is also a client. It's not a quid pro quo, but it's a relationship business. Someone who spends 5 years inside Coca-Cola, 5 years inside Home Depot, 5 years inside Blue Cross is going to have some very longstanding relationships to pull on. Not to say that you don't have those from being a trusted agency partner for people; it's just in some cases, it's different because you may have a former agency you can't pull that client from the same way you can if you left the brand and you're on the agency side. DAVE: That's a good point. I remember when I was general manager of Rogers & Cowan in Los Angeles, which is the big entertainment publicity firm, we had a number of different divisions, like television, film, music, product placement, consumer, etc. It was interesting; I always talked to the CEO about how there were really, really expert people, but they were what we call an inch wide and a mile deep, meaning they knew everything in the world about music, but it was hard to transfer those skills to say consumer marketing or corporate communications. I think this is true of clients as well. They get so deep into their area of expertise. I think it's the role of the agency to really bring best practices and other solutions, perhaps from other industries, to the table to get them to thinking beyond just what works in a specific market. ROB: One thing I imagine that's probably relatively new for Lavidge, and you're learning a little bit, but maybe you also have some lessons to learn, is this thing that many of us are doing perhaps not by choice right now, which is working in distributed teams, working remotely. You can't even get in a room if you want to, or at least you probably shouldn't amidst this coronavirus/COVID-19 crisis. What are some things you're learning, especially since you mentioned these cadences that you had? Are you learning some different habits that are helpful for teams that are at a distance now? DAVE: That's a great question, particularly given the challenging times that are upon us. I think one overriding principle is to be determined in what you do and not be fearful. Despite the current circumstance, there are opportunities. I'm very proud of our agency, as an example, because we quickly, a couple weeks ago, switched over to working remotely. It's been seamless. We just had an all staff meeting on Wednesday that we did remotely, and it worked remarkably well. We're doing that for our client teams. So there are some opportunities. I think in general, one of the things that I'm seeing is that brands can use this opportunity to step up and take action. There seems to be a common thread around brand purpose. You hear a lot of words like “authentic,” “useful,” “helpful,” “purposeful,” but I think it's really about leveraging brand power for good. ROB: It's a good reminder. You mentioned “helpful,” and I think if we all take a step back as marketers and as people who are communicating into the lives of other people, we probably realize – we should always be helpful, but I think it can get a little bit hard to remember that sometimes. When people are just out there spending money, everything's fine, people are looking to buy stuff, I think we can lose some of that helpfulness and get a little bit flashier. I think we maybe realize right now, this is not the time to ask for stuff from people, but it's time to be helpful to them. DAVE: Yeah, no question. Just the other day I was rereading the Harvard Business Review, an article about how to market in a recession, and maintaining marketing spending is important. It's not the time to cut advertising. It's well documented that brands that increase advertising during a recession or a situation like this when their competitors are cutting back can significantly improve market share and return on investment. But your point is well taken. It's also important to remember tonality. It's important to be authentic. It's important to be helpful. You think about some of the recent examples, like Ford and Tesla are using their factories to make ventilators, or Anheuser-Busch are using their distilleries to make hand sanitizer. Just a couple of examples of being authentic, being useful, being helpful. ROB: For sure. In some cases, with Budweiser, with Anheuser-Busch, I'd imagine that's even coming to them a little bit at the expense of their actual business. Ford may not be needing to make as many trucks, but if my social feeds are anything to be believed, Anheuser-Busch and their competitors are doing pretty well right now. A lot of people seem to be buying their product and talking about it. [laughs] DAVE: That's right. That's very true. But again, I think it's really about their brand purpose. I imagine they are doing very well, but it's also about being helpful and being purposeful in what they're doing to consumers at large. ROB: Perfect. Dave, when you're looking ahead – you mentioned in this time, you see opportunity. This is a time to seize opportunity. This is certainly not a time to be shy right now. We all feel probably some moments when we want to just chill out and check our brains out, but when we're done with that, what are some things that are coming up for Lavidge that you're excited about? DAVE: I think we're very excited about a number of areas. In this particular situation, the coronavirus/COVID-19, crisis communication is obviously important. We're staying very busy in that area, public relations experts. Two other areas that we're looking at are certainly ecommerce, given the remote learning and the remote situations that both we and our clients are facing, and then cause marketing – again, really talking about what you and I were just discussing: brand purpose, connecting a brand purpose with their business goals and making sure they stand for something that their consumers care about. So those are three areas that we're looking at. Before this came upon us, we were also looking at a number of other areas. One was the rise of experiential marketing as a strategy to engage consumers, using branded experiences, live marketing, event marketing. The whole idea is creating a memorable impact on the consumer. Obviously, two other areas that our digital team has really focused on is increased artificial intelligence, in-depth information about what consumers want and how that can be personalized and how that can personalize the buying experience based on someone's preferences. And then one of the areas that I'm really interested in personally is the whole brand solving business challenges by engaging young consumers through their passion for e-sports, gaming, as an example. Those are the areas we're looking at. ROB: It's really fascinating because a lot of times a 30-some-year-old agency would be very steeped in things they've done, but it sounds like, especially with that leadership team that you have around you, this company has been through multiple downturns and has grown and is still one of the largest in Arizona. I can hear in your description of the things you were thinking about, the things you're thinking about now, it's intentional but it's not opportunistic. It is tied to things you've been dong, but it's not overly tied to the plan that you had, and you're still trying to push really hard to find some way to do branded experiences. There may be something that emerges from that, but you're not going to do a big brand activation in a physical place right now. DAVE: Correct. I do think, to your point, it's important to be flexible. I think that's one of the reasons we've been extremely successful for almost 40 years. We do have a number of client innovations that we've developed for our clients, whether it's introducing new services such as account-based marketing or programmatic digital media, but it's also about improving traditional marketing methods. Innovation is not just about coming up with new solutions, but it's also about improving marketing and advertising, digital, public relations, social, website design and development, etc. So I think innovation comes in two areas: both coming up with new solutions as well as improving solutions that you've employed for clients in the past. ROB: Excellent. Dave, when people want to find you and they want to find Lavidge, where should they look? DAVE: We are in the Biltmore area of Phoenix, which is right on Camelback very close to the Biltmore Hotel, if you know where that's at. Certainly centrally located. Again, we're a full service agency, and I think that's important. Not that we don't have standalone clients, but usually we like to think of ourselves as a one-stop client solution. Those services include strategy. We do a lot of branding work, a lot of corporate communications work. That includes market research and customer segmentation. And then we have our creative services, so that's TV, radio, print, digital advertising. We have our own in-house video production capability, so it's not just TV ads. We're doing a number of videos, whether it's corporate videos, product videos, training videos, only videos. Then our digital expertise is really in two areas. One side of it is the website design/development, microsites, landing pages, mobile apps. The other side of that is all forms of digital marketing – search, both paid and organic, email marketing, lead gen, lead nurturing, ecommerce that I mentioned before. We even do custom loyalty programs for some of our clients. That's helped by the fact that we have our own in-house analytics department as well. Then in the public relations area, it's both traditional corporate communications and product publicity, but also content. As a number of agencies do, we're doing more and more content creation/content management, whether that be videos, blogs, infographics, whitepapers, etc., and mapping that out to make sure it syncs with traditional public relations. It's nice to have all those client solutions, if you will, under one roof and available to our clients. Now, some of our clients are using all those services; some are using the services that are most needed for them. ROB: Got it. That's excellent, Dave. It looks like they should also probably, if they're looking for you online, go to lavidge.com. Is that right? DAVE: That's correct. Lavidge.com. You'll see on our website a lot of the information that I just talked through. You had asked about some of our core areas of expertise, and in three of those areas – there's more, but certainly using healthcare as an example, we did our own marketing report. We literally conducted research to determine which messages are most resonating with consumers, which marketing tactics are more successful than others. So we did a whole research study, which is available on our website. Additionally, that's reinforced by a number of whitepapers that were written by our subject matter experts, whether it be digital, creative, strategy, to really walk through and bring to life some of those findings. All of that is available on the website, Lavidge.com. ROB: Perfect. Thank you so much, Dave. It's been great to have you on the podcast, and I'm grateful for all you shared about the journey of Lavidge and how sustained that business has been in a really admirable way. DAVE: It's my pleasure, Rob. Thank you very much for the time. I enjoyed it. ROB: Take care. Thank you. DAVE: Thank you. ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

Today, we talk with Jason Yelowitz and his client, David Wolf. David could best be described as a “serial entrepreneur”. We discuss the sale of David's business and Jason's role therein. Tune in to hear our discussion about David's successful sale, knowing when it's the right time to sell, and business in the time of the CoronaVirus.   Episode Highlights The efficiency of the marketplace. Why cash is king. Incentives for having payroll employees. Why Dave decided to sell. Knowing when it's right to sell. Is selling at a loss the wrong move? If the pandemic has slowed down or changed deals. Is this a good market for first time buyers? How to keep your business stocked and afloat during the pandemic. Transcription Mark: All right this week we don't have Joe with us. We have Jason Yellowitz with us because Jason had one of his previous clients, Dave Wolf, on the podcast to talk about the sale of his business and some of the lessons and looking back on how that sale went. I always find these conversations interesting because after you sell a business, you have the chance to finally be somewhat introspective into what that process was like and maybe what you would do differently. Jason, I know you have Dave Wolf on who you work with for quite a while. You guys had I think two different LOIs that you had to work through in order to get to a closing. How did that conversation go? Jason: Yeah, it was really interesting to catch up with Dave. We got his business sold. I want to say it was around August of 2019, so it's been a while. He feels happy that it was sold. It was a very; at least to me it looked like a very good business. It had a general manager in place that was running the day to day. In his case, it really wasn't taking up his time but there's always that bit of mental focus that you can't let go of. And Dave has his fingers in so many different businesses that I think for him he needed to let up on the mental focus and then I think also he reallocated some of the capital. He really ends up buying a fair number of distressed kind of assets and for that kind of thing, you need cash in your pocket typically. Mark: Yeah, I know. Absolutely. I know you guys went through two different offers on this and I'm sure you'll get into that a little bit on the podcast. Did you guys discuss what happened with that first one that didn't go through? Jason: I don't know if you got that into it on the podcast, but it is an interesting sort of lesson for potential sellers. When we had first listed the business, we got multiple offers. And like most people, the seller gravitated towards the one that had the highest headline price. The challenge that sellers should remember is the market is pretty efficient. A lot of times if someone is bidding more than others, the reason they're doing it is because they're already aware that they are less likely to get the financing necessary to close the deal, and therefore they're willing to bid it up a little bit. Whereas someone that comes in in the middle of the pack might have a much higher chance of closing, but they know it and they're not going to pay up as much. So what it comes down to I think is don't get wooed simply by the headline number. You have to think of it holistically if you're a seller of what's most important to me; hitting a certain dollar amount or walking away versus a higher likelihood of closing. And there's not a right or wrong answer but the lesson is, don't deceive yourself into thinking you can have it all. There's usually some sort of tradeoff. Mark: Absolutely. Now the market is strikingly honest. It's always very, very honest, very direct, and you can't really fool it so I think that's a good lesson. Well, let's get into the episode and I can't wait to listen to this one. Jason: Hey everybody, this is Jason Yellowitz from Quiet Light Brokerage and for today's Quiet Light podcast, our special guest is David Wolfe. David is a serial entrepreneur. He's got his hands in all sorts of businesses. And it was probably about six months ago that I represented him in the sale of an online e-commerce business he had. Dave, welcome, how are you doing? Dave: Hey Jason, how are you doing? I'm pretty good. Jason: Good. So are you sitting there in some tropical location, I can see palm trees blowing in the background. Dave: I wish. I wish I was. Unfortunately, it's just a cool background trick for Zoom video because I'm sitting at my house quarantined like everybody else. Jason: Yeah, well, you mentioned quarantine. Obviously, we are in the heart of the COVID-19 coronavirus situation so if you don't mind, maybe you can just tell viewers just quickly what are the businesses that you're running and what impacts positive, negative, neutral have you seen from the coronavirus? Dave: Well there's definitely a lopsided negative for this; for what we're dealing with right now. I'm in several different industries. So we are in some direct to consumer automotive space online. I have recently, after the purchase that you represented for, I got into some brick and mortar stuff doing fencing installation and some manufacturing of fencing products; vinyl privacy fence. And then we're also in real estate lending and a few other places. And it's pretty drastic across all industries. From what I can tell the online businesses are faring just immensely better than just about anything else. So some of the brick and mortars, we're dealing with a; when I get off this call, I've got to deal with one of my managers needs to self-quarantine. So he's showing symptoms. He's not in a terrible situation. But now we're looking at we're already planning on going down to a minimal staff while this was blowing over. And so now we've got to see okay well, now it's zero because we can't have him at the shop at all. So these are just normal things. On the plus side, I think as most people I've talked to; as I'm sure you have a lot of different business owners in a lot of different industries just because of what I do. And because of the people that weren't in a good position, there is, unfortunately, going to be some business fatalities from this. I talked to a bankruptcy attorney the other day that was representing me in purchasing some assets and he was just the ground is already starting to rumble with the volume of business that's going to be occurring from that. And so I think there's going to be a lot of opportunities for people that; everything is going to work itself out but the reality is if you know how to run a business if you have sound principles in operating businesses, there is going to be a lot of opportunities. It's going to totally switch from a seller's market to a buyer's market. It was basically overnight I feel like. I think you would agree when you were working with me we had talked about it. For the most part, it's kind of a seller's market. There's a lot of capital out there. It's easy to get. And now we had; the institutional lenders aren't even lending on in our hard money lending business, which would be considered about us. We've dabbled and had conversations about that space. It's a very secure asset. Even they're holding off on buying more assets. So what that tells me is cash is king, right? So if you have money to buy a business and I would say you have the bandwidth and you can afford to wait, you don't need the cash flow right away, I think there's going to be some unbelievable opportunities in the next few months. Jason: Okay, that's a pretty interesting perspective. From our end what we've seen is the economic; obviously, there's the human and health toll. And I feel sorry; I've got a lot of empathy for your manager who is showing symptoms. On our end what we're seeing is the economic impact is really hitting different businesses differently. Some of them are way down. Others are way up. We've got a number of online businesses where their sales literally doubled versus the previous year in the past 12 months. What's not clear is whether it's a temporary blip or if there is long term enduring changes in customer behavior. For instance, I've got a client who sells a security device on the internet. His sales have doubled and his theory is more people are staying home and they want to feel safe at home. And without a crystal ball, that sounds as plausible to me as anything. So let me ask you this question. You mentioned that you believe there's going to be some golden opportunities for buyers, especially cash buyers. I think as of about an hour ago, I read a lot of headlines that Congress and the president were very close to passing a historic stimulus bill. And my understanding is that's inaudible[00:09:56.6] to fund a lot of money to the Small Business Administration. Do you think that that money will get to people that want to buy businesses or is it mostly going to be used to shore up existing businesses or do you have no opinion? Dave: Well, one of the things I think is going to happen. I think that you're going to see and I guess you can't quote me on this, but you're recording this so I guess you're going to. So normally and you think; I don't know if you've had this conversation, but typically the kind of par for the course for purchases of at least smaller businesses is an asset purchase agreement where you wipe out and start again. Well, there might be some people willing to take on some of the risks of a previous business if it means that by having the established business in place all of a sudden it makes it tremendously easier to be able to get capital from some of the pipelines that's going to be coming through. I mean, I think they're probably just going to be throwing; it's either they're going to be difficult to get because it gets bogged down in bureaucracy and that's going to be a disaster for the country or it's going to be they're just writing checks and throwing money at people that have a business and primarily a business with payroll employees. I guess that's one of the things that we've kind of; a lot of company shy away from that and try to stay lean and online. But there's going to be a lot more incentives for having a payroll more than likely. Jason: Yeah, that's what it sounds like. It sounds like most of the incidents are tied to maintaining a payroll. So maybe we can; let's go back in time six months, you had sold a business, what month did we close; was it October? Dave: August is when we closed; very end of August I think. Jason: What was going through your mind at the time? Why did you choose to sell and are you happy that you made the decision that you did? Dave: Yeah, well, so I definitely am very happy that I made the decision I did. I wish I would have just had all the money sitting at a bank account. But like an entrepreneur, we put a lot of it back to work afterwards. But, yeah I'm very happy that we sold. We would just kind of look at it as I wasn't focused 100% on that business and I knew that there was some opportunity in it but I needed somebody that looked at it the way that I did when I bought it five years before that could take it to how do I 3x this business and it was. It was a solid business. And I knew it was because you have had several side conversations with me where I was like do I really want to let this go? And in talking with them that business is one that's kind of about where it was, they haven't really been too badly negatively affected by the issues that we're dealing with right now even after a slowdown, which is good for them. But it allowed me to free up my time and focus on new things and kind of you had said like I was able to find plenty of things to focus on to grow. And I was reinvigorated by having that newness to it again where I was kind of tired. It wasn't that there's anything necessarily fundamentally wrong with that business it's just that I was seeing opportunities or make investments to grow it and it just didn't excite me. I wasn't doing it. I wasn't pushing like I was. And so a new owner came in and he has that same; it's new to him so he's making changes and making moves and improving the business and I think they're doing a good job. And I'm taking that renewed energy and I'm putting it toward something totally new and so I think that's a real win. So I'm definitely happy. I have no remorse for selling the business whatsoever. Jason: That's a really interesting point that you bring up, because at this point I've been brokering for 10 years and what I've acknowledged is a lot of times when I meet a seller, their first instinct is how do I get the absolute most money out of the business? And the obvious answer is grow it to its utmost potential and then that'll translate into cash flows and you'll get a multiple on those increased cash flows. The reality I find is usually when people want to sell it's not specifically for the cashout. The cash out most people consider that's the fair market value of what their business is worth today. So the decision comes down a lot more to personal things. Most of my sellers, there's a personal reason; marriage, divorce, buying a house, I have to move, I have to support my in-laws, anything like that. And then on the business front, it usually boils down to some version of what you just said, which is I know how to grow this business I just find that I knew how to grow it six months ago and I didn't. Clearly, I'm lacking the motivation and the sort of excitement that comes from new business ownership so maybe I'll hand it off to someone else who's got that level of motivation and excitement. So the way I think of it is each party takes the business to whatever is the highest level while counterbalancing all the other things going on in their life and how much attention they can put to one versus the other. What would you recommend to someone who wants to sell their business now? We are probably at a peak uncertainty. We don't know if the coronavirus is going to infect millions or hundreds of thousands in the US. We don't know if it's going to make another round around the globe. I mean, the truth is, we just don't know. What we do know with some confidence is the central bank and the US government is putting a lot of firepower into trying to keep the economy going. But we don't know what the facts are so what advice would you have for someone who they had their plan, they were going to sell this year in 2020; maybe in June, maybe in October, and then boom, coronavirus. Dave: Well, I mean first it has to be a scenario where you have a willing and able buyer. So if you don't have a buyer already then it's a totally different story. And it really depends on what your consequences are of not selling I would say. I mean I have a lot of assets that I have for sale in the market right now that aren't business-related. And this could totally be; I mean I don't know when you're going to publish this podcast; a week from now this might be irrelevant. But in this very particular instance while we are quarantined in the house and just I'll give you the; I'll let down my guard here so that you guys, you know, it's a this is just for inaudible[00:16:36.4] the house. Jason: They're not quite as nice as the beach. Dave: Yeah, right. I'll go back to the beach. I think that it's obviously not the best time to be in a transition flow for the assets. Now, that doesn't mean that it's a bad time to sell. It depends on what does not selling mean. I mean in some cases, even selling; I mean I'm going to go to the extreme, even if you had to sell at a 50% discount to what your business would be worth a month from now, if not selling is going to cause you even more financial damage because of the foreclosure on a large property or something like that, it may still be worthwhile. It's kind of the lesser of two evils to sell your business. Jason: You know what's interesting to me about your statement was you said a week from now this might all be irrelevant. It was about a week ago we had an all-hands meeting at Quiet Light to say what are we seeing in the market and I was taking the same point of view that you're taking today, which is the values are going to come down. It's going to be all distressed sales. Strangely, in the last week and a half, we have gotten reports of a number; I think we've closed four deals in the last week. None of them were significantly different to my understanding from what the letters of intent said. And as I mentioned in the beginning, we've seen some businesses that have really; their financials have really gone down. And for those sellers, I would say if that's where it is you need to decide for yourself are sales coming back or are they permanently down? If they're permanently down you need to get very real very quick with what the market will bear. If you think they're going to be back, your best bet is to wait until that happens. But then the other side of the coin which Dave this is really surprising, some of the businesses are going off the hook up and those are the ones where I think the sales are closing and the buyers at least it seems; I've gotten this mostly second hand, it seems to me the buyers are feeling that their golden opportunity is that with behavioral changes worldwide more is shifting possibly to online, possibly to certain sectors and they want to get in on that now so that they want to close. So it feels like the market is changing but not necessarily in the static way that many of us would have predicted. Dave: Yeah, I mean a good example is I think that this is going to accelerate the move from traditional brick and mortar businesses to online. People that have never done insta-corridor like Amazon Prime delivery and stuff like that are now ordering their groceries and they're using Zoom video to chat. I mean this accelerated technology, the adaptation or adoption two, three years easy. I mean the stuff that we're seeing, people that have never used that technology are figuring out how to do those kinds of things. They're ordering food, they're doing; so day to day habits that typically don't change that fast have completely changed. I just bought a set of gymnastic rings to work out at home because I usually go to the gym. I like to go to the gym but I can't go to the gym so I was like, all right, well, I'm going to buy something and my routine just totally changed. I might continue with that. I actually really liked that so I'm looking at doing some other upgrades that go along with that. Maybe like putting some bars up in my back yard and doing a couple of other things. So that's happening across the board and I think I'm starting to see some adaptation from businesses as well changing and pivoting. But I think that's pretty simple as if it's just I guess as a buyer or a seller you really have to categorize yourself in are you a person that buys off of past success or are you comfortable being a little more speculative and focusing on future potential speculation like you said in a sense that I had a letter of intent on a project and I saw the sales skyrocket and because of this I'm more than happy to close. It's obvious that the effect of this has already impacted that business in how it's more than likely going to in the short term so you're not really too concerned about that. And then again the same thing I would be very worried if I was in LOI and the business fell off a cliff in the short term or had to shut down entirely and you have to start with a terrible cash flow. And then how is that going to affect the annual cash flows on the back end of that? I think there's ways around that. I personally; I mean like you said, most of these LOIs fast purchase is 30 to 45 days. I don't necessarily think it's a bad time to be shopping for businesses if you don't have to spend all your time focusing on making sure that yours isn't on fire because if you go into LOI you have plenty of time to do the due diligence on before you have to close to make sure that you do, in fact, want to go through with it. Jason: Do you think this is a market for first-time buyers? Let me give you an example. Let's say we've got somebody in their mid-30s who has worked in corporate America for the last 12 years, risen up the ranks to middle management, is not excited about their day job but as of today, they still have it and they want the excitement of being an entrepreneur but they've never thought or run their own business. They've been part of a much bigger organization. Is this the time for them or do you think it's only the time for more experienced buyers with the larger risk appetite, a larger balance sheet, and a better ability to forecast or better confidence in their ability to forecast? Dave: I actually think it's a great time for a first-time buyer to come into the marketplace. I mean in contrary with the right outlook you have to be able to have a long term outlook and you have to have enough cash to be able to weather an uncertain future for at least a few months, if not a little bit more. Because the reality is that if you can get a good value like I think there's going to be opportunities for lower valuations out there which allows somebody to get into a business that couldn't otherwise get into. I mean people say like, oh, well, it's a bad time to buy a business because this stuff is happening but you could get the same business that potentially four months ago would have cost you 1.5 million. If they have cash flow issues and they have a bunch of other stuff, there might be one out there that is 750. It's really the same business. Maybe it needs $60,000 in cash infusion to survive what's going on or $50,000 in additional cash to survive what's going on for the current process but I think for most businesses, this is a temporary liquidity issue and not necessarily a fundamental the business is just completely destroyed. Jason: So going to your example, I mean, you just gave an example of a business where because of what's happening hopefully temporarily; obviously, none of us has a crystal ball. In your example, the business value dropped in half. It kind of seems to me that if you're going to buy in that environment, you have to kind of know yourself. How did I react in 2008 when I saw my 401k drop in half temporarily that kind of thing? It feels like it's more of a risk tolerance question as opposed to a more simple decision. You have to know yourself, how you react, how you're going to sleep at night. Would you agree with that? Dave: Oh yeah, definitely and that's there's so many caveats. I mean, you'd have to pick a much more specific type of business and I would imagine if I've never been an entrepreneur and I've had a regular middle management or upper management job and I'm just going into entrepreneurship this would be; it's going to take some cohunes to pull the trigger on something right now in this environment just because of how many unknowns we're going into as to if it is in quick recovery, what's the long term economic impacts from a potential but hopefully not recession and some of the other things or we could come out booming. I mean, there's going to be a lot of pent up demand for every service after this is done. Jason: I was thinking there's going to be a line around the block at your barbershop. Dave: That's funny, I actually did; I did okay do I get myself a haircut. Yes. Jason: No, it's nice. Dave: I'm going to show you the back. That's a little; but yeah, I actually talked to a salon owner today that I used to do marketing for and I was telling her; she was like what do I do? She's got a good business but I pay everybody and lose 25,000 and then pay my rent when we're closed. And so she's in a much better position. She's got plenty of money laying around and she had no debt. And we had a conversation and I said look, if I was you, you've got these lines of credit that aren't used, the bank may close those down soon because I have talked to several banks; smaller banks that are concerned about not necessarily lending on new businesses, but really more they're concerned about liquidity without this stuff coming down from the federal government where they can't do; I have a loan for a new primary residence I'm doing and the guy was on it's a portfolio loan, which if you guys don't know what that is, it means that the bank is going to hold the note versus handing it off to Fannie or Freddie Mac because my taxes are very difficult to do because I have seven or eight businesses and all these different things. And they said they're not doing any portfolio loans because they have 60 million dollars in commercial credit lines that have not been pulled down yet that if those were pulled, they have to have enough cash to be able to provide that liquidity to those commercial lines and so that's affecting them. Jason: That's pretty interesting. I was looking at online savings accounts yesterday and I was expecting that the interest that they pay savers would have dropped down to a couple of basis points. In fact, it was still up in the 1 ½ to 1.7 range. Dave: That's the reason why. The reason why is because they need depositors because they were concerned about whatever happens. A lot of commercial credit lines were closed in this type of environment because really the banks aren't afraid of everybody; every customer defaulting. What they're afraid of is every customer maxing out their line at once and taking all the liquidity from the bank. So that's one of those issues and so I personally had some large, large lines that I just pulled out all and put it in a checking account. And I'm happy to pay the interest on the short term so that I have access to capital, particularly because I do plan on; even though I'm pretty busy I do plan on being a buyer of business assets here in the next couple of months. I don't know what they're going to be. I just know that if you do have cash, if you were fortunate enough to have money sitting on the sidelines due to just serendipity or it just being the right time and place, there's just going to be some unbelievable opportunities. And I mean you can see them everywhere. I told my friend that was a salon manager; I said, look there's going to be a lot of salons that are closing down or people that just need cash and they pay their day to day bills with that money. Call them and see if you can buy all their color product that they have sitting in their salon that's not being used for like 10 cents on the dollar. Jason: That's a pretty interesting idea. One thing I've heard with those small local service businesses that have been put into a shock so hard is to reach out to their regular customers and ask if you'd be willing to prepay for the next haircut or the next meal. I think there's a lot of community spirit of none of us wants to see the small businesses in our town collapse so many of us who have the means are willing to prepay just as a sign of good faith. So as always, anytime I talk to you it's a fascinating conversation, as kind of that final piece I would love it if you could give a synopsis right now; let's see today is March 25th, so with the caveat that at today's speed of news cycle. Dave: 1:35 PM. Jason: Yeah, anything can change. So at 1:35 PM Eastern on March 25th, 2020 in the middle of the coronavirus I would love to get just your little quick snippet advice for buyers, advice for sellers, and final thoughts. Dave: Okay, so let's start with the advice. I would say, advice for buyers go ahead and go out and look; I would say go out and look as if nothing has happened. Remember that when you're putting LOIs out, you're doing your underwriting afterwards. So if you're looking at a business, you say I like this business in normal times let me go ahead and look at this and place the offer with a condition of you can stipulate obviously always you understand, hey, I'm kind of concerned about what's currently going on, but let's go ahead and get this going. So remember that doing an LOI doesn't mean that you can't do your due diligence and confirm the underlying fundamentals because this month's cash flow is probably more than likely either going to be significantly better or significantly worse than it was last March or last April. And I suggest you just got to have to understand that. It doesn't mean you got to close right away. As far as sellers are concerned that would be my number one piece of advice is to keep moving forward up to the point where you do have to make the commitments. You can still try to get the SBA financing, get all your ducks in a row, and then once you have everything in place, you can decide to make the final decision based on where things are at that time. Because by the time; like you said in 30 or 45 days we could be in a drastically different economy. But you might have started a deal when nobody else was bold enough to put out the LOI. You might have an exceptional value on a business that's right back to being extremely healthy. And as far as sellers are concerned, it's really just assessing. Maybe it's possible if you have to sell, you really need to determine what your best alternative to a non-agreement is. Are you willing to go back and run this business for a year inaudible[00:31:29.8] or mentally are you done? You don't necessarily have to tell the buyer that. But if mentally you're done and you have an offer that comes to the table that's lower than what you're expecting, you're really going to have to grapple with the decision of are you going to stick this out and do the work to make sure that this business is healthy again so that you can get your higher valuation or is it time to just accept a lower offer and realize that they're not gouging you? That it's just most of the buyers are buying off of the cash flows of that business and significant disruption in cash flow is a very reasonable thing to reduce the purchase price of a business. I mean, I saw that when I sold mine. I won't get in the numbers, but I had a higher number and then we had a small hiccup because we lost one contract and still very healthy business but it had a material impact on what our future cash flows for expected without having to make changes. And I totally understand that. In principle, we agreed to a multiple which just unfortunately for me it's a lower purchase price when you use the same multiple if you lose $5,000 in monthly cash flow. And so it happens but again, on the other side of that, being somebody that had a higher offer that then wasn't able to for whatever reason didn't go through; there's no fault of my own and then going to another offer that was lowered because of something had happened. I think we were dealing with the China tariffs and all that stuff during that time which looks like a child's play now with what we're dealing with. I resulted; I ultimately made the decision to still sell at a lower purchase price and looking at it now, I don't regret the decision. So if you're just looking for what; instead of me giving you empty advice as a seller all I can do is tell you that of what I did and what I decided to do. And now looking forward, I don't regret making the decision to accept an offer that was lower than what I originally wanted for the business. Jason: Are there any brokers and brokerage that you personally recommend? Dave: Anybody with Jason. Jason: Anybody but me, okay I got it. Dave: I'm very happy; I was very happy with Jason's advice. I think it was spot on and yeah he was just a very level head with a lot of experience on how to get a deal done. And really without railroading you, I think one of the really comforting things is Jason is going to be one of those guys that will tell you, look, if this doesn't feel right, just don't do the deal. You probably won't get to pry out his financing, but I can tell you that he does not need the check from your sale to survive. So he's my; yeah, I don't want to like let the cat out of the bag there but he's not going to push you into a sale specifically to get a commission check and that's something that is very nice to see in a broker. He does this because he likes it and because he's very good at it and likes the transactions of the business. And I was very, very happy with the work that I got done at Quiet Light. I can definitely see; from a DIY-er, I have no problems with the commission brokerage that I paid with Quiet Light at the end of the day. I think it was well earned and I would be happy to do it again Jason inaudible[00:34:48.8]. Jason: Wow, well that's ridic; I have to end it with an endorsement so I think with that I'm going to say thank you so much for your time and your thoughts, you're obviously a very experienced entrepreneur. You've bought, you've sold, you've built, you've experienced setbacks, and here you are with the beautiful fake background of a beach. It's phenomenal. So thank you for your time, everyone. This was Dave Wolf. He owns too many businesses to list. But obviously, he knows what he's stocked up. Thank you, Dave. Resources: Quiet Light Podcast@quietlightbrokerage.com

Is there a way for property managers to reduce delinquent rent payments by more than 50 percent? How can residents positively or negatively impact their credit score by 20-70 points?  Today, I am talking to President Dave Haldi and CEO Steve Jarvis of CredHub, which helps property managers report on every resident, including those considered a credit risk. It reports the positive and negative, incentivising tenants to make paying on time their top priority.  You’ll Learn... [01:47] CredHub: Name change, funding, continued growth, and creating transparency. [02:06] CredHub’s Competition: Most companies only process and record positive payments, not negative payments on individual's credit score. [02:28] Bolt-on Technology: CredHub connects and bolts onto rental software systems to validate positive and negative payments via rent roll system. [02:52] How it works: Provides property managers access to an individual's credit score information reported to credit bureaus and pass-through revenue opportunity. [03:27] RentCredit Plus includes identity theft resolution services and rental payment reporting to credit bureaus for $3.50 each month. [04:20] Customer Support: Resolution Services as Customer Support: If there is a credit issue, CredHub takes on responsibility to work with credit bureaus.  [05:35] Doing Good Things: CredHub helps people get back their financial health and credit for payments.  [06:42] Recapitalization: Report all data at scale to achieve goal of growing CredHub. [07:58] Lease vs. Mortgage: What’s the difference? Educate managers and residents. [09:13] Audit Proof: Information given to credit bureaus via CreditHub must be correct. [11:25] Collections: CredHub has credentials to create trade line for property managers. [11:54] Implementation Process: After CredHub has signed agreement, implementation takes about six weeks. Tweetables Increase credit score by 20–70 points; make paying rent on time a top priority.  CredHub: Bolt-on, backend, rent roll, data pole cleansing and reporting at scale.  CredHub: Gets property managers out of credit business, and puts them in property management business. CredHub reports the positive and negative, incentivizing tenants to pay on time. Resources CredHub CredHub’s YouTube Channel Yardi RealPage Rent Manager ResMan  TransUnion  Equifax Rogers Payment Fair Credit Reporting Act DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz Transcript Dave: ...opportunity for property managers to help reduce their delinquency because we figured out a way to report the negative or late payments. The program can then help increase an individual's credit score 20–70 points on a positive perspective but it will also impact their score negatively and help reduce delinquency by over 50% encouraging an individual to pay on time and making rent their priority to pay. It started four years ago, validated the idea, worked with some property management companies locally. We changed the name to CredHub a little about a year ago, got funded, we've had continued growth, and built an automated technology with a dashboard to create transparency of what we had learned from the marketplace. That's what created CredHub and that's where we are today. Jason: Perfect. There's other companies in the space they that do this. Is that correct? Dave: There are a few companies but we're a bolt-on technology. Most of the companies that we have come across are payment processors and they may process payments only allowing to record positive payments on an individual's credit score. Our technology connects and bolts on to the back-end of rental software systems—Yardi, RealPage, Rent Manager, ResMan, et cetera. Therefore, we validate the payment that has been made because it comes out of the back-end of the rent roll system allowing us to report positive and negative. It also gives the property manager, on-site resident manager transparency to see what information was reported to the credit bureaus once it's been uploaded and helps affect the individual's credit score. So, we're different. We also create a pass-through revenue opportunity for the property manager to make some additional revenue for their bottom line through our program. Jason: Okay, explain how that works. Dave: So, we have RentCredit Plus, which also includes an identity theft resolution services because identity theft is such an issue today, especially in larger properties with mail rooms, et cetera. With that, we charge $3.50 for this program that is identity theft resolution services as well as reporting the rental payments to the credit bureaus, both positive and negative, on a monthly basis. It would be our best results or best practices or we make this program mandatory for all residents. We charge $3.50 per person on the lease including the co-signer and most of our clients charge $7. So, they make a 50% increase of what we charge for the product and for the services that we provide.  In addition to that, we also provide the resolution services, making sure that if they do have a credit issue, we take on all the responsibility to work with the credit bureaus to make sure if something was reported incorrectly, we will fix it. So, we provide that customer support from a third party's perspective, not eliminating the burden to the on-site resident manager and getting them out of the credit business because they're in the property management business. Jason: Got it, okay. So, Steve, what's your role at CredHub then? Steve: Yeah. So, I came in to the company about a year ago when we recapitalized the company as Dave said and renamed it to CredHub and that recapitalization was really meant to build this platform so that we could do this back-end, rent roll, data pole cleansing and reporting at scale. My career was always in automation and travel. I worked for the likes of Expedia and built alaskaair.com for Alaska Airlines and had retired from travel, and was looking for an interesting new project that really had an element of doing good things for people that needed it which, I believe, we're doing it at CredHub. The folks that are now going to be able to get credit for their Rogers payment or are young folks that are credit-invisible or folks that need to get back in financial health back on their feet. It feels really good to be working in this market. I'm CEO, so primarily looking at business development and strategy finance. The goal here is to really do this at scale nationally. You mentioned what makes us different and David had mentioned that the element of negative reporting of late and skipped payments and its impact on getting residents to pay on time for property managers. No one's really done that at scale. Like Dave has said, others in the market that are doing reporting are doing almost entirely positive reporting which it's pretty easy. The hard part is this is what we do is getting all of the data reported and doing it at scale. I came in with the recapitalization, with an element to really growing this thing nationally and doing it in a big way. Jason: Perfect. So, what questions do property managers typically want to know about CredHub? Steve: Well, one of the things, for me, especially coming into the property management space having been to trade shows, travel, and technology, the core of what we do is really, really easy to understand, which is really compelling. When we talk to property managers, it's pretty easy to get what we do in 90 seconds. Like really, wow, you can report positive and negative to credit bureaus, reduce my delinquency, I can add a revenue stream, and my residents will like it because I'm helping them. There aren't a lot of questions there. We do get some questions as we roll through closing clients on the legal side. We'll get a legal department and a property management company worrying about disputes from their residents but it's a fairly easy question to answer because the residents have a financial obligation. They have a contract called a lease. It's not that different than a mortgage. Property management companies who aren't being paid by the residents have every right to report that to the credit bureaus. There's an education process that I think we need to go through on that side of the sales process with property managers. Oftentimes, we'll get questions on whether this is optional. Property management company may want to have this be an opt-in for their residents. That's not how we work. We report the entire file to the entire resident population to the credit bureaus which is what they want. Our program really only works for property managers if everybody's being reported including those that are credit risk. Dave, do you have any other? Dave: Yeah. I think a couple of analogies would be and it really creates this carrot with the stick, encouraging people to pay on time and because they require everybody, all of the residents to be reported the messaging is consistent for everyone. It also has helped us because of our platform being so audit-proof because the information that needs to go to the credit bureaus has to be right. We found that we've really helped clean up the data that we're pulling out of the system because it has to be correct. We provide an error submission report and that report can go back so it's something that maybe the on-site resident manager or assistant manager can help clean up as they're going through their lease renewals or new residency. We found errors or mistakes when maybe a check has come in, it got incorrectly posted. Because ours is third party, it helps to create checks and balances and the system is audit-proof. It provided an additional layer but easy for people to log into and make the changes. And we support them seven days a week, 24/7 if they have an issue. I think the other questions that may come up is, "Well, how does this work?" One of the things for a property management firm who works with us, we create a trade line at the credit bureaus. We have credentials and privileges with TransUnion and Equifax so we credential them and create a trade line with the bureaus. Therefore, if we are working with somebody and we pick a date that we report on the 10th of the month, rent is late at 30 days because we pay rent in advance. If an individual is delinquent or pays late after the 10th or they don't pay, Fair Credit Reporting Act says, "It can't be turned to collections until 90 days." If we report on the 10th, we're going to be 50 days ahead when that person can go to collections affecting their credit score, encouraging them to pay the property manager in full and not having to lose that income that could be the cost of going through collections. That's a piece that becomes critical in what we do and a lot of questions get surrounded about that but we have all the credentials to create the trade line necessary for the property manager. Jason: How difficult is this for a property management business owner to implement? Maybe you could talk a little bit about the process. Dave: The process is we meet with them, we work with them on the pricing, and figure out when it would work for them to implement. Once we have a signed agreement, we try to implement it within six weeks if that works for them.  Once we've got credentials with the bureaus, then our data team connects with somebody in their office. It usually takes an hour, but once we pull the data to get it out of the system, then we go through some testing on our end making sure that the data is correct. Once we've confirmed that, we give them four weeks or a month. Let's just say, we signed a contract in August. We would give them the month of September, lay out a timeline that we work with them to educate their on-site resident managers, create a lease addendum because we know that our best practices if they sign, if they put the addendum in the lease, it gets explained to them helping that education of why it's important to pay your rent on time. Then, they sign the leases with the addendum. We have a template, but we can make changes to the addendum depending on how they want to implement it. And then we would begin reporting on the 10th of the following month or on a mutually-agreed date they want to pull it. In some states like Washington, with just changing the 3-day evict or 14-day evict, we used to report some property management firms on the 15th but because of that change, they have asked us to report on the 5th. So, we can change the pull date and the report date helping encourage the protection of the property management company for these individuals who are playing the system or gaming the system and not paying their rent on time. Jason: Okay. Cool. It sounds pretty simple, sounds like a really good idea, really good service. Now, can landlords listen to this, besides property managers, also implement this, or homeowner? Dave: Yes. We work with any property type or size. If they don't have a rent roll system, we just create a spreadsheet for them, collect the necessary information, and then they can upload the spreadsheet themselves through our portal. We have a variety of ways we can connect and help very managed. Jason: Very cool. All right. The CredHub sounds like a brilliant idea. It reports the positive, it also reports the negative, incentivizing the tenants to make sure they're paying on time. It gives them the benefit of building some credits so there's a carrot and a stick connected to this. You also have identity theft resolution they can be tied to this that can be a profit center. Ultimately, how much does this cost the homeowner or property manager? Or do they just make money doing this?  Steve: Pass-through revenue model, they make money doing this. We bolt onto their existing system, we help them do the lease addendum with the residents and they actually make money. We like to think of it as a win-win-win. It's good for the residents, it’s great for the property manager, and obviously, we're in business for profit as well. Jason: Win, win, win. All right. Anything else that anybody should know? How can they get in touch with CredHub if somebody's listening to this and they wanted to get started, they wanted to check you guys out? How can they connect? Steve: credhub.com would be the best place to go. We have a YouTube channel that has some really simple videos on it, you can link to those from the CredHub website. In fact, our animated “what we do” video is in the hero image right on the homepage. We have a Contact Us section and a there's a form there that property managers can sign up with the number of units they have and we'll follow-up. That's probably the best way to do it is just to come visit us at credhub.com. Jason: Perfect. Sounds like a no-brainer, it makes sense. I think what you guys are doing is going to help out a lot of people which I resonate with and I appreciate you guys coming out on the DoorGrow Show. Dave: Thanks for having us. Jason: All right, we'll let you guys go. So, checkout CredHub at credhub.com. For those that are new to watching or listening to the DoorGrow Show, be sure to like and subscribe. Leave us a review somewhere that would really make a difference and check us out at doorgrow.com. If you're wanting to grow your property management business, or you're in need of a new website, or you're just wanting to make sure that your business is growing as effectively as it could, reach out. We'd love to talk to you. Until next time, to our mutual growth. Bye everyone.

David Saben is on a mission to make taking tests less painful, and he’s using data to do it. In this episode, he’ll discuss reviving methods developed in 1979 to shorten tests and make them more effective, as well as how to use psychometrics to aid in the design and crafting of an effective test. David Saben: When I see my son who's 11 years old, spending three days and testing when I know there's absolutely no reason for it that you can do that in an hour. Ginette Methot: I'm Ginette Curtis Seare: And I'm Curtis Ginette: And you are listening to Data Crunch Curtis: A podcast about how applied data science, machine learning and artificial intelligence are changing the world. The father of lean startup methodology once said “There are no facts inside the building so get the heck outside.” The education industry is no different. Sometimes the facts that’ll make your machine learning career are waiting just outside your office.  Read more at mode.com/mledu m o d e dot com slash M L e d u Ginette: Today we chat with David Saben, the CEO and president of Assessment Systems, an organization innovating psychometrics (the science of assessment) Dave: I originally started my career in telecommunications, uh, bringing voice and data services into institutions and to learning institutions. And then when I realized is, is that connecting universities and for profit schools, you know, connecting them online really created a huge opportunity for learning and really crossing barriers to learn and really meeting learners on their terms with online learning courses. And that kind of brought me through this, this journey with using technology to, to really make better decisions in learning and knowledge and how we do that effectively. And that has started a about a 16 year career focused on that using using data, using e tools to make a better learning environment for everybody and make us more effective in the way that we, we gather information and retain information. And that that's left. Let brought me, um, into several areas. One is in the learning sciences is how do you, how do you deliver learning content more effectively, but also in the assessment side as well, where, how do you measure what folks are learning effectively and painlessly in that that's brought me on this, uh, this journey into the assessment industry and really making sure that every exam that's delivered in classrooms or whether it's a licensure exam is as fast and as fair as possible and using data to be able to do that. So really mitigating the risk of human bias when it comes to measuring a human's abilities, uh, which is, uh, which is a troublesome area, right? Curtis: Yeah. And now you say a effective and, and painless. And I know most people hate taking tests, so, so tell me how you approach that. Dave: Yeah. Well, I think there's a lot of ways. I mean, I think one of the, one of the most important ways is that you make the test faster, right? You make, you know, in 1979, I was the chairman of assessment systems help create a technology called computerized adaptive testing. What that uses, it uses algorithms to gauge what you know and what you don't know and then basically tailoring the content that you see, the next item you see gets more progressively difficult or progressively easier depending on your, your ability. And what that does is that reduces test time by about 50%. We see that with the ASVAB exam that's given to our service men and women to make their testing experience faster and fair and really, and we're starting to see that really across the world with measurements. So really making those exams tailored to the person's ability, uh, which is really, really important. You know, what you don't want to do is you don't want to give one test that doesn't change to everyone cause that's really, really inefficient. You know, if I'm going through the test and I know I know the content really well,

Why Students Don’t Like Language Class (With Dave Weller) - TranscriptionTracy Yu: Welcome back to our podcast, everybody. We've got our favorite guest. Can you guess who he is?Dave Weller: Hurrah!Tracy: [laughs] Let's welcome Dave Weller. Hey, Dave.Dave: Hi.Ross Thorburn: What are we talking about today?Dave: I think we decided to do something almost akin to a book review on Daniel Willingham's book on cognitive psychology and neuroscience, "Why Students Don't Like School."Ross: We're going to try and apply what we read and what we remembered. We're going to go further outside taxonomy...Dave: Oh, no.[laughter]Ross: ...and try and apply it to language teaching.Dave: The book is about neuroscientific principles. The blurb is, "A cognitive scientist answers questions about how the mind works and what it means for the classroom." He's picked nine very robust findings from the field of psychology. Now, I hope you've done your homework, and you've read the book as I have.Ross: I think it says a lot about us. Dave, for this, read the book twice. I read it once. Tracy read it...Tracy: The last 10 minutes.[laughter]Dave: All it means is Tracy is a very fast reader.Ross: [laughs]Dave: What we decided when we set ourselves this challenge was that it'd be really interesting to take a book that was designed with general education in mind and see how well we could transfer the principles across to language teaching.Ross: Absolutely. We often comment that there's not enough taken from general education and applied to the field of language learning.Dave: Hopefully is we'll find out that a lot of the principles can equally apply in the language classroom as in normal classrooms.Ross: Great.Dave: Ross, one of the things I liked from his introduction was talking about why teachers are naturally skeptical of theory. There is a big gap between theory and practice. Even mental processes aren't isolated in the classroom, whereas they are in research.A classic example he uses is that about drilling. In the lab where you isolate drilling and see the effect that it has on learning is wonderful. [laughs] The more you drill, the more you repeat, the more you learn.However, any teacher that steps into a classroom knows if you drill your learners for an hour straight, the drop in motivation is not going to make up for the effectiveness of that technique in learning. This is why that he's taken a very teacher‑centered view of research and only picked principles he thinks can be used effectively in the classroom.Ross: Whatever you do read in a book, you're passing it through your own filter of what you think is going to be personally useful for you. A lot is going to get filtered out. How about for this podcast, we pick out some of the main principles?He's got nine cognitive principles. They relate to things that happen in the classroom. How about we pick some of the most interesting ones? We can talk about how we feel language teachers might be able to apply those in their classes. Should we get started?Tracy: Yeah.Dave: With this one, the principle of that people are naturally curious, but they aren't naturally good thinkers. For me, when I read this, what struck me was how similar it is to the zone of proximal development, scaffolding, Lev Vygotsky idea.He talks about oftentimes we think about what the answers are that we want our students to get. If we're trying to say, "What's the answer to this grammar question? There's a word that means this. What's the word?" We should be trying to engage them with the questions and leading them to the answer.Ross: He says, "It's the question that peaks people's interest. Being told the answer, it doesn't do anything for you." Have you seen "The Prestige" before?Dave: I've downloaded it. You asked me that the other night, but I haven't watched it yet.Ross: In The Prestige, they talk about this. As a magician, if you do a magic trick, people are amazed by it. As soon as you show them how to do the trick, people are completely unimpressed by it.Dave: Maybe, that's one of the reasons that task‑based learning or test‑teach‑test lessons can work well, is because you put this question at the beginning. You put the hardest part first, putting students into a position where it is difficult for them. It gets them to think about it.It's the question that's interesting. Then it leads to the answer later on, whereas something like PBP, which we know gets a lot of bad press, doesn't put the question at the beginning.Tracy: That's something related to the teacher's role in the classroom. They're not just to spoon‑feeding the students. They have to make sure what kind of questions they can ask the students. They facilitate the learning.You don't want to mix the prompting questions which scaffold student learning with guessing what's in my mind.Dave: Totally agree. Yes, it's a good example from real life, Tracy. One of the things to be careful with this one though is to be careful the questions you pose aren't too hard as well as grading your language, grading your instructions.If you ask students a question and it's very specific, there's only one possible right answer, it's really difficult. They're beginner students, A1 level maybe, and you ask them, "So the past perfect continuous, when would you use this?" They immediately look up and go, "I don't know. There's no way I can know," and they immediately check out.Daniel Willingham says, "Respect students' cognitive limits. Don't overload them with information. Don't make the instructions or grade your language too much," is how I would interpret that for TEFL. Also, "Make sure the questions you ask them are within their ability to answer."Ross: How about we move on to another principle, then? My personal favorite, and probably yours as well, Dave, is, "Memory is the residue of thoughts."Dave: No, I hate that one. Leave that one out.[laughter]Tracy: Can you guys explain this a little bit?Dave: Yeah. From "Memory is a Residue of Thought," I think what Daniel Willingham is saying is that students remember what they think about. In your class, if they're thinking about your flashy warm‑up where you jumped up and down and screamed around like a monkey, then they're going to remember, "Hey, teacher screamed like a monkey today. That was really funny."That's what they'll tell their parents. Whereas if they do a task where they have to figure something out and talk to their friend about the best way to negotiate with somebody or the best way to get to the train station, and they're using English to do that, then that's what they'll remember.One of my biggest takeaways from the book is that he suggests that to review your lesson plan in terms of what the students will think about. Every task you have, every activity, every stage, put yourself in your learners' shoes, and imagine what they're going to think about as they're completing that.My suggestion on top of that would be, "Do the same thing for the language use." Look at your lesson plan, or imagine it. Think about it from your learner's point of view. What language would you use to complete that task?Ross: Something else I found interesting, it was a quote from him. He said, "Fold practice into more advanced skills," which got me thinking. The way I would apply that to the language classroom is when your students advance a little bit...Say they've moved up from present simple, and now they're doing past simple, just a cliched example. Instead of practicing just that skill of past simple, make sure they get a chance to use prior practice.Make sure they get a chance to use the skills and recycle a language from previous classes. When they're practicing past simple, they're also integrating present simple and the other things and the other vocabulary that they have learned.You don't just focus only on the target language for that particular lesson, but you bring in the other language that you used previously. I find a lot of teachers don't do that. They're so focused on the target language for that one lesson, they forget the previous lessons.Ross: That might be one of the reasons why extensive reading works so well, is because all of the forms and grammar that you might have learned previously are all going to be recycled in natural stories.That's maybe why also genuine tasks where you don't prescribe the language for the students to use in some sort of prior practice can also be beneficial because students will get to bring in language that they've used from previous lessons.For teachers, if you're using a great textbook that automatically recycles or has in it recycled language from previous units, that's great. Even if you don't, you can just pause in lessons and say, "What is there from previous lessons that we've learned that you could also use in this task or in this activity that could help you," and think about that when you're planning as well.Before we finish, I wanted to talk about the very last chapter of the book which is about helping teachers improve. He makes this nice distinction between experience and practicing. Teaching, like any other complex skill, must be practiced to be improved.It reminds me, I think the same author Rubinstein, the pianist, says something like, "I play the piano for nine hours a day, but I only practice for one." There's a nice difference there between what you're actually doing and then when you're making a deliberate effort to get better.One of the things is that teachers are very busy. It's very easy for all of your classes to just go by in a whirlwind, but if you can find the occasional class or the occasional thing to work on for an hour a week, in the long term, that can improve your teaching.Dave: Actually, he suggests a good method, which I'm very eager to adopt. To find another teacher he wants to improve, he says, "Perhaps watch a video of another teacher teach and comment together jointly on that so you gain each other's kind of levels and things you talk about."After you've done that almost bonding experience, then film yourself and swap it with the other person so then they comment on yours. Of course, be nice.Ross: A couple of other points on that. He says, "When you video yourself, spend time observing. Don't start by critiquing."Dave: I remember the first time I videoed myself or saw myself teaching. I was amazed at how many unconscious habits I had. I presented myself entirely differently than the way I thought I did. It's almost like watching a stranger teach.It was that difference in my expectation. The image I had in my head of myself teaching was clearly very different to that. You can only see that if you have that visceral experience, when you see yourself teach.Ross: The purpose of watching your partner teach is to help them reflect on their practice. Often, when people do peer observations, it's so easy to just say, "Oh, you did this wrong. You need to change this. This didn't work," but the purpose of it isn't to just throw out a few quick fixes. It's to get the person to engage in their own teaching and reflect.Tracy: Sometimes, I don't blame the teachers. Their experience is like that because they have been criticized from day one. Even if they did something nicely, still their trainer or their manager will just pick the area that they didn't do very well.Also, for a positive reinforcement, people are more likely to change their behavior if you tell them what they did really well. Then they could keep working on it rather than just starting from the negative aspects, and then you didn't do it very well.I don't blame the teacher sometimes because that's what they were told. That's how they train. That's how they experience. That requires the trainers to understand how to balance it and how you demonstrate this to your teachers from day one.Dave: Totally correct. I think you've hit the nail on the head there, Trace, by saying what would change the behavior of the teacher, because they can't. You need to take the tack if the teaching is very directed feedback and that will work, then do that.If they're unconfident, nervous, anxious, you need to tell them what they've been doing right as well. Don't change everything. Keep what good they have been doing and then tweak a little bit.Ross: If you've been convinced at all by the last 14 minutes that this book would be useful, it's by Daniel T. Willingham. It's called Why Students Don't Like School. It's subtitled "A cognitive scientist answers questions about how the mind works and what it means to the classroom." I highly recommend it.Also, since we're on the topic of books and you're about to plan a lesson, I highly recommend...[laughter]Tracy: Wow, good. Nice segue.Ross: ..."Lesson Planning for Language Teachers ‑‑ Evidence‑Based Techniques for Busy Teachers" by...Tracy: By Dave Weller. Congratulations, Dave.Dave: Thank you.Tracy: Hope you guys enjoyed the podcast. See you next time.Transcription by CastingWords

Are you tired of dorm food and want to avoid the mad rush of finding a place to live off campus before next semester? There’s got to be an easier way for students to rent houses and apartments. It’s a problem that many entrepreneurs have tried to solve.  Today, I am talking to Dave Spooner of Innago. There are few incentives for landlords to digitize their rentals. Landlord demand for a listing platform is low, but there definitely is high demand for better tools to effectively manage and communicate with tenants.  You’ll Learn... [02:50] Tenant Management Software: Making landlords lives easier with online rental payments, tracking payments, basic accounting, lease signing, and tenant screening.  [04:14] Understanding Innago: Flexible, effective, simple, and intuitive software for landlords and property managers.  [06:05] Learning Curve: Competitors’ software requires expertise and certification. [07:32] Who wants to waste time adopting ugly software?  [08:58 #1 Priority: Intuitiveness in software; speed is love language. [10:20] Different portals for different people to be more productive. [12:16] Find balance, and avoid too fast feature creep. [13:14] Possible future integration with Zapier and other third-party tools? [14:22] FAQs: Access permissions and pricing for landlords and tenants. [17:25] Innago offers unique and unmatched level of support. Tweetables Innago software is flexible, effective, simple, and intuitive. You shouldn't need a certification to use property management software. Choose features that matter, and get the biggest bang for your buck.  Big believers in early success begets future success.  Resources Innago Buildium AppFolio Propertyware Rent Manager.  Jason Fried of Basecamp Zapier 1099 Form Freshdesk HubSpot Intercom DGS 62: Property Management Accounting with Taylor Hou DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz Transcript Jason: Welcome DoorGrow Hackers to another DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the unique challenges, daily variety, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses, and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.  Today's guest, I'm hanging out here with Dave Spooner of Innago’s. Dave, welcome to the DoorGrow Show. Dave: Hi Jason, thanks so much for having me. Jason: It's great to have you. Dave, we always like to get into our guest first, help us understand who Dave is, and how you kind of got into the space that you're in, and give us a little background. Dave: Yeah, absolutely, I'd be happy to, and thanks for the intro. I graduated from university in 2013. I kind of already had that entrepreneur spirit. Me and a couple other folks got together and we wanted to solve the problem of finding a place to live. We're not the first people to try to solve it, and I'm sure we won't be the last to try to solve it, but we want to make it easier for students to rent houses and apartments off campus. A lot of those markets are still mostly or fully offline, and there's usually a mad rush to try and find a place to live. We recognize those issues and we tried to solve them. As we were going about doing that, we kind of quickly realized that there's not a lot of incentives for landlords to digitize their portfolio. There's not a lot of incentives for landlords in student housing to really do a whole heck of a lot, but helps the students out because they're already going to fill other properties, which is really high occupancy in student housing.  We kind of pivoted, and listened to the market, and realized that there wasn't a huge demand on the landlord side for this listing platform, but there was a lot of demand for better tools to manage tenants, and better tools to manage and communicate with those tenants, and to manage their businesses. That's kind of how I got my foundation. I worked on that listing platform for a few years, learned a lot about the market, and then myself and the CTO of that company started and founded Innago in 2017, and we've been hard at work trying to make lives easier for landlords ever since. Jason: How do you make lives easier for landlords? Dave: Innago is tenant management software, and we call it tenant management software instead of property management software because we really believe that the focus should be on managing tenants, managing those relationships, and managing those personalities. Innago, of course, includes a lot of your classic property management tools like online rental payments, tracking payments, basic accounting, online lease signing, tenant screening, etcetera. But at its heart, it's a communication platform. It's something that makes it easier to interact with and manage those tenants. We believe that having that, having that foundation enables landlords to become better landlords, and property managers become better property managers. Jason: I haven't heard of the software before, is this something that there's a good amount of property managers already using? Is this geared towards landlords, or is this geared towards property management businesses? Help me and the listeners understand Innago here. Dave: Yeah, absolutely. We work with both. We work with landlords as small as one unit, and landlords in the thousands of units. The software is really flexible, it’s effective, but it's also simple and intuitive for somebody who just owns some properties on the side, works a normal nine-to-five, and then manages at nights and on weekends, and for a landlord or property manager that's fully dedicated. We work with both property managers and landlords. We predominantly work in the residential space. We do a lot of student housing landlords, given my background, and my partner's background. We also have some commercial landlords as well. It's a really powerful, and flexible tool, and we work with all sorts of different clients. Jason: Cool, that's exciting. Help people understand, because a lot of the listeners in our audience probably already have a property management software, I mean, probably likely. They're probably already with Buildium, AppFolio, Propertyware, maybe Rent Manager. They're probably with one of these guys. But nobody's ever fully happy with their property management. Dave: Right, of course. Jason: So help those listening, how can they see where you fit into the market in relation to these? Dave: Well, yeah, it's funny you say that. I was actually listening to one of your earlier podcasts with Taylor, and he has the accounting services, the consulting accounting services, and one of the things that he mentioned, they work exclusively with AppFolio users, and kind of what they said is, “We only hire people that have worked at AppFolio, and we will only work with AppFolio at this stage because that's the only thing that we're comfortable with,” because it's this monolithic behemoth that you need expertise to even navigate, right? Jason: Right. Dave: That's definitely true for AppFolio, and it's true for a lot of the other software. There's a huge learning curve there. The first time we hire somebody on Innago, we always sit them down, and we jump on LinkedIn, and we do a little exercise, or research the companies. We're not looking for employees of those companies, or even their company page, we’re actually looking for employees at property management companies that their job title, their role is like the AppFolio expert on T, because you need certification to understand how to use it. That was kind of the initial kernel Innago came out of is, you shouldn't need a certification to use property management software. It should be like picking up Gmail for the first time, or picking up iPhone for the first time. It should be intuitive, and simple, and elegant, and powerful, and flexible to work with a lot of different users in a lot of ways. That's really our difference, in the way that we're approaching the market, putting a lot of time, and thought into the features, and the way that they interact, and the way that the user interacts with those features. We're really proud of the features that we do have. It is an ongoing product, and we're constantly adding more. I think for a lot of property managers, and landlords on the higher end, they're going to find at this stage that it might not be a perfect fit, but for those folks with small to mid size portfolios, it's got a lot of really great stuff that it will work well for them. Jason: Yeah, I'm in total agreement. When it comes to software, the number one challenge tends to be adoption, and ease of use is right there. If something is intuitive, that's the biggest challenge, and hurdle. Dave: Right. Jason: I don't even like them using software that's ugly. Dave: Right. Jason: I just can't bring myself to do it. Maybe it's the designer in me. I don't know, but if I'm going to be living in something, I don't want it to be ugly. That's why I use Apple products because they just… Dave: Right, absolutely. Clean design. Jason: I was around my mom just yesterday, and she had a computer and she was like, “I clicked on Chrome, and it's not loading, and nothing's happening coming up,” and I'm like, “I don't know, that's a PC. I've never had that problem on a Mac.” I just don't have that problem. I just think it's funny. I was like, “I don't know, good luck.” Dave: Yeah absolutely, and a lot of property managers and landlords—many are very tech savvy, there's also many that aren't so tech savvy. It's equally, if not more important, to have something that's not incredibly complex, and incredibly challenging, and opaque, and difficult to enter into. Jason: I'm incredibly tech savvy, and I probably could’ve figured out my mom's computer thing, but it probably would’ve wasted an hour or two of my time and I don't want to waste time figuring out my software at every step of the turn and teaching my team members how to figure out software at every step of the turn. Intuitiveness in software is my number one priority. A lot of people build their whole set up internally in their business, trying to find one piece of software that can do everything, and it's usually really awful at everything in a lot of instances, instead of finding the easiest, and best, and fastest tools. Speed is my love language, I think in business, and I want it to be fast, and want it to be simple, and intuitive. I love that that's kind of a foundational goal with your software, because I don't believe that any of the other property management software, that was their foundational goal, ease of use, and to be intuitive. If it was, they've gotten long far away from it. Dave: Right, yeah, I think you're right. Jason: Yeah, and some are much worse than others, and some of them, they can do everything. They're like the ultimate Swiss army knife. Like I've joked in the past, you're not going to see a handy man carrying around a multi tool to try and do all this hard jobs. Dave: Right. Jason: He's going to have a nice tool box with the best tools. The software’s more intuitive, the software is really easy for people to use, and now you're saying on all parties for like the owners, they want to maybe check reports, is there an owners portal? Dave: There is. Jason: Tenants that want to pay rent, and do their stuff, there's tenant portal. And then for the property manager, they can manage and see their portfolio pretty easily, and know what's available, and vacant. Does this have marketing stuff connected to it yet for listing, and the getting the properties out there in the marketplace? Dave: Yeah, great question. We do not currently have marketing. We plan to roll that out, but as you mentioned, I think one of the problems that's happened with other software packages, the feature creep went too fast. They wanted to get all the features that any landlord could ever ask for out as quickly as possible, and that has not been our approach. We have said let's do this methodically, let's think about ways to integrate this into the way that the rest of the software works. Let's make sure that it's easy to use. We are constantly adding features but we're not necessarily rolling out everything that everybody wants, all at the same time. Market syndication is what we call it. The marketing piece is definitely on its way, but it'll probably be another three or fours months before we have that out there. Jason: Yeah, feature creep is a real issue. I'm a big fan of Jason Fried. He's the CEO of Basecamp. I got to hang out with him on a Skype call for 90 minutes. He cut my staffing costs in half overnight, no doubt. I'm a big fan of him. By saying he cut my staffing costs in half, I should say he doubled our productivity. I didn't just fire everybody. We just became that much more productive because he helped me understand how we had so many interruptions, we had so many things that weren't intuitive, and he changed how we communicate as a company. He has a similar philosophy when he talks about creating their softwares. Basecamp doesn't do a whole lot compared to a lot of other software, it’s pretty limited in its feature set, but it's consistently always at the top of the tools and resources people mention for project management even though I really don't believe Basecamp is a project management tool, I believe it's a communication platform for internal communication, that's how we use it. Everyone's going to ask for features, you have to really be picky in choosing about what are the features that are really going to matter the most and get the biggest bang for your buck and really make a difference without it becoming overly crazy, too cumbersome, unintuitive, and difficult to do. There's always that balance of managing all of the features.  Do you see that you guys will be doing any sort of Zapier integration so that people can create zaps and start connecting and integrating with third party tools? No software has come out with this yet. Dave: Yeah. That’s a really good idea. That is not our road map but I love Zapier. We use it for all sorts of other things, whether it's connecting Wordpress to HubSpot or whatever. It’s a really cool platform. That’s an interesting thought. We hadn’t gotten that far. We might still… Jason: Add it to your list and be the first. I'm waiting to see who is the first property management software the adds Zapier integration because everyone's been asking for it. All these people want it connected to their automation. They want to connect it to their process street processes, or they want to connect it to whatever. I think this would be a really cool thing. Dave: We’ll let you know when we do. Jason: I keep throwing that out usually to property management software that I have on my show and I'm waiting to see who's the first to have Zapier integration. Some people call it [zey-pier], but I think [zey-pier] is weird because it creates [zaps], people, so it’s Zapier. You're not [zey-ping] your business.  What else should people know about this software? What are some of the most common questions that a property management business owner might ask that they're concerned about? Dave: Well, one you hit on was the sub users. Enabling not just the head property manager from accessing the platform, but also giving out who has access to which permissions, who has access to which features. Maybe it's Bob, you want him to handle these categories for these properties, or you want your property owners to log in and be able to handle it themselves. Jason: There's the ability for vendors to leverage and use the system as well? Dave: Not vendors, that would be like a maintenance person that you either have on staff or you have on retainer 1099 or whatever. We do not have a vendor portal at this time. That’s a big one and then the other really common question we get is of course the pricing because of the sector that we’re in, that's at the top of our base mind. Jason: Do you want to tell pricing now? If you're planning on changing, don’t. Tell them to go to your website. Dave: No, I'd be more than happy to jump into pricing. Now it’s pretty unique, we're 100% free to use for landlords. There’s no monthly fee, yearly fee, setup fee, there’s no contract. There's absolutely no cost. Everything that I've mentioned is included. Instead, when a tenant pays rent online, we charge them $2 for an ACH transaction. We charge them $2.75 for a credit or debit card, and that's it. Jason: Totally reasonable. I've been saying for at least over a year to people who have listened to some of my older podcast episodes that free property management software will come and there will be the day that somebody's going to offer it, just like people aren't paying for Gmail, people aren't paying for this sort of stuff and it's making money. It manifested, here it is. Dave: That’s right, we did it. It's 100% free for the landlord. Some landlords see the value in an online payment, they see it so highly to pay actually choose to incur a cost and we allow them to do that if they want to, but for most landlords 90% plus, they're not paying a dime to use Innago. Jason: Very cool, that's really interesting. This would be fantastic then for startup PM's, startup property managers. A question that my team would care about is for the rental listings, the vacant properties, do you have some way of listing the vacant properties in some web based fashion? If they're putting properties into their system, is there some sort of code that we can embed on a website to show their available rentals? Dave: Again, there's nothing on the marketing side just yet. Everything is cotntained within Innago but we certainly see the value in that. Jason: Maybe in the future then. What else should people know about Innago? Anything else you want to throw out there? Dave: Well, we offer particularly in our sector where you do have some of the lower cost platforms out there or some of the simpler platforms out there I suppose. Oftentimes, they don't offer any sort of support beyond a 48-hour email window. With Innago, we’re a little different, we offer full phone support. We also have embedded videos and help section to ease landlords along in the system as they get started and learn the platform. We’re really big believers in early success begets future success. We want to make sure that we’re hand holding for your first month, two months on the platform, and ensuring that you understand how to use it. You can use it effectively and can leverage it to improve your business. Once you do that, then you're off to the races and in really good shape. We offer a unique level of support that many others can't really match. Jason: What platform are you using for support? Dave: We use Freshdesk, and we use HubSpot, and we use Zapier to connect certain things to other things. Jason: Cool. We use intercom for anyone listening, because property managers need some sort of support desk too. Dave, this sounds really neat. How could somebody demo this if they're curious to check out your software and how should they get in touch? Dave: Yeah. They can go to innago.com and they can request access to a free account. We’ll get in touch with them shortly after just to make sure they're a good fit, that we're going to solve some problems for them. We don't want them to waste any time fooling around on a platform that is really not going to work for them. If they request access, we’ll shortly be in touch, and we'll get them into the platform, and they can start playing around with it. Jason: Where does the name Innago come from? I'm a branding guy, I'm always curious. Explain Innago. Dave: We like to think of it as a strong three-syllable word, that's about the extent of it. It's really kind of like Google or Yahoo, there's not a whole lot behind it. Jason: Okay. Maybe we’ll have to make up the story sometime together about it. Dave: Yeah. We’ve thought about it, but we'll take any suggestions. Jason: When did you guys launch this? How new is this software? Dave: We launched the company in January of 2017. We had the product out in the market, kind of like an alpha stage really in March of that year. We've been coming along ever since. As far as a product, we're a little over two years now. Jason: Awesome. How many companies are using this right now? Dave: We have thousands of landlords on the platform and it's growing every day. I would nail that hard number, but it probably changes by the minute. Jason: Yeah. It's probably pretty tempting and pretty easy if it's free. I would imagine you guys will have some success and you guys are making enough money you think to stay healthy just through the transactions? Dave: Yeah. As you know, there's a lot of landlords out there. The majority of them are still self managed or not using any kind of software. There's a lot of tenants that want to pay online. Only about 30% of the market currently pays rent online. That's a huge giant blue ocean that’s ready to be captured. Jason: Yeah. There's a lot of blue ocean that are self managing. If you really want to super attract property management business owners, if you can figure out a way to help connect these self managers so that they can get that professional managers to take over stuff, and partner, maybe create some partners, I think you’ve got a winning affiliate business going on right there that’s good for your company. Dave: Absolutely. Jason: I know there's lots of people listening that would like to get connected to those that are self managing and work with them. Dave, super cool to have you on the show. I wish you lots of success. It would be cool to have you come back maybe in the future after you've come out with even more features if you’ve got something really cool to share. I wish you guys a lot of success with the free software. I've been talking about this for a while. I think it's long overdue. This is really great. Dave: Awesome. Thanks so much, Jason. I really appreciate it, my pleasure being on the show. Jason: Yeah, thanks for coming on. You heard it everybody, free property management software that is intuitive. If they are really intuitive, they're going to have a lot of natural success and growth, and if they're free, they're going to have a lot of growth. If they can make the numbers work which sounds like it would be pretty easy with all the transactions that are going to be occurring, it could be a game changer.  I think other property management software, they're a little bit greedy, and there's too much of that feature creep. I think this will be a competitor. It’d be interesting to watch. Let’s keep our eyes tuned, our eyes peeled and stay tuned to see what they do. Anyway, this is Jason Hull of the DoorGrow Show. If you are wanting to know if your property management website is leaking money because every website is probably leaking money. If you want to see that it’s leaking money because you don't want it to be leaking deals and leads anymore and you want to make more money and cash from your business, test your website out by going to doorgrow.com/quiz and take our DoorGrow Score Quiz that’s going to grade your website on how effective it is at creating conversions. Some of the questions are tricky. There's a lot of people taking the test and then make a bunch of changes to their website, some of them are false positive, so be careful if you're going to do that. Do that quiz and then maybe talk to our team and we can help you improve your website piece because I really don't believe that anybody's better at creating websites that make money than DoorGrow for property managers. Alright, we'll talk to all of you guys soon. Until next time, to our mutual growth.  

What Have You Changed Your Mind About? With Carol Lethaby, Dave Weller, Karin Xie, Matt Courtois, Paul Nation Simon Galloway - TranscriptTracy Yu: Hi, everyone.Ross Thorburn: Welcome to the podcast. This, as you probably noticed, is our third‑anniversary episode. To celebrate, we're doing a special long podcast, the longest one we've ever done. We've got six special guests for you, and all of them are going to answer the same question. That question is, "What have you changed your mind about?"Tracy: First, we've got Dave Weller and Simon Galloway. Dave currently works as an online diploma and TESOL tutor and blogs at barefootteflteacher.com. Simon runs his distance learning courses for teachers and managers. Both of them have been on our podcast multiple times before.Ross: The second up is Paul Nation, emeritus professor in the School of Linguistics and Applied Language Studies at Victoria University of Wellington, New Zealand. Paul's one of the most influential writers and researchers in vocabulary acquisition in the world. You'll have heard him before in our second‑anniversary episode about reading last year.Tracy: The third is Matt Courtois, who currently works as an academic director in a young learner language school, and Karin Xie, who works as an academic manager at Trinity College London in China. You might remember Karin from our previous episode about applying learning, and Matt from episodes about observations, minimalism, and also teaching writing.Ross: In the fourth segment, we'll hear from Carol Lethaby, who's a teacher, a teacher trainer, and materials writer based in the US and Mexico. You might remember Carol from our episode about neuroscience. You can learn more from her on her website, www.clethaby.com.Tracy: Finally, Ross and myself will talk about what we have changed our minds about over the years.Ross: Great. Enjoy the podcast, the longest one ever.David Weller & Simon GallowayRoss: Dave Weller, Simon Galloway, you've both been involved in English education for what, 12, 15 years?Dave Weller: It's 15 years for me.Simon Galloway: Same, pretty much.Ross: What have you changed your mind about? There must be one thing, Dave.[laughter]Dave: You're talking about since the beginning of my teaching?Ross: It could be at any point at all.Dave: The biggest thing I've changed my mind about since I began ‑‑ for myself, and for students, trainees, and everything ‑‑ is I used to think in quite a fixed mindset. I used to think, "Well, some teachers are good, some teachers aren't. And some students are smart and some students are not."The more I do this the more I realize what it's really about. Attitude and effort are going to be the things that make the difference. It's a bit of a cliché because I know everyone starts to think that way these days. Is it a bit of a...Ross: I don't know. I think that's still true to an extent, isn't it? I'm not sure. I ultimately do think in those terms that, for trainees for example. You find some at the beginning of the course, and you probably think these guys are the stars, the A‑People, the B‑People, and the C‑People.I almost think that fixed mindset, growth mindset is one of those things that I know as a fact but I'm not sure the extent to which I'd genuinely apply it or really believe in it deep down. Have you seen courses where people who you thought they were the weakest people at the beginning, ended up becoming the strongest at the end?Dave: I don't think the courses long enough for that, but there are definitely teachers that start at about that level and end about that level because they're not really trying to grow. There are other people that actually use the effort.I can see that through my distance learning courses, too. There are some people that start with a pretty bad first assignment and by the end, they're way up here. There are other people that just...Ross: I think of people on diplomas that we run. We, for example, observe them at the beginning before they got on the course. Some people that we thought, "They're not good enough to get on the course." There was a big kerfuffle. Eventually, they got on the course and they did really well.I've also seen the opposite of people that we said, "Yep you'll have no problems on this course," and the people go on to fail.Dave: Yeah, and I wonder if actually what we're saying to them is even affecting that. If we tell them, "You're going to do great," then that actually fosters a fixed mindset in them.Simon: It goes back to what we were saying earlier about praising the effort. If you tell someone, "You'll have no problem in this course" you, in a way, set them up to fail. Maybe they won't put the effort in as much because they think they're intrinsically or naturally intelligent enough or they're already at that skill level ‑‑ they won't need to put as much effort ‑‑ and they struggle.Dave: It certainly happens with some people.Ross: It's almost like there's an unspoken assumption that these people are going to put in X amount of effort. That's the bit that doesn't get said. "You'll be fine. You're going to do really well in this course."Dave: Assuming that you spend 10 hours a week?Ross: Yeah, but a lot of people don't know. Dave, let me guess. You didn't used to believe in learning styles but now you do?[laughter]Dave: No, actually. I think that when I was a new teacher, perhaps one year or two years in, I was always so certain of everything. On my original course, I took everything as gospel. I held my opinions so strongly, and I was so sure about everything. I knew I had a lot to learn, but what I did already know, I was certain that this is just the way things are.Since then, I've changed my mind and been exposed to new ideas, new evidence. I've changed everything so many times over the years. I can't remember who said it, it was something like, "You have strong ideas, held lightly," something like that. The longer I'm in this industry, the more I fully agree with that.I fully believe in what I do and how I do it, but if you show me some evidence or a compelling study, or show me a different way of doing things, I'll willingly change and try something new. That willingness to change, I guess that's [inaudible 06:13] . My willingness to change and to be shown to be wrong, I actually welcome now.Ross: That sounds like a perfect description of the Dunning‑Kruger effect. After your cert course, you believed a hundred percent in everything, like it was the gospel. The more you learned, the less confident you've become in those things.Do you think there's a problem then in how we present information to trainees on cert courses? I always find that maybe it's at diploma level that we maybe encourage people to think critically about the things that are being shown to them. The emphasis on introductory courses is, "Here's what you need to just be OK in the classroom and survive your first year."Maybe we're giving people false confidence. Maybe the more effective learner autonomy, long‑term strategy to teach people is, "I'm going to show you these things, these principles, but you also need to be able to question them."Simon: That goes back to something I've said before. You can take it to the wider education industry as a whole. In the language class, should we even be teaching language? Should we just be teaching skills and applying motivation? If you give someone the motivation to learn and the skills to be able to do so independently, then they're inevitably going to be able to learn a language.It's the same with any course, almost. I think the days of the tutor being gatekeeper to information are long gone with the advent of the Internet. Sure, a curated course is much easier to work through step‑by‑step because you can trust the authority of the source. It's broken down and spoon‑fed to you in a certain way.I do think that, in most courses that we run, there is that lack of teaching meta‑skills at the beginning or teaching to think critically. I think every course assumes that a course before has done that, even going back to initial education from 5 to 18. It's something, I think, missing in that, but that's a much larger issue.Dave: Yeah, we assume that everyone's got a degree or whatever, so they must know this. Then the university course, "They must have learned it before."[laughter]Dave: At secondary school, "They must have learned this at primary school."Simon: They thought, "Oh, parents must have...Dave: "The parents must have taught them that."[laughter]Simon: It might make a flip‑side argument. We're saying this from a position of 10, 15 years in the industry. As a new teacher, I can still vividly remember going, "Just tell me what to do next. I just want to get through my next lesson. I want to survive."I think it is a responsibility for initial teacher training courses to be able to provide that to teachers, so they can go into the class with the confidence that the learners will probably learn something. If you just give them a bunch of meta‑skills to work with, and then throw them into a highly pressured environment, they're going to fall to pieces. They need to have something to fall back on.Ross: Maybe there's an advantage of the Dunning‑Kruger effect. If you know almost nothing and you're really confident in it, that will overcome your lack of skill. If you're a new teacher and you said, "I'm telling you all these things, but maybe they're true. Maybe they're not."You maybe go into the classroom, and you wouldn't have the confidence to make up for your lack of skills. Maybe that Dunning‑Kruger effect, maybe there is some benefit to having that and believing in something even when you don't know much about it ‑‑ as a new teacher.Dave: It is to some extent, but every time, just keep on reminding the trainees that they can make their own...Simon: "This is the best way to do something. Or is it?[laughter]Dave: Just keep on pushing for deeper questions, like, "Was that effective in your lesson today? How do you know that? What real evidence were you going on? I saw the student do this. Why do you think that was? Do you think the same thing would work in another class?"Simon: What's the point of life? Why are you here?[laughter]Simon: Yes. Is anything even worth it?Ross: It's interesting. There must be a point where it would become counter‑productive and you just end up with...[crosstalk]Dave: Yeah, there's in so much doubt.Simon: No, it's true. Again, as a good trainer or a good manager, you should be able to spot when your teachers are ready, if they're not been challenged. When I was at [inaudible 10:14] you could see teachers that are ready to be pushed to the next level. People reach plateaus, and you could see when somebody goes, "Well I know everything now."Ross: That's a good point.Simon: "Actually, you don't. [laughs] Let me introduce you to some new ideas, like differentiation in the classroom or some of the higher‑level teaching skills." They go, "Oh wow! I had no idea you could do this." When their ability to implement what they know reaches what they know, then that's the time to give them more knowledge so they then turn that knowledge into skill.Dave: I like this idea of that plateau. If someone's already on like a slope, you don't want to stick them on a much steeper slope just for the sake of it.[crosstalk]Dave: ...just pick a Sisyphean boulder something. But if you're on a plateau already, you've got to get them on the slope.Ross: If you've had a trainee at the beginning of the course who's really struggling to give instructions, and you're like, "OK, here's a three‑step way of doing it," tell them in simple language, model it, and then ask questions.Dave: Show them, tell them, ask them, give them, Ross.Ross: Right, but then you wouldn't want to do afterward, "Well, when would that not be effective?" Do you know what I mean? You're just trying to get that person to that basic level.Simon: When you're observing them, you wouldn't want to sidle up to them and, "Sorry, um, you know that, according to Vygotsky, that's actually [inaudible 11:27] what you shouldn't have really done that there. This kid's ZPD is way off.[laughter]Ross: That might be too much.Paul Nation Ross: Hi, Paul. Welcome back. You published your first paper on language teaching in about 1970. You've had a very long career as well as a fascinating one. Can you tell us what's one thing that you've changed your mind about during your time from being a teacher all the way up to the present?Paul Nation: First of all, I like to think I always got it right from the beginning, [laughs] but I guess the main change that has occurred to me is the idea of the roles of the teacher and how the role of the teacher as a teacher becomes an important role but not the major role of the teacher.I say there's four or five roles of the teacher, and I always forget one of them. You know the number one role is the planner. The number two role is the organizer of activities and opportunities to learn. The third role's something like the trainer who trains the learners in strategies to learn, vocabulary and strategies to deal with the language learning.The fourth role would be the teacher as the tester who's giving learners feedback about their progress and showing them how much vocab they know and so on. The fifth role is the teacher as the teacher who actually gets up in front of the class or guides them through an intensive reading passage or something like that.I think that those roles are sort of ranked in the order of planner, organizer, trainer, tester, and teacher. That probably would be the major change I've come to during my reading of research, doing research, and so on. On the other hand, I also have to say that just about every PhD student I've had, and I've had a lot, have proved me wrong about the topic that they were working with.That's virtually without exception, sometimes proved me spectacularly wrong. I remember, for example, Teresa Chung doing research on technical vocabulary. I'd said in the first edition of "Learning Vocabulary in Another Language" that technical vocabulary probably made up about 5 percent of the running words in text.When she did her research, she found it made between 20 and 30 percent of the running words in the text, which is quite a bit different, one word out three compared to one word out of twenty. [laughs] That was sort of major changes, once people have done the research, to say, "Wow! I think I'm going to step back and change my ideas about that."I would say that the biggest one is the idea of you need a balanced approach to vocabulary learning and you need to see that teaching is a part of that, but only a part of it. You've got to make sure that the others are there. I would've given a much greater role to teaching very early on in my career.Matt Courtois Ross: Matt, what's something that you have changed your mind about, and why did you change your mind?Matt Courtois: What haven't I changed my mind about?[laughter]Matt: Looking back to my first year in Korea compared to now, I don't think there's a single belief that I still have that I had then. The biggest underlying thing that has changed in me was, at first when I was a teacher, I kind of thought the more knowledge I had about the language I could acquire, the better teacher I would become.I actually don't think that's really necessary. Being able to discuss any grammar point at the drop of the hat to me is not what makes a good teacher anymore. Having some of the skills to draw that from people, to run a good activity, and to facilitate improvement is much more essential to being a teacher than just knowing the subject matter.Ross: Can you remember when you changed your mind about that? Was it a long process?[crosstalk]Matt: It was a really long process. I taught in Korea and Russia, and probably my first year within China, I looked at teaching language in this way. Within my first year of teaching at my last company, there's a job opening for a content developer, content writer, something like that.I remember I took one of my favorite grammar skills lessons ‑‑ I think it was about the passive voice ‑‑ and I submitted it to the manager of this department. He sent me back an email that was three pages full of criticisms. The most positive things he said were basically about some of the animations that I had in my PPT...[laughter]Matt: ...not about the content of this deep analysis of the passive voice. He was just saying, "The method in what you're doing it, it's not about the grammar itself. It's how you present it," and stuff like this. I think I improved so much when that manager sent me such a critical feedback.I started approaching teaching grammar from, "What context am I going to use?" rather than having this giant scope of understanding the passive voice, every tense in English, rather than looking at myself as somebody who analyzes language. That's not my job.So many English teachers talk about how being prescriptive is so bad, but they're teachers. That's what they're doing. They're not writing dictionaries. They're not contributing to the corpus. We're not describing the language here. We're taking what those guys have and then presenting it to students in a way that they can practice it.Once I got over that mindset that, "I'm holding the key to the language, and I'm the person who's defining the language," and said, "No, I'm coming up with situations and facilitating situations in which they can use it," I think I improved a lot as a teacher and a trainer.Karin XieKarin: Teachers used to just think, "Well, my English is good, so I can teach English," or "I'm not confident in teaching English because I'm not confident in my English." Language awareness, like your knowledge in phonology, lexis, and grammar, they are important and are very helpful. It's just the teaching skills, they are very important, and they should be emphasized more.Ross: You need both, don't you?Karin: Yeah.Ross: If you don't know any English and you're the best teacher in the world, you can't teach English. Equally, if you're amazing in English and you can't teach at all, that's not going to work, either. You need a bit of both. At some point, especially for lower levels, the knowledge of English becomes less important than the skill to put it across.Karin: Because I was trained in the CertTESOL, DipTESOL way, I always believed that I need to build the classes around the learners, and I need to train teachers a reflective coaching way. I believed that was more effective than any other ways.Recently, I just come to realize that not necessarily, and use that as good challenge or good chance for me to try out different things, or give people different options and see how things goes. It's not one way better than the others. It's just there are different ways of doing things.Ross: This is one of the dangers of just working in one environment for a very long time. You're often only exposed to one way of doing things. You get transposed to another place, and you automatically just assume, "Well this isn't the right way to do things. This is wrong. This isn't the most effective." But is that true? Is there any evidence?Karin: Exactly. I think all the things that I've tried out shaped how I do training and classes now. They're definitely not the same as when I was in the old environment for such a long time.Carol Lethaby Tracy: Hi CarolRoss: Hi Carol. I think you're very well known for integrating ideas from research into your practice. We'd love to hear from you about what was one of the most important or the most interesting things that you've changed your mind about over the years.Carol Lethaby: I think the example that came to mind here certainly was not using the mother tongue in the classroom. I did my PGCE in the UK in learning to teach French and German. This was mid‑'80s, and the communicative approach in foreign language teaching then had a big hold on the profession.We were explicitly taught not to use English at all when we were teaching French or teaching German. Of course, I carried this on when I started teaching English. I did my Delta and the same thing, it came up all along the way. I remember it seemed to go against my intuition, but as I know now, don't always rely on your intuitions, because they might not be right.I actually did some research into this as a part of my master's degree here in Mexico and found out that, when you ask learners, one of the things I asked them in a piece of research I did, was, "Do you want your teacher to have English as their first language? Do you want your teacher to be a native speaker of English?" a list of pedigrees.The one that came out top at all levels, especially at beginner level, was they don't care if their teacher is a native speaker. They want a teacher who can speak their first language, who knows their first language.It made me think about, "Why then are we telling people you don't need to speak the learners' first language, you don't need to know the learners' first language, and you don't use the learners' first language. It's better not to"? Obviously, I was reading the history of English language teaching, Phillipson's Linguistic Imperialism.You realize how this happened and how this idea was transmitted and perpetuated. Now, knowing more about the brain and how we learn, I really don't believe that. I am convinced that we need to use the learner's first language in order to teach them another language.Ross: How would that look like in the classroom then, Carol? Do you have any examples of what that might look like with a group of students?Carol: I remember trying to teach the difference between first and second conditionals when I was teaching the younger Mexicans in Guadalajara here. There was this explanation that I was trying to work with them with levels of probability. It depended if you were an optimist or a pessimist whether you would use the first conditional or the second conditional.How confusing that was and how unsatisfactory that was for a learner, I'm sure. Now I would just tell those learners, "This is how you say it. The first conditional corresponds to this in Spanish and the second conditional corresponds to this in Spanish."Spending ages trying to define a word or an expression when just a quick translation could really help in that case, using the learners' language for effective reasons.I remember I didn't speak a word of Spanish when I first arrived here. I was given beginner's classes precisely because it was the idea that this would be a genuine communication situation, etc. I couldn't get to know my students.It means I couldn't ask them, "How are things going? How are you getting on in these certain situations?" Or, "What things are worrying you about learning English? Don't worry about this [inaudible 23:43] . It just means this. I can help you with this later."All these kinds of things that really enhanced language learning, I wasn't able to do because the idea was that we couldn't speak each other's language and only think in monolingual situations. It's just ridiculous not to take into account and use the learner's mother tongue.Ross Thorburn & Tracy Yu Ross: We heard there from a bunch of our favorite guests over the last couple of years about things that they have changed their minds about. Tracy, to finish the podcast, what have you changed your mind about?Tracy: There are a lot of things I have changed over the last few years. One thing is how I can connect on education‑related either theories or practice and into what I'm doing, my work in context. In the past, I remember when I started being a trainer, I read a lot of books about teaching, training, and theories in ESL, TESL, exactly related to this industry.Then, I realized maybe I just focused too specific to this industry, to this area. When I listened to podcasts and watch TV, or read other books, magazines, or journals, sometimes I realize that actually something that relates to this industry could really help what I'm doing. I need to give you an example, right?Ross: Give us an example, yeah.Tracy: I read a book about how marriage works. The book is "The Seven Principles for Making Marriage Work." When I started reading this book, I didn't expect any connection to work, but the more I read about it, I realize actually there were a lot of principles [laughs] can apply to work, to manage a team.For example, there's one thing mentioned about criticism versus complaint. You can see the difference between these two. You can say...Ross: What's the difference? Do you want to give us an example of each?Tracy: A complaint, you can say, "Oh, you didn't do this very well," or "You didn't complete this on time," for example, at work. Criticism, it's like, "Oh, you always did this this way. You're not able to do this," something like that.Ross: It sounds like more you're talking about the person rather than the actions that they've taken or not taken.Tracy: Yeah. Of course, people can complain. You can give constructive feedback to the other person. You can talk about the facts, you can talk about the behavior, but you don't jump into conclusion and say, "Oh, this person is not able to," or "This is always like this." You're not giving the person another chance to reflect and then to make things better.When you're working with colleagues or you're managing a team, it's really important to distinguish the difference between a complaint and a criticism. Another thing is super, super useful, when I had a difficult conversation or tried to give feedback to our staff, just try not to have a harsh start‑up when you're having a conversation.Even though before you start a conversation, you knew it's probably towards some kind of a conflict or uncomfortable situation, still try to avoid a harsh start‑up in a conversation. Maybe you want to ask this person how they feel, what's going on, and what happened, and find out more information.Then provide more specific information to the person. Then give the feedback and then action plan, rather than at the beginning is said something very negative. It's difficult for the person to receive your feedback.For you, Ross, you work in different roles for the last 12, 13 years. You were a civil engineer, and then you work in education. Anything that you've changed over the last few years?Ross: Something I'm in the process of changing my mind about is a lot of the things that we talk about here and we do on teacher training courses in materials design and management is we concentrate so much on what goes on in the classroom as that's where the learning and everything takes place. That's fundamentally the most important thing.I used to believe that, but I'm coming to believe more that what happens in the classroom might not be the most important part of their learning process. What might actually be more important is what happens before the class and what happens after the class.I found a nice quote yesterday from someone called Ausubel, hope I'm pronouncing that correctly. He says, "If I were to block out and reduce all of education's psychology to just one principle, I would say this. The most important single factor influencing learning is what the learner already knows. Ascertain this and teach them accordingly."That was really cool. How much time do we ever spend actually finding out what students already know? I would guess, generally, not very much time or not a lot of time. Certainly, on this podcast, we don't talk about that very much.I think the same thing for what happens after class. We tend to assume that things finish once the students walk out the door. We know from memory curves and things, if students don't revise what they've already learned, then they forget the vast majority of things that happen in classroom.That's something I've changed my mind about. I think we need to spend more time focusing on what happens outside the classroom every bit as much, if not more, compared to what happens inside the classroom.Tracy: How can you do that then, to find out more information before the class about the students?Ross: I don't have all the answers to it, but I think it's more important that we think, like ascertaining what students already know before lessons, finding out what problems do they have, and designing our lessons to try and solve specific issues that students have.What normally what happens is students get placed in a certain level. Then they just work through a course book, which roughly approximates what they know and what they don't know.We don't go into enough effort to find out what are the holes and the gaps, or the peaks and the troughs, in students' current ability and knowledge, and try and smooth over the troughs, to make sure what we're doing in class fills those in.Tracy: Have you ever seen any examples or some teachers who were able to focus on what happened before the class or after the class?Ross: Some things, like the whole flipped classroom principle, goes towards that. Some educational technology works towards aiming to find out what students know before the class. It has them answering questions and makes sure that they reach a level of mastery before they move on to the next topic.I don't think that's the norm in most scenarios. It's something that we don't talk about enough, and I think those things are every bit is important probably as what goes on in the classroom and deserve our attention a lot.Everyone, I hope that was interesting. I presume for a lot of people that the reason that you're listening to this podcast in the first place is so that we can change your minds about some issues that are important. Hopefully, it was useful hearing how some of our favorite guests have changed their minds about different things over the years.Tracy: Thanks very much for listening.Ross: For the last three years, thank you. Good‑bye.Tracy: Bye.

In the United States, millions of residential properties are owned and rented out by individual landlords, not professional property managers. Why not protect yourself from painful experiences with tenants, have peace of mind, and leave it to the professionals? Today, I am talking to Dave Holt of SureVestor, which provides Scheer Landlord Protection. This insurance plan financially protects landlords and property managers from tenant-related risks. SureVestor is at the forefront of leading a trend that can significantly help grow the industry. You’ll Learn... [01:45] Passion for Property Management: Dave joined NARPM nearly 30 years ago and has gone through its entire chain of command. [02:51] Reasons why Scheer Landlord Protection was brought to America: Significant growth impact on property management industry in Australia Way to make, but not lose money Opportunity to turn self-managed landlords into professional property managers [05:22] Is the United States ready for similar level of growth? Whether companies grow exponentially, or at their own pace, insurance can help them get there. [07:06] Can't control what happens in people's lives; when bad things happen to good tenants, property managers experience frustration and stress. [08:05] Who’s to blame? Things happen that create a financial burden; Scheer Landlord Protection covers income loss for landlords and property managers. [09:32] Malicious Damage by Tenants: Insurance covers holes in walls, cabinets ripped off walls, sand poured down drains, etc. [09:47] Blanket of Coverage: Indirect and direct benefits create safety for all parties. [13:45] Property manager requirement helps insurance company mitigate risk. [16:33] Competition: Focusing on criteria of quantity over quality. Most property managers don’t have an insurance license; be compliant and legal to protect industry. [22:40] Tiered Pricing: Clients know the cost to be protected. [24:58] FAQs: How do I market this to my owners? How can I implement it? Follow SureVestor’s steps to success. Tweetables Scheer Landlord Protection: Grow exponentially, or at your own pace. When bad things happen to good tenants, property managers get stressed out. For most landlords, rental property is their most expensive investment. Scheer Landlord Protection: Covers malicious damage, eviction costs, and loss of rent. Resources SureVestor Dave Holt’s Email Dave Holt’s Phone Number: 612-465-0421 SureVestor’s Blog National Association of Residential Property Managers (NARPM) California NARPM Terri Scheer Lloyd's of London The Iceberg Report U.S. Department of Housing and Urban Development (HUD) DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz   Transcript Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. I have a guest today named Dave Holt. Dave is here talking with me about landlord protection insurance from SureVestor. Dave, welcome to the show. Dave: Thanks, Jason. I appreciate it. Jason: I just got to see you at CALNARPM in your British soldier outfit that you had there. I want to connect with you a little bit here. Give us a little bit about background on how you got into this industry and into this space. Dave: Yeah, you bet. I've been in property management, that's really my industry. I've been in the business for over 30 years. I started managing for HUD back in the mid-80s, got introduced to property management in single-family homes, and started my fee management company in the late ‘80s. That's where I ran into a fledgling organization that was just starting out called NARPM. I got involved with NARPM early on. I actually started in 1990. I've been a member ever since and gone through the whole chain of command there. Property management is my passion. Throughout that whole process, I've met with thousands of property managers throughout the years. Like you, Jason, always looking to see how we can improve the industry and came across an opportunity. We're actually teaching over Australia. Both my partners, Kevin Knight and Todd Breen, had taught over there. We came across a product that was over Australia and had been there for 25 years. We're wondering, "Why isn't that here in the US?" Actually, long story short, joint ventured with the creator of the product from Australia, Terri Scheer, it still sells under her name over there, Terri Scheer insurance. She has since sold her business over there. Now, has joined forces with us to bring the product here to the US. Jason: Awesome. My understanding of that is that this product has significant impact on the growth of industry as a whole in Australia. Dave: Yeah, that's very true, that's one of the reasons why we wanted to bring it here, it's not just something, "Hey, here's something that we can make money doing," that really wasn't the crux of what we bought it here for, and you hit it on the head. What we look at in our industry here in the US, it's 15 times the size of Australia. When you look at the number of properties that are owned here by individual landlords, it's over 15 million single-family homes that are actually owned and rented out, a small fraction of those is handled professionally by us professional property managers. If we have an opportunity to bring a product here that can help drawing those self-managed landlords to us as professional property managers, that's what we're looking to do. Over in Australia, that actually happened. About 15%, increased in the business for professional property managers because the beauty of this product is that it's only available for landlords that are professionally managed and we did that intentionally, we did that over in Australia as well. Those self-managed landlords have to come to us as professionals in order to get this product. Hence, we're looking to be increasing the number of properties that are managed by us, professionals. Jason: Now, I have heard stats thrown around like the property management industry in Australia grew about 25% in a single decade. I don't know if that's accurate, but that sounds pretty incredible. I also have heard that they have about 80% of single-family residential is professionally managed. Dave: That's right. Jason: Here in the US, according to the [...] report, we're at about 30%. If the industry here could grow in a decade to maybe about 25%, that would mean that we would pretty much double in size. I don't think there are enough management companies in the US right now that can handle that level of growth. That would mean we either need to double the amount of companies that exist now—that's a lot—or each company would need to double in size. I think that would be incredibly painful for most business owners. Dave: Maybe, maybe not. Obviously, your DoorGrow hackers are looking to be growing that's why they're part of your endeavor. It's not that they have to grow exponentially, but they can grow at their own pace. Certainly, it's something that, if they can use the insurance to help them get there, that's what we're all about, and looking to help them do. Yes, we saw it happen over Australia, we don't see why we can't replicate that here. Jason: Let's break this down, and help people understand. Maybe we start from the point of, how do you sell this product, but let's first talk clearly of what is it. What is SureVestor? What is this insurance product? Then I would love to get into basically talking about what's in it for the homeowner? How do you sell this to them? We get into those two things, and then I think the light bulbs will start to go on, and they can start to see how this can be a facilitator of growth here in the US. Dave: You bet. It's probably better to start from my experience as a property manager. Obviously, we're all property managers. Really, the frustrations that we've experienced, as property managers over the years, is when bad things happen to our good tenants is really the situation. It's very stressful. We know that we do a professional job of screening our tenants and getting the best quality tenants for our landlords, but we can't control what happens in people's lives, whether it's a job loss, a divorce, a death in the family—things that can happen in someone's lives that create a situation of financial burden. Now, all of a sudden, if they're renting a property, they may be more inclined to skip or stay there, and not pay the rent, and now, we have to evict them as professionals. It's very painful. For a lot of us in the single-family space, those owners owned one property. If something bad happens to their tenants, and now all of a sudden they're out of three months of rent because of it, that's a lot of their income. A lot of them say, "You know what, this isn't for me." They decide to sell or worst, they blame us as the property manager because we're the ones who screen the tenants, and they say, "It's your fault that this happened. I'm going to somebody else." In either case, we've lost the business. If we had a product, which we do now, through SureVestor and sure landlord protection insurance, that covers the loss of rent for those type of things; a tenant skips, they have to be evicted, they are victims of violence—we've had that happen as well—or there's a death of a sole tenant, or murder, or suicide. I've experienced all of those over the 30 plus years of business. That rent then is not paid, and our landlord is out of money. Us, as property managers, most of us are charging our management fee based on the rents collected, and if that rent isn't collected, we're not getting paid either. This insurance covers all that. It covers it for the landlord. It covers it for the property managers as well. Then, there are some additional benefits. Malicious damage caused by the tenants, that's something that we've experienced as well. They punched holes in the walls, ripped cabinets off the walls, they pour sand on the drains, things that are malicious, there's coverage for that. There's coverage for theft and damage due to theft. There's the eviction fees and legal offense if the tenant brings it to trial. There's the covering of the sheriff cost if you have to get a writ and go through that whole process. We even have lockbox coverage for a digital lockbox. For property managers who are now doing self-showings, many times, they get some pushback from their landlord clients about doing that because of, "Well, what happens if." Now, there's some coverage for that as well and then, rekeying of the locks after those covered events happen. It's a way where we can, with the insurance, make that landlord whole and also make us whole as property managers. One other thing too, a lot of us as property managers are guaranteeing our tenants for some period of time. If something does happen to that tenant and they breach the lease, we will re-lease the property for nothing, for no charge, for our landlord. Now, when you have insurance that covers the loss of rent, the malicious damage, the eviction cost, and those types of things, you now have the security deposit available to cover your re-leasing fees among other things. Jason: There could be divorce, job loss, death of a family, violence, malicious damage, malicious damage theft. Then things like, eviction fees, legal fees, writ fees, lockbox coverage, rekeying after theft. It really creates this safety for all parties involved. Dave: Absolutely. When you think about it, for most of our landlord clients, their rental property is the most expensive investment they have. They get dwelling coverage because that's all they know. They get dwelling coverage to cover the catastrophe-type of damage, the fires, and things that can happen to the property. The things that happen more frequently are the things that we're covering—the loss of rent because a tenant skips, they maliciously damage the property and the other things that we went through. Why wouldn’t they get coverage to give them that peace of mind, so when those things happen to their tenant, now, they're protected as well? It gives them an overall blanket of coverage, that gives them that peace of mind so now, they can rent their property with confidence, and hopefully, stay with us as property managers longer because they don't have to have that fear of, "What if?" Because now they're going to have coverage for that. Hopefully, draw in more landlord clients that might have that fear. Some of them decide, they just want to sell to begin with because they go, "You know what? I can't afford a loss. I can't afford one of those situations that happen, and now I'm out of rent, and I've got a mortgage to pay." It's a way where we can keep new owners and a way where we can attract new owners as well to us. Jason: Yeah. Creating this blanket of coverage sounds really significant and important. If it's not there, then even having a rental property investment can be a risk. Maybe it's a risk that a lot of property owners are either ignoring or aren't aware of if they're actually involved in real estate investing. There's a lot of self-managing homeowners that are like, "Oh, it's easy. I just need a tenant." Famous last words. Then they start running into problems, but even for property management business owners, you don't want to be the fall guy or gal for those problems when they happen, you want your business to be healthy. Since this is so important, to have this blanket of coverage, as you call it, and it has such an impact in Australia, is this something that only property managers have access to, why don't people just go and get these policies directly and self-manage, how's this driving people towards property managers? Dave: We have purposely set it up where individual landlords have to go through a professional property manager to get this coverage. If a landlord goes on to our page and looks at the, "For landlords," it actually, guides them through the process and says, "Do you have a professional property manager?" If they don't, we actually find one for them. One of our property managers at SureVestor and we refer them to them and get them new business that way, as well. Jason: The requirement of them to have a property manager probably also helps the insurance company mitigate their own risk. Dave: You got it. Absolutely. Over in Australia, it's been around for 25 plus years. Now, it's open to individual landlords over there now because it's a more mature product. Starting out, our underwriters wanted to kind of mimic the initial process that Australia took, which was making it available only for landlords that were professionally managed, that's something that really resonated with us, not just because of the underwriting of it, but more so, to help bring in the self-managed landlords to us, as professionals, and help us grow our businesses. Jason: Alright. I'm going to give you an opportunity to throw stones at the competition a little bit. The competition is anything that people might perceive as something similar or reason not to use something like SureVestor. Are there competitors that just go direct or don't have that sort of stipulation that you have to use a property manager, and have some sort of insurance-like product? Dave: Yeah. I'm not aware of it. There are some startups that are happening now. Obviously, when something’s out in the cosmos, we're not the only ones thinking about it, there are certainly other companies out there that are starting, I know a couple of them. I'm not necessarily sure that they're going direct to the landlord or not, one might be, but that's just because my thinking would be, "They don't see the risk." But we know our business, and we’re property managers-first, and so we want to be helping our colleagues grow. One of the ways to do it is to make it only available for landlords that are professionally managed. We know that we do things professionally. A lot of self-managed landlords, they don't follow the same criteria. Some of them do, but a lot of them just do the, "You look good," the feel test. Say, "Oh, yeah. He seemed like a really nice person. Go ahead and rent my property." Then they find out it's not so safe after all. We decided not to do that. We wanted to have it available just for the landlords that are professionally managed. I can't comment on any competition that's doing it, why they do that, other than, they just want to try to get as many as they can, they're focused on the numbers. That's not our intent. Our intent first is to provide a great product to our property management colleagues that can help them retain landlord clients, and help them bring out new ones. Jason: Right. I would imagine that since you've got these different parties involved, you've got property manager, you've got renter, you've got homeowner, and then anybody else could get into the mix in any of the drama that ensues with all of these—this really reduces the risk for all parties. I imagine there's products out there that look similar on the surface, but somebody's getting the short end of the stick, I think that would be dangerous. Regardless of who that is, it's going to end up as a problem for everybody. It makes sense that you guys are doing it right, focusing on making sure that this, really is, the best option for everybody involved and that a professional manager is involved in this process. That's exactly right. We have vetted this thing over three-and-a-half years. It started from the foundation and make sure that we had everything in place to make sure that our industry is covered, and we're providing the best quality to our landlord clients. That takes a lot of work getting that together that's why we have the world-renowned, Terri Scheer, started this. This whole thing. I mean, every single company has mimicked what she's doing, if there are any copycats around because she was the first. We have Lloyd's of London as our underwriters. The first and the largest insuring entity syndicates in the world covering this type of thing. It gives us more security and backing for our landlord clients and our property managers. The thing that property managers, when they're looking out what other competition there is out there, they've got to be really careful when people are saying, "Hey, you can monetize this, you can make money as a new revenue stream," and so forth. Most property managers are not licensed in insurance. In insurance, similar to our property management industry, is very heavily regulated. If you're doing things that look and sound like insurance, for example, you have certain programs whether it's guarantees or other types of protection programs that you're making money off of, that can be construed as selling insurance. If you don't have a license that can be an issue. Everything that we're putting together is legal. The ways that we're making this available for landlord clients, and for property managers, and even starting to create processes where they can benefit better from it, that's what we're all about—to make sure we're protecting our industry. Jason: Yeah. This is a common thing. A lot of property managers, especially the more entrepreneurial ones, get really creative, and they're thinking, "Man, I got this great idea for this new gimmick or this new thing. I can sell this guarantee, this warranty, this protection." It's almost like insurance. It works almost like insurance. There are some significant red flags that they could be putting themselves into some serious legal liability. Dave: That's exactly right. Jason: They're basically, doing insurance without a license. You need to be careful. You guys help them do it the right way. Now, you had mentioned, they're doing it to generate revenue. Now with your service, property managers can make some money too, right, they're not just lowering risk? Dave: When we're saying making money, the benefits are more indirect than direct. For example, as I mentioned, when the rent isn't paid, the management isn't getting their management fee. When the insurance is covering the rent, now the rent is paid because of the insurance, the property manager collects their management fee. Yes, that's a direct benefit, that's income to them. Most of the property managers have some sort of guarantee for the tenants, as I mentioned. When something bad happens, and they have to re-lease the property, that's a lot of out of pocket for them. Now, when the insurance is covering that loss of rent, that deposit doesn't have to go those things which it typically, does. Now, you have that deposit available to pay the re-leasing fee that the tenant would otherwise owe you as a property manager. You're making money indirectly through that. Here's another idea, Jason, that a lot of property managers, including myself, we'd gone to tiered pricing. What tiered pricing is that you have different levels of pricing for your landlord clients. Usually, your first tier is leasing-only, your middle tier is your traditional management, so it's an a la carte, you're paying for whatever service you get, your management fees, your lease fees, your inspection, your evictions—all that stuff is an additional cost. Then you have your top tier and the top tier is an all-inclusive or mostly inclusive, type of tier. You can charge more for that tier. What property managers are doing is they're paying for the insurance in their top tier, and so it makes that top tier more valuable in the eyes of, obviously, of the landlord client. That landlord goes, "Well, I mean, I can pay this amount and know what all of my costs are. I can get the insurance to cover in the event of a bad thing happening to my tenant." That's a more predictable result for an investor. They know that cost, they know that they have the protection, and that gives them that peace of mind. That's a process that a lot of property managers are going to. In the top tier, even though you can't upcharge the insurance, you can charge higher to be including all of your charges, all of your fees, into one. Jason: Got it. They fold it into that. Makes sense. In that situation then it becomes an additional value add that allows them to sell their services at a higher price point. Dave: You bet. The insurance help do that and they make more money, you bet. Jason: There you go. Alright, awesome. Dave: Lastly, we are in the process of creating a way where we can legally compensate the property managers. It's something that they're not prepared at this point, to go through in detail, but I would welcome property managers to contact me. I'm more than happy to go through that process with them. Jason: Cool. Okay, great. What are some of the most common questions that you're getting from people that are maybe skeptical or concerned? What are some of the initial questions that property managers might ask about this? Dave: The first is, “How do I market this to my owners? What do I do?” Obviously, we got two parts of that: we have our current owners, and then we have new owners. What we have done is put together the steps to help them with their current owners, for one, and help them bring in new owners. As property managers ourselves, we know we're very busy. We have a hard time implementing things because we are very busy. We get sucked into the day-to-day grind of property management. It's probably what's happening right now. It's the last day of the month. Most property managers are out there doing their move out inspections, move-ins, and doing all that kind of stuff, they're busy. Trying to implement a new thing is always a challenge. We know that because we're property managers too. We've created those steps to help them do it. We've done it for them. We have all the email templates that they send to their current clients, for example. We have the schedule all laid out so that they can just send them out. We have what's called an opt-in, opt-out form. The beauty of that is it gives them a tool—a risk management tool—to use where they can send that out in the email. Just like here, "I'm opting in," and this is for the owner, their landlord client. "I'm opting into this coverage, and this is what I want." It's directing to the property manager, or it's saying, "No. I'm not interested at this time." Now, the property manager has a form. Six months later, when their tenant has to be evicted, and they've opted out with that coverage, if that landlord is coming to the property manager complaining about it, they can say, "We did our duty of care. We told you about this insurance. You opted out of it, don't blame me." We have that. We also have the disclosures and opt-ins that they use in their management agreement. Personally, even if my BDM, my Business Development Manager, who's talking to brand-new owners hasn't mentioned anything about the insurance, they see it in my management agreement. It's already laid out, and we have that addendum of it available for them and their management agreements. That's part of it. The next part is the whole part of bringing on and using it as a point of difference for their new clients. We have scripts that they can use to help in that initial conversation. Again, we have the information that they can use in their property management agreement both—if they're just doing regular pricing, and if they're doing tiered pricing—so we have both. Then we have the marketing information that they can embed, and put on their website with video clips and so forth. We've done all of that for them, so they don't have to recreate it. Our last step is on all implementation. We walk them through the steps of implementing it all. It's really quite simple. A lot of the marketing too, we have what we call a WDIFY, we-do-it-for-you process, and we can even help them do a lot of that marketing as well. Many of your DoorGrow hackers may recall Darren Hunter and Deniz Yusuf because they were at your event just last year. They have put together, since they know this insurance intimately, both of them being from Australia, they have helped put together a whole orientation for BDMs on how to be better at utilizing, not just the insurance, but utilizing tools to help draw new accounts to them. We have that on our site, on our blog site. It's a whole 45 minutes of them going through with their best practices and how to utilize the insurance as that point of difference to draw in new business for them. Jason: Cool. Dave: There are just a lot of tools that we have to make it simple for the property managers because again, we know it's challenging for them to get things implemented. Jason: The number one challenge in any new software, or any new system, or any new tool, is adoption. It sounds like you guys really helped lubricate that process, make it smooth, and make it easy. That's one of the biggest challenges, or complaints when people get into some new system or some new tool or service is, they just don't have the level of support that they need. That's one of the biggest challenges. It sounds like you guys really put a lot of energy and effort into making sure that they have what they need in order to succeed. I mean, the first challenge, making sure they've got the right vehicle, it sounds like—with the backing of Lloyd’s as an underwriter and everything—this is like the premier vehicle for this. Then the next question that a business owner would have is, "Well, can I do it? Is this possible?" It sounds like you've got the support, the tools, and the resources that they need. The last concern that people might have is what about external factors? What about the market? Could this go away? Could the government impact us? These sort of things. Are there any potential challenges there? It sounds like you guys have dealt with this stuff to make sure everything's compliant and legal. Dave: There's really no concern there. We just expect that to become more commonplace like it has been over in Australia. For those in your group that aren't familiar with Australia, we consider it almost advanced in property management. I say that because they are even more heavily regulated than we are, it just draws to making them more professional, and so they've got to do things to protect themselves and protect their owners. They're always thinking of new ways. Hence, why this insurance started 25 years ago or so. In a government, in a country that is very highly regulated, it's done nothing but expand. Over here, I don't see it going away. I see it expanding. I see it becoming more commonplace, especially as we're seeing after the global financial crisis, more and more, not just individual investors, but huge hedge funds coming in and buying real estate. Rental property, compared to homeownership, is increasing. As that continues to be the trend, more and more investors and landlords, in general, are going to want to protect themselves, and protect their investment because as I mentioned, it's the most expensive investment that a lot of them have, they want that peace of mind, they want more consistency, and predictability. When you have an insurance product like this, that they can get for as little as $1 a day, I mean, come on, it's a no brainer. We really think that this will become more commonplace. It's already in the insurance industry that's very highly regulated. The things that we go through as far as auditing and making sure that everything's done right is a continual process. We have vetted this to make sure that it is done right and protecting our landlords and protecting our property management colleagues. Jason: Love it. Most of the vendors that we handed out awards to for our DoorGrow Awards for 2018 were because they were the best in class, they were the leaders in a competitive space, that they'd gotten the most attention inside of our DoorGrow Club Facebook Group, they consistently were seen as a leader. We gave SureVestor an award, and it was for this reason because I do see this could be a game changer for the industry. We gave SureVestor, for 2018, the Game Changer Award, was what we called that award. I think, really, SureVestor's at the forefront leading a trend and a movement that I think is going to be happening here in the US, that I think can significantly help the industry, and help grow it, and help lower the risk of investors, and help bring people to the property management space. Property managers lower risk and SureVestor helps lower risk, I think combined, it really can give the property management a much better name here in the US, where people, having managed their biggest asset or investment ever—or whatever you want to call it—that they might ever be dealing with, and keep that risk low. Dave, great to have you on the show. I appreciate you coming on and sharing this. How can people get in touch with SureVestor? What's the next step for people that are listening or watching this later that are interested in finding it out more? Dave: You bet. Thank you. They can go to our website, real simple, surevestor.com. They can contact me as well, daveholt@surevestor.com or they can call me 612-465-0421. Happy to walk them through, happy to guide them through the process, and answer any questions they have. We're just looking to provide a great product to our industry. We really appreciate what you're doing as well, Jason. We think DoorGrow is really on the number. We're happy to support it anyway we can. Jason: Awesome. I appreciate it. Always fun for me to connect with other vendors and other people in the space that have a similar vision and mission for the industry, of helping it grow. Let's change it together. I appreciate you coming on, Dave. Thank you so much. I will let you go. Dave: Alright. Thanks again. Jason: That was surevestor.com. They don't pay me anything. I just think it's exciting. People probably wonder sometimes. Anyway, check them out. If you are not inside of our Facebook group, you're probably missing out on the best tools and the vendors. You're probably missing out on some great fee ideas. You're probably also not super connected to DoorGrow. We would love to help facilitate the growth in your business. I would love to be your coach. I would love to be your consultant to help you do what I've helped lots and lots of clients do which is, add easily, 100 extra doors to your business. If that sounds interesting to you, make sure you reach out to us at doorgrow.com and get inside our community, our Facebook group, community connected to this. Become a DoorGrow hacker. That is by going to doorgrowclub.com and you can join us there. Until next time, everybody, to our mutual growth. Bye, everyone. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn, and start DoorGrow hacking your business and your life.

Find Lesson Planning for Language TeachersPrinciples of Task Design (With Dave Weller) - TranscriptionRoss Thorburn: Welcome back to the podcast, everyone. Today, our favorite guest is with us, Dave Weller.Dave Weller: Hurrah!Ross: [laughs] Today, Dave and I are going to talk a bit about Task Design. Before we jump into that, why is Task Design useful or important, or worth thinking about?Dave: Good question. Mainly because when we first become teachers or, at least, I know when I did, I just ran with whatever activities were suggested to me, or games that other teachers have worked very well to get the students engaged and motivated.It was only later [laughs] that I started to question, "Hang on, are my students actually learning anything?" Then shamefully, I didn't think about that soon enough.Dave: That's when you start to realize that, is what I'm doing actually helping the learners, or is it just using time. That's where Task Design pops up, and I think, "OK, the way I run my activity, the way I've structured my activity, it can make a huge difference to what students think about, the language they use, and the practice they get."Ross: There's also maybe something about evaluating what you're already doing there, isn't there? That first step that you mentioned maybe is looking at, "What am I doing now? How good is it?" Maybe before I start designing anything else.Today, we're going to run through Dave's six top tips for ways to design tasks. We're going to look at aims, gaps, load, materials, thinking, and rehearsal. Tell us the first tip tasks should support aims.Dave: When you think about the task, think about what language is it likely to get students to produce. Is that the same as your target language? Often, especially if you're just looking for an activity or a game to fill time, you start running that activity, and the language that comes out of the student's mouth is very different.I'm using different grammar, different lexis, different from maybe that you were expecting. Sure, that is practice, but it might be something they already know really well. They default to something that they are confident using. It's not pushing to use things they're not comfortable with. Therefore, growing or getting better at the language doesn't really happen.Ross: I think as well this, it's maybe when you're lesson planning, it can also be worth thinking about changing your aim to reflect the task as opposed to just changing the task to reflect the aim. A lot of people maybe tend to start off with the aim and work forward from that. It's like forward planning, whereas, something I sometimes encourage people to do is reverse planning.Starting at the end of the class, what's a great task that you think is going to be useful for the students, and then trying to make sure that your aim, and everything you teach matches the task.Dave: If you have the luxury of doing that, that's almost the best way to do, but it depends where you're working and the context you're in. Some schools are quite strict about the syllabus they're using, or the course book you have to follow. You have to tick off certain grammar points or sets of vocabulary.If you would just let me free a context where maybe a class works, just like an English corner, then, sure, coming up with an activity you know will work well for that group and working backwards from that is freer.Ross: Again, maybe as well with that aim, it's easier practically to add things to it than to take things away from it. You're probably less likely to get a complaint if you've taught an extra few things that have gone beyond what's in the syllabus. The issue is usually when you cut things from it.Dave: Yes, totally.Ross: The next step is tasks need a gap. What's a gap, for those unfamiliar?Dave: [laughs] It doesn't mean you just stop half‑way through, and you freeze.[laughter]Dave: If there's no input for five minutes at all, you just have to take your little nap.[laughter]Ross: It's the same as a break.Dave: Yeah, I wish. Now, surprisingly, I don't see much written about this. There's an author, Prabhu, and he mentioned that in any type of communication, there are gaps. The three are the information gaps, where perhaps you and I have different information about subjects.Maybe, I want to get to the train station, and you know the way, and I don't. Then, there might be a reasoning gap. Perhaps we all have the same information, but we're trying how to use that information to achieve an objective.For example, planning a night out or choosing where to go on holiday. We're using our logic and our reason to pick the best option, and we can do that collaboratively.The last gap is an opinion gap, where students would agree or disagree with each other based on their personal preferences. Debates are a good example.Ross: I choose a new picture for the classroom or something like that, and here's a choice, which ones do you like, and justify it, why, that kind of thing.Dave: Yes. Exactly.Ross: I've also seen people add to this experience gaps or getting people to talk about what they personally have experienced in their own lives, and how that might be different between students and [inaudible 4:39] to that.Dave: For me, a lot of that could fall under the information gap because you're just talking about life experience, and I have that, and you don't. That's really good in more adult classes if you have a nice mix of students with different experience in the classroom.Ross: Do you want to talk about this for young learners for a second? Because I think with these, it's easier to think of examples for adults than for kids. For kids, we're talking about, for example, what might be a reasoning gap for young learners that would work?Dave: Sure. I'll start with the information gap. That could be, you give pairs different pictures. Student A has a picture of a toy or a character, and person B has a blank piece of paper. They're taking turns to describe that character to them, and then they got to draw it. Then I'll [inaudible 5:26] get, "Sky" and they've got a big head, they've got small eyes, or whatever it might be.Ross: [inaudible 5:31].[laughter]Dave: Yes. No hair.[laughter]Ross: It is something that is worth talking about is this classroom management aspect. When I see this going wrong, a lot of the time, someone's had this idea that student A will have this information, student B will not, and they have to talk, but what just ends up happening...Say, if it's a running dictation that the student whose gone outside to look at the picture, we detect just ends up writing the answer, or are going to find someone who activity...I've got my sheet with...Find someone who can speak more than two languages, and then I just give you the pen. Tell you to write your name in there.I've also seen one where students have to find a way from A to B on a map, but these students show each other the map, so there's no gap there. With that, it's really worth thinking about how it's actually going to play out in the reality of the classroom. How, as a teacher, are you going to make sure that students don't just take the short‑cut of showing the other person the information?Dave: Oh, absolutely. An example, just stay with the A and B describing pictures to each other, I might line mapping roads. We'll have them get one road to [inaudible 6:36] and face the other road, and fixed seats somewhere. They will have to visibly hold up their paper in front of them.As a teacher, you can immediately see if someone's not doing what you've asked them to do, and it's a point of frown on them, whatever your behavior management system is.Ross: Sure.Dave: Or even making a favorite toy, or you're going to have to design a new character when you've watched a very short clip of a monster movie, a cartoon monster, and they have to make you a monster. You give them a certain set of features.Like, you can choose from these body parts. There's a selection of ears and eyes, your legs and arms, and body types, and then they have to put them together to create the scariest monster they can.Ross: I love those. One of the problems you often get with that is that teachers assume that, because I've taught, say, body parts, that that type of task is going to work really well. What I think the actual language you get in a task like that is like, "No, I disagree. I want this one. This is better. I don't like that."I think often with those, that's something that's really worth thinking about. Like what is the language that's going to come up? Because, really probably a lot of time what you're doing is just pointing to something and say, "I want this one," or "I like that one."Dave: Sure. The trick is, again, that's just shouldn't be the main task. That should be the pre‑task almost. Actually, it's really nice. It's another one of the criteria for task design, which is, think about or consider what students are going to think about.Cognitive psychology does show us that what students think about, they will remember. There's a really nice quote that memories erases your thought. You probably heard that on here before.Ross: No, actually I think that will be the first time, but Daniel Willingham, right?Dave: Yes, from his book, "Why Don't Students Like School?" If students are over‑excited, if the task is too stimulating, I always revert to the first language, especially young learners, and start using first language to complete the task.Ross: Because almost with kids there's this maybe lack of being able to self‑regulate in both your own behavior, but I guess, also in what language you're going to use. If you've got them dialed up to 11 on the excitements scale, then the chance that you're going to be able to decide to use your second language to do this thing is pretty unlikely.Dave: Exactly. Yes.Ross: Taking that also links back to what you're saying at the very beginning, that, as a new teacher or as new teachers, I think a lot of us assume that if the students are smiling and having fun and they're excited, then it's a great class, but maybe sometimes dialing that back a bit is actually beneficial.Dave: Absolutely. The opposite is entirely true, as well. If they're bored, I'll be talking in the first language but probably off topic.Ross: It's some sweet spot in the middle [laughs] between utter boredom and complete excitement.Dave: Yeah, exactly. That thing, that example you gave of, if they are making or creating something, maybe drawing or making something out of Play‑Doh, or whatever they're doing, they won't be using the language to do that. They'd taken a product of that task and then using it to use the language that you want to. That's where the learning's going to happen.Ross: Sorry to start jumping around there, but I think this relates to your last point of mentally rehearsing the tasks and thinking about like, what is actually physically going to happen here? I think that's one example.Another one is maybe, we took the farm animals and then for the last hour people are going to make their own farm, but, of course, what language are you using there? You're probably saying things like, "Can I have a red pencil, please?" Or, "Please, pass me the scissors," which is completely unrelated to the farm animals. The students won't be thinking about that at all.Dave: Exactly. It's so simple to avoid that by very quickly putting yourself in the student's shoes and thinking, what language do I need to use to complete this task?Ross: To take us back maybe to a minute if we're teaching adults. I think if it's a very high stakes class, if you're being observed for something that's really, really important, and you've got a task. You can always just find maybe two or three students wandering around the school and trying to do the task within 15 minutes.Not the students that will be in your class later, but just to see how actually it pans out, or just turn around to the person next to you in the teacher's room and go, "Can you do this with me for two minutes?"Dave: Jump out from behind and photocopy it.[laughter]Dave: I need your help with a task.Ross: Yes, covering this farm.[laughter]Ross: How about going back to number three then, cognitive load? That's a term that certainly I was not familiar with until relatively recently. What's cognitive load?Dave: Cognitive load is the challenge of the task itself. How difficult will learners find it? If you are expecting to use language that is far above what they can do, they'll look at the task or start to think about, realize it's well beyond what they can do, and you'll see engagement just drop like a stone.Again, the idea of picking a sweet spot between something that they're able to do with help, and this is almost like scaffolding of all the idea of what they can do. [inaudible 11:20] what I can do with help today, they'll be able to do without help tomorrow.Ross: I guess, here, as well, we're not just talking about necessarily how difficult the language is, but we might be thinking about how cognitively tough the task is. Earlier, for example, we were talking about information gaps, reasoning gaps, and opinion gaps.Maybe a reasoning gap where you've got this much money, these are some different options, these are some different preferences of people in the groups. That sounds like there's going to be a lot more thinking going on there from the students than an information gap where you described...[crosstalk]Ross: Right. When that happens, maybe it's worth thinking about how the processing power and the student's brain is going to be used to be maybe more thinking about the problem rather than for producing language.You might get less accuracy and less fluency. Just like me on this podcast, I stumble over words when I'm trying to explain a difficult concept.[crosstalk]Dave: That happens to all of us, right? You can see when someone's very familiar with the topic because they're fluent, they're calm, they're confident. They're not using discourse markers like, "um," "uh," and so on. When we're trying to think about how best to explain it, we slow down, we stumble over our words.Another thing that is very worth mentioning is that this level of challenge can also apply to the incidental language in class, like teachers giving instructions. I've observed classes where the students are frazzled by the time they get to the task, because the teacher speaks very quickly, they're not creating their language appropriately for the level.The students are leaning forward, trying to follow the thread of the teacher, and then they finish, they have to clarify with their friends next to them. "Did she say this?" "Did she say that?" Then by the time they get to the task, "I've just spent five minutes of intensive listening practice," and now you can get a listening to do that.Ross: It's almost like what students will think about. It sounds like in your example there they were thinking about what on earth could the instructions be rather than what was in the lesson.[laughter]Ross: Well, Dave, thanks for joining us. All of those tips were from just one tiny part of one chapter in "Lesson Planning for Language Teachers ‑‑ Evidence‑Based Techniques for Busy Teachers" by our very own, Dave Weller. Dave, where can people get a hold of it?Dave: Thanks to the plug, Ross. This is a brand new book for me. You can find it on Amazon as an e‑book or a paperback. Planning should support learning. It should use evidence‑based best practices, and it shouldn't take long.[laughter]Dave: Yeah. I think that's the key point. With those principles in mind, I've created 9 or 10 chapters in the book using current research, tested techniques so teachers can end up planning better, faster, and with less stress.Ross: Great. All right. Dave, thanks for joining us.Dave: It's been a pleasure.

Dave Woodward helped shape the entire affiliate program at ClickFunnels. He's a personal mentor, friend, and brother.   It's long overdue that I invite him to come on Sales Funnel Radio to share his wisdom...   I'm really pumped about this. Frankly, it's been in the planning for, like, seven months now…   I have wanted to get interview Dave Woodward  for a very, very long time.     If you guys don't know anything about him, he is one of the backbones of ClickFunnels...   … so you’re in for a treat.   I think it was October-ish 2018, just after the 30-Days Book went out. I was approached by ClickFunnels to write a chapter for a NEW book...   And, NEWS FLASH…   In case you’re slow to catch on ;-) this is me, announcing the release of the NEW Affiliate Bootcamp Book!   And of course, in true Steve Larsen fashion, I'm gonna over-deliver bonuses to the hilt, so you’ll wanna buy the book through my link…   THE NEW AFFILIATE BOOTCAMP BOOK   The book asks the question:   “How would you retire as a ClickFunnels affiliate in a hundred days?”   I spent pretty much all of my Christmas break writing my chapter.   ...it's NOT straight theory kinda stuff.   This is A LOT of the strategies I’ve used to crush it in affiliate contests.   So, I'm really excited about this.   For the 30-Days Book, I interviewed Russell…   For this one, I thought I would interview one of the backbones of Clickfunnels and the reason why:   Stuff gets done   There's an affiliate program that's run well.   The Dream 100 program is killin’ it.   ...and the name of that individual is Dave Woodward. He's a beast. He's the man...   Dave has become one of my favorite people on this planet, a mentor, a friend, a brother, and I look up to him like crazy.   I care dramatically what Dave Woodward thinks about me.   Maybe I shouldn't... I'm NOT supposed to say that, but it's true.   I really appreciate him, and everything he's done for me, and my family.   I am very, very excited, and completely, (in full transparency), extremely honored, to have our guest today.   This has been an interview I have been planning, and looking forward to, for a little over a year and a half now. I'm excited and to be completely honest, a little bit nervous.   I have tremendous respect for Dave Woodward. - tremendous respect.   If you guys don't know who Dave is, you should!   INTRODUCING DAVE WOODWARD   Dave is one of the cornerstones and keystones of all of ClickFunnels, and why it works…   ...please take that from a guy who sat across, and watched, and was very much a part of the intimate workings of what ClickFunnels is, and how it works.   Dave is one of the reasons why ClickFunnels is where it is.   He is one of the reasons why relationships are the way they are.   And,  in my honest opinion, the reason why Russell can even get his message out there…   I have a ton of respect for Dave and for what he does.   He has gone from a friend to an incredible mentor to me. I so appreciate and love him, and I'm very honored to interview him today.   Dave, thanks for being here.   DAVE: Well, I'm extremely honored, and I'm very nervous myself, so that makes two of us.   Thank you for allowing me to come on your show. I have such huge props for you, and I just admire all your work, and everything that you've done…   No one implements like you implement.   I love seeing it, you're such a role model to my kids, it's just fun, and I love seeing the impact that you're literally having across the entire world... so, it's an honor to be here. STEVE: Oh thank you very much, man. I'm glad to have ya.   Now a lot of people may not know….   Dave sits, literally across from his seat, he literally is looking into Russell's office - I mean he's like right there…   There's this tradition, (at least when I was there), it looked kinda like this…   So Dave and I, right, we're working, Melanie's there, we're getting our stuff done. Usually, there's some music going.   We're sitting around, and then all of a sudden Russell goes,”“UHHH!”   Which means…   “Get up and run to my desk.”   So Dave and I, would get up and run over to Russell's desk, and we'd basically watch the zeroes and ones God pour down wisdom into Russell's marketing brain…   https://media.giphy.com/media/3JSGn9bSDpzAFutb6W/giphy.gif ... and gold would just fall out. Dave and I, would both try to keep up, while at the same time validating, “Oh my gosh, that is a cool idea, better catch on to it...”   ... it's like really, really fun. One of the funnest environments. I miss it terribly.   Now, but a lot of people don’t know that you had a history with Russell and, pre-ClickFunnels. Right?   I mean, what were you doing before coming into ClickFunnels?   HOW DAVE MET RUSSELL   DAVE: I had my own marketing consulting agency for years.   In fact, I actually met Russell…   So, I come from the direct response marketing days…   Old Dan Kennedy, Bill Glazer, copywriting type of stuff... years and years and years ago.   And at the time I had a lot of clients who were in either the insurance, the health field, or else mortgages.   A lot of them were trying to figure out this whole online thing… (this is like 2007, 2008).   And it was that point where I thought, I gotta figure out this whole internet stuff. I've got too many clients who are wanting information about it.   I'd been on Russell's list, I'd been on other lists, and Russell was coming to do a seminar in affiliate marketing, not far from where I lived in Southern California…   So I thought, “Oh great, I'll just go, and go and listen there.”   I'm a huge believer of either working your way in, or buying your way in. And I've always preferred buying your way in, if it's at all available, it's faster. So it was Russell and Stu McLaren, and Russell got up and said:   "Hey, you know what? If you guys would like to take us out to lunch or dinner or anything, to just kinda pick our brains, go to the back and sign up."   I literally jumped out of my chair, ran to the back, and I signed up for EVERY breakfast, lunch, and dinner that Russell had.   I'm like, “The guy's either gonna hate me, or we're gonna become friends through this thing.”   I wanted to get to know him better, and so I literally signed up for EVERYTHING!   I'm sure when he first got it he was like, “Who in the world is this Dave Woodward guy? What have I gotten myself into?”   I can guarantee you, Russell would never do that now. You could never take him to lunch or dinner, but he was just getting started.   … and so we created a deep friendship.   I ended up setting up his 10th anniversary for Collette. They flew down to Southern California and went out to dinner, then flew to Catalina...   Russell is more than a friend, he's like a brother.   He's probably, in all honesty,  the closest friend I have aside from my wife.   There's nothing I wouldn't do for him.   Over the years, we've had the opportunity of doing a ton of different projects together, some in the real estate niche, some in the network marketing niche, some in the fitness niche.   Some made money, some lost money.   My very first product was with Russell - it was Legendary Marketers.   STEVE: No way.   DAVE: Yeah.   STEVE: Oh, I didn't know that was. Cool.   DAVE: And so, that was the very first product that I ever did...   Again it was one of those things where I saw, just his desire to help others grow, and, at whatever the cost. Just, just pour so much into people, and I was just drawn to him…   … and we've just literally become lifelong friends.   When we started ClickFunnels, I was still in Southern California. I was flying up here every other week, and Russell was like, “You just need to move up here..”   I'm like…   Dude, listen, we've been through a lot of things over the years, and NOT all of them have worked…   Before I uproot my family, I wanna actually make sure this whole ClickFunnels thing is actually gonna take off.   And then, as you can tell right now, it'll be three years this August.   So we moved up here after ClickFunnels was up and running for about a year and a half.   STEVE: I remember that. Only because it was like two months before, you flew in, that's when I moved my family up.   Russell was like, “You know Dave Woodward?” ...and I had just started seeing your majesty in the inner workings of ClickFunnels - all the stuff you're doing with Dream 100, the affiliate stuff…   … and Russell was like,  “He's gonna move on up,” and I was like, “No way, that's awesome.”   You moved up, and I kid you not…   We were already kind of naturally high energetic people, you, and I, and Russell, but the overall energy, it was like one plus one equals twelve when you came in!   I was like, “This is awesome,”...it's not a classic business office…   We were running around barefoot in t-shirts, shorts... music going all the time…   it's such a fun place to work and try to change the world also.   So, how did you end up doing stuff for Russell's people - the affiliate manager was your first role, right?   DAVE: Actually, no. I was in charge of all our business development. So one of the pieces of it was the affiliate plan.   STEVE: That's right, my bad.   DAVE: Yeah, so, what happened was, so …   My coming into ClickFunnels, (as far as, one of the things), we were at TNC, (we’ve just come back from TNC 10, so this must have been TNC, like five, or six), and it was ClickFunnels' first booth, at TNC, and they had put us in the far back corner…   I was like, “This just sucks. We can't do this. No one's gonna see us.”   Russell was actually speaking at TNC, and he was like, “Gosh, I just wish we had some way of getting attention to us, no one's gonna come to us…”   ...because it wasn't in the main ballroom…   He was like,  I wish we could just get some of those like showroom girls, you know, event girls, whatever it is.”   I'm like, “Dude, you're in my city. This is San Diego. I promise you, I will get you some girls.”   And sure enough, within about two hours, we had about five girls there, basically handing out t-shirts and directing people where to go...       And that's, I guess when Dillon and Todd were like, “We definitely need him more full-time than he is currently,” and that's how it started.   STEVE: Oh, man. Yeah, yeah. There have been multiple times where you've done stuff like that. Russell flies in, you fly in, you know.   Guys, Dave, Dave is the one that protects Russell emotionally when we travel as well. Multiple times, just protecting him.   Making sure, “Hey, we need to get somewhere,” or making sure Russell is where he needs to be, and protecting him from people who may be, respectfully, somewhat of a time suck.   There are just so many stories that are just popping into my head.   Oh my gosh…   You guys flew in once, and Russell didn't have any time to sell, or didn't get order forms, and you literally, in the lobby…   What's this story again? It's awesome.   DAVE: A friend of ours, basically in the health space, flew into Denver…   I love to sell, which is weird because for years I hated selling. It was like the worst thing in the world.   I would never, ever sell. I would never associate myself with selling...   … NEVER, dirty, bad!   But, I remember, we flew in, and I was sitting there talking to the promoter, and he basically said:   “Well, you know what, I thought we were gonna have more time. we ran over, we only really have about 25, 30 minutes, and you can't sell”   I'm like, “Dude, we flew all the way to Denver. We're not here NOT to sell.”   And he says, "No you really can't sell."   So I said, "Well, how much time do we have?" He said, "Well, you've only got 30 minutes."   I'm like, “Well we need at least 45.” He said, "Okay, 45 minutes."   I said, "If I just have a little tiny offer, would that be okay?" He said, "Yeah, but I don't want a full pitch." I'm like, “No problem.”   So I literally went into the little business center, and I created an order form on the computer they had there, (I'm sure it's so completely non-compliant)...   It was, honestly, just name, email, address, phone number, credit card - that's it.   It was printed off black and white and there was nothing fancy to it. I don't even know if they knew what they were buying.   But, just like Russell does, he was able to get up and he spoke... I could tell the promoter at the back was just getting antsy.   He's like, “You gotta hurry, you gotta hurry, gotta hurry.”   I'm like, “Russell let's just go a little bit faster.”   So, all of a sudden, he gets to the pitch.   He's like, “Listen, I don't have time to go through this, but you're gonna get this, this, this, this, and this…   ...and if you want, Dave's got some order forms, just take the order form and give them to us, and we'll process it.”   I literally had someone come back there and grab it out of my hand, write on it, and slap it down right in front of Russell on the stage.   Usually, we get table rushed at the back, but we had this massive podium rush. Everyone went to the front, and it was hilarious.   We out the room and we just laughed.   It's those types of moments, where I'm like, “No matter what it takes when you have an opportunity, we're gonna sell...”   And we sold, and it did very well.   STEVE: You guys knocked out the house, is what I heard. Just blew it out on a whim. I mean, come on! That's the kind of team that you guys are. It's just awesome.   Hey, so I wanted to ask a little bit about this Affiliate Book that's coming out - you have such unique eyes from where you are, and where you get to sit.   I know you get to work a lot with:   Biz Dev   Bringing in new Dream 100 people   All the affiliate stuff as well   … what is this New Affiliate Book, by the way?   DAVE: Oh, it is super, super cool… so this whole idea behind affiliate marketing ... First of all, for those of you who aren't familiar with affiliate marketing, it's probably the easiest way to get started online, because you don't have to have your own product.   You are literally promoting someone else's product.   And for us, they're promoting ClickFunnels.   We have a whole bunch of front end products because it's really hard to promote just a free trial -  one of those was 30days.com. Another one is OFA…   If you're not on OFA, my gosh, the One Funnel Away Challenge, Steven is just crushing it -  so you definitely need to be in that.   We had so much success with 30days.com - the idea behind that summit was, Russell went out to a lot of our Two Comma Club award-winning people, like Steven, and basically said:   “Hey, if you were to lose everything, and all you had was ClickFunnels, and your marketing know-how, what would you do in the next 30 days, to make money?”    ..and they put together a 540-page book, and it became a front-end for the One Funnel Away Challenge.   Well, as we were looking at that model, it became super, super successful, and we realized...   Steven actually helped build out Affiliate Bootcamp, which has been the primary product we've used to train our affiliates over the last year and a half, and we're at a point right now where we're trying to think…   If we were to update it, how would we do it best?   And we thought, instead of us doing it…   Why not reach out to the people who've been the most successful doing affiliate marketing inside of ClickFunnels, and have them tell their stories…   ... and use somewhat of the same premise as the 30 Day Book…   Not necessarily, if you lost everything and only had 30 days, but, “If you were to start over as an affiliate, what are the things that you would wanna do?”   What are the different things that would actually provide the greatest return in the shortest amount of time?   Because for a lot of affiliates, it's like, “Ah, I've got my own job, I don't have a whole bunch of time, ” and it was just fascinating.   Bailey Richert is the one who basically put it together for us, she went out, and interviewed 17 of our top affiliates…   I was literally talking to her today, and she goes, “You know, Dave, the 30days.com was really cool, but the real secret sauce was on the back end after you bought the product you got behind the scenes of their actual funnel…”   She said, "I don't know what it was with these affiliates? They literally gave every single thing on the front end."   So those people who actually get involved in our New Affiliate Launch, or Summit are going to get the very best of 17, (we may actually get to 20, but 17 right now), people who have literally been crushing it as an affiliate for ClickFunnels sharing EVERYTHING:   YouTube strategies   How to do an offer?   What is a bridge funnel?   How do you build a list?   How do you build a product that ties into your list to provide even greater value so that people fall in love with you, as well as the new product that you might be introducing them to?   So, the whole idea behind this is really to have a person create their own product/ business on the front-end without having to create all the products, (and everything else), on the back end...   … and NOT have to worry about the support.   So, I'm so excited about it...  because it’s literally going to be the BIGGEST game changer for us.   Currently, Steve, we have five people who have done over a million dollars in affiliate commission so far.   Five people who have hit the two comma club as an affiliate for ClickFunnels.   STEVE: Oh man.   DAVE: It's just insane.   You know, when we first started this thing, we came up with this idea of the dream car…   The idea behind it is, if you got a hundred people, we'd pay $500 for your lease or purchase of your dream car.   At 200 people, we'd pay $1,000.   I thought, “No one's ever gonna get to 200 people!”   ...and now we have people who have thousands of affiliates...   Thousands of ClickFunnels accounts because of it.   So the idea behind affiliate marketing:   It's the easiest way to get started online.   This new affiliate summit is literally gonna give you, truly, the step-by-step program from 17 of the top affiliates that we have.   They're gonna break down, NOT only just affiliate marketing, but how they actually get traffic, how do they actually build an offer, how they build a bridge page.   And you’ll actually see some of their actual bridge pages, as well.   We were sitting there trying to price this thing out, and I'm like, “You understand this is like a $500 product,” and Bailey's like, “Yeah, but summits only sell for like $47 to $67.”   And I'm like, “Oh my gosh, alright, we'll do it, whatever price.”   I don't know what price point we're gonna settle at  - somewhere between $47 and $97, I don't know...   But it's people like you, Stephen, who literally said, "Alright, let me show you exactly what it really takes. Let me go through and break it down step by step, how you actually can make tens of thousands of dollars a month, as an affiliate."   And I know we pay you a pretty hefty cheque, just in affiliate commission.   STEVE: Yeah, it's, uh ...   And what's funny everybody, is that it's kinda on the back-end of my business and it's just because of the strategy.   I gotta tell you, I loved writing the 30 Days chapter, but the affiliate chapter... oh my gosh, I took all of Christmas, like three or four days, to write that thing - it was beautiful.   DAVE: Well actually Bailey, (just between you and I), even though anyone who listens to this will now know it, Bailey actually said yours is the best one…   … honestly, because it was so detailed, Stephen.   The way you did it, she actually wants to lead with yours to set the stage for the other ones...   Because of the way you talked about:   Bridge Funnels   Offers   Bonuses   I mean, you were our top affiliate for 30days.com, and it was just crazy. And, I've seen you do that multiple times, even in our One Funnel Away Challenge.   And the crazy thing about the One Funnel Away Challenge was you came in dead last and didn't start until like three days left. It was crazy.   STEVE: That 10X Secrets thing...   DAVE: That's what it was.   And you were right in the middle of OfferMind, I think. Was that it?   STEVE: Yeah, yeah.   DAVE: And I was asking you to teach some of our speaker training, and you had no time. No time at all. And yet, to see you come in, and use this strategy that you now taught in that chapter, it was just brilliant to see.   The thing that I love most about the chapter that you wrote, is your chapter actually goes in through, literally, step by step…   It's how you teach -  you're so very methodical in teaching practical steps - literally, it's ‘paint by numbers.’ It's the easiest way you can do it…   I mean, step one, step two, step three.   And because you've been through it, you lived through it, and you started with nothing…   ...and NOW, you're one of our top affiliates!   It's just neat that you were so kind and so generous with spending as much time as you spent on that chapter.   It's probably going to be one of our leading chapters.   STEVE: Oh man, I appreciate that a lot.   Well,  what can somebody do ... What's a favorite way ... I mean, you have such a unique area that you get to see all these different affiliates…   If somebody’s new and doesn't have much of a following, what should they be doing if they want to become an affiliate?   DAVE: I think, it goes back to, probably your secret sauce, and that's publishing.   I think, honestly, and as much as people hate it, I think it’s one of the coolest things.   People wanna find someone they can connect to, so documenting your journey as an affiliate, is probably the best thing that you can do, because later you’re gonna be able to sell that journey.   And it may take a little bit of time, but if I was a brand new affiliate, just starting off, I would start publishing on a regular basis.   You could pick:   Dotcom Secrets   Expert Secrets   30 Days   ….I don't care which product you want.   I would literally go in, I would make it your own, I would teach what you learn, on a Facebook live, on an Instagram story, whatever it might be, and refer people to it:   “This is what I've learned.”   Because people love understanding the take a way that you got and seeing how that you're actually using that.   So, I think that's probably one of the things that I would look at.   Where MOST affiliates go wrong is, they think they're just gonna take the affiliate link and just promote it directly, and that's why I love your chapter… because you were so anti that.   You're like, “You can't do that! Let me show you what you can do.”   And I think, as an affiliate just getting started, just pick one thing…   And, again, as you mentioned before, just go all in on it. Study it. Make it your own.   And that way when you're teaching it, people are going, “Oh, that's how that works. Oh, okay, now I understand,” and then people can connect with that… and they'll love the journey as well.   STEVE: Oh man, that's awesome. Thank you so much for taking the time.   You know, I have such respect for you, and what you do, and just love your family -  my wife and I talk about you guys a lot.   We love your sons, they're all awesome and incredible - we just love your family and everything that you guys do.   And I really mean what I say,   I really believe that half the reason Russell can do what he does is that he’s got you in his corner, just fighting battles he didn't even know about.   You know what I mean?   Just going to bat, getting all the dirties away that are out there trying to take advantage, you know, stuff like that.   It's just this role that is like so, I don't even know, it's special. And it's fun to see it.   DAVE: Thank you.   STEVE: So I just, anyway. Any parting advice or words before we end up here?   DAVE: You know, for me, I think the one thing I would tell people is just don't give up.   I think the hardest part for affiliate marketing, or even for a lot of the online marketing is just, you have a dream out there, and you see it, and you want it so bad…   ... and yet things don't go exactly the way that you want.   You can joke around about this idea, being one funnel away, but you truly are…   You just don't know which funnel that's gonna be.   And so, I would just say:   If this is what you wanna do, don't let anything get in your way.   It's possible, things happen... it doesn't go as fast as you want, I'll let everyone understand, I'm totally transparent...   It never works as fast as you want   ,...but for those who stick it out, you get to this little corner and you literally hockey stick and life takes off for you.   I saw the same thing with you last year, where you got going and you’re putting forth all this effort, and all of a sudden you get to this little corner, and you literally hockey stick, and life just takes off for you.   And I think the problem is, most people aren't willing…   Again it's that, 99 yards does not a touchdown make…   You gotta be willing to go all the way   As long as you don't quit, and just realize that you're in that phase of learning…   There are two parts…    You have the:   Learning phase   Earning phase   Too often people wanna jump into the earning phase, without paying their dues in that learning phase.   If you'll spend the time in that learning phase, the money that will come later in life - it's just crazy. Astronomical.   STEVE: Oh, man. Well, thank you so much. You're a friend, a mentor, a brother, and just, I love and appreciate you. Thanks for being on.   Awesome episode, right?   Hey, bear with me for just a moment while I tell you about makeaffiliatesgreatagain.com.   Probably one of the most fragile phases of being an entrepreneur is that tender spot where you have just enough cash coming in to get excited, but expenses also increase a little while you take on new tools and new systems, new teams.   It can be heart pounding, and frankly, nerve-wracking.   Well, one of the ways I've kept ownership of my companies and NEVER picked up any debt or used any of our family finances to grow the business, was through affiliate marketing.   My first dollar online actually came from affiliate marketing, ONLY a few years ago.   So I often get asked the question:   “Steve, how can you have been bootstrapping this and scraping by so hard just a few years ago, but now have a business that makes millions in revenue?”   … that's a fair question.   So besides having kick butt products, when I've needed to get some extra cash for an expensive project, I have a very specific method of affiliate marketing that gets me paid to sell other people's products.   You wanna see how I do it? Just go to makeaffiliatesgreatagain.com.   ClickFunnels actually wants to know how I've been doing this as well…   So I just wrote a chapter in ClickFunnels new book called Affiliate Bootcamp... and if you wanna see my chapter, and be shown how I treat affiliate cash in my business, just go to makeaffiliatesgreatagain.com…   You'll get a bunch of other cool stuff from me - like, the actual Make Affiliates Great Again Funnel…   The one you're gonna see there - it’s pre-built - it’s awesome - and you can download it.   You also get my audio chapter on how I create affiliate offers. You get the actual video of me training my team on how to build Make Affiliates Great Again - it's crazy valuable.   Plus you also get several my other stage speeches.   How I launched my affiliate offers…   And you'll even get a discount ticket to OfferMind… + the Make Affiliates Great Again Mini-Course…   Is it okay if I over deliver???   If you want ALL that for free... plus other things, literally just sign up at makeaffiliatesgreatagain.com... and then, sign up for the New Affiliate Bootcamp through my affiliate link. Go figure.   My friends, get rich, give back.

On today’s episode you will hear part 3 of 4 of Russell’s interview with Andrew Warner about the Clickfunnels start up story. Here are some of the awesome things you will hear in this part of the story: Hear how selling Clickfunnels at a Mike Filsaime event got Russell his first ever big table rush at the end of his presentation. Hear from both Dave and John about how they feel about Russell and what they do for the company. And find out how going to Dream Force this year, renewed Russell’s passion for growing his business. So listen here to find out more about the Clickfunnels start up story. ---Transcript--- Hey everyone, this is Russell Brunson. Welcome back to the Marketing Secrets podcast. I hope you enjoyed episodes 1 and 2 of the interview with Andrew Warner at the Dry Bar Comedy Club where he was telling the Clickfunnels startup story. I hope you are enjoying this interview series so far, and I hope also this motivates you guys to go over to the mixergy podcast and subscribe to everything that Andrew does. Like I said, he is my favorite interviewer and I think that what he does is second to none. So I hope that you guys enjoy him as well, and go subscribe to the mixergy podcast. But with that said, I’m going to queue up the theme song, and when we come back we will start into part 3 of the Clickfunnels startup story interview. Andrew: I actually got, I did see, I don’t know, I didn’t see the video you mentioned, but I did see what it looked like. Here’s one of the first versions. He compared it to Clickfunnels, he said, I mean to Lead Pages. He said, “Look at how Lead Pages has their stuff all the way on the left, all the controls.” Oh you can’t see it. Oh, let me try it again, let me see if I can bring up the screen because this is just, it’s just too good. Hang on a second. I’m just constantly amazed how you’re able to draw people to you. So this is the article from Lead Pages, this is the first landing page from Clickfunnels, this is what he created before, this is what you guys did together. This is your editor and h e said, “Look, if you’re on Lead Pages, their controls, their editor is all the way on the left and it’s just moving the main content to the right, which is not looking right. And I prefer something that looks like this, with a hundred pixels on the left, a hundred pixels…” I go, who knows a hundred pixels, it’s like you, what is this? Russell: Dylan is obsessed with that type of stuff, it’s amazing. Andrew: Obsessed. And you draw people like that. You draw people like Dave, who is just phenomenal. Dave, the traffic and conversion event that he was just talking about, is that the one that you went to? Dave: The one after that. Andrew: The one after that. Okay, we’ll come back to that in a second then. So this became your next version, you brought on a new partner, and then you did a webinar with this guy. Who is this guy? Russell: It’s Mike Filsaime, one of my first friends online. It actually wasn’t a webinar, it was a live event. He was doing a live event in San Diego and he was like, “You have to come and sell Clickfunnels.” And I was like, “Nobody’s buying Clickfunnels.” We had a free trial and like, we couldn’t give it away. It was crazy. And he’s like, “Well, you’re on this website, you’re picture is there, you have to come and sell Clickfunnels, and I need you to sell it for at least $1000.” Because the way it works, if you speak at someone’s event, you sell something, you split the money 50/50. So he’s like, “It needs to be at least $1000.” And I was all bummed out. I didn’t want to do it. And the event actually started, but they were streaming it live online, so I was actually sitting at our office in Boise, watching it as I’m putting together my slides to create Clickfunnels, and then flew out to the event. And then we had a booth, and I don’t know if I told you this, we had a booth and Lead Pages had a booth right across the little hallway, skinny hallway. And Todd’s wife was manning our booth and then Lead Pages was right there, and it was so funny because she was not shy at all about talking about Lead Pages. She’s like, “Yeah, we’re like Lead Pages except for way better. We can do this and this.” And the other guy is sitting there like, right in front of her as she’s telling them everything. And it was..anyway, I digress. It was pretty funny. Andrew: By the way, she’s still at it. I saw a video that you guys created, you were talking to her and she goes, “I will be Clickfunnels.” I go wait a minute, you still had that fire, okay. So you were at that event. Russell: So we’re at the event and there’s probably, I can’t remember, 150-200 people maybe in the room. So I got the slides up and Dylan was there and he was like, when we got to the funnels he was going to demo the editor, so I did the whole thing, showed the presentation and we demo’d Clickfunnels and at the end of the thing I sold. And I’ve been good onstage, but by far, that was the first time in probably 8 years that I’d seen a table rush, where people are stepping over the things, jumping around, trying to get to the back to buy as fast as they could. Andrew: What did you say to get them to want to do that? Russell: We made a really, I mean we gave the presentation, and gave a really good offer at the end. They get a year of Clickfunnels for free, plus they get training, plus they were going to get all these other things for $1000. Andrew: It was $1000 training and a year of Clickfunnels for free, and then they become long term members. And it was also called, Funnel Hackers? Russell: Funnel Hacks, yeah. Andrew: Funnel Hacks. And that’s the thing that became like… Russell: The culture. Andrew: This culture, this tribe. It wasn’t just they were signing to learn from you, they were becoming funnel hackers. That’s it. Russell: I mean, that wasn’t planned though. It was like, I was trying to think about a sexy name for the presentation, so I’m like ah, Funnel Hacks. And somebody owned FunnelHacks.com, and I’m like, I’m still doing the presentation that way. And then later we made t-shirts that said, “Funnel Hackers” and then now we got 4 or 5 people have tattooed that to their bodies, it’s really weird. But anyway, that’s what happened. We did that and we sold it and I remember going to dinner that night with the guys who were there, and Todd and his wife and everything. And we were all excited because we made some money finally. But I was just like, “You guys don’t understand, like I’ve spoken on a lot of stages, and I haven’t seen a table rush like that.” And I remember back, there was a guy, he passed away a couple of years ago, his name was Fred Catona. And he was a radio guy. He was the guy who did the radio commercials for, do you guys remember, it’s got the guy from Star Trek, what’s his name? Audience member: Priceline. Russell: Priceline. He did the Priceline radio commercials and made that guy a billionaire. And he told me when we were doing the radio ads, “This is what’s going to happen. We’re going to test your ad and if it works, I’m going to call you on the phone and let you know you’re rich. Because if it works, it means you’re going to be rich.” So I remember going to dinner that night and I told the guys, “Just so you guys know, we’re rich.” And they’re like, “What do you mean? We made $150,000.” I’m like, “No, no, no. The way people responded to that, I’ve never seen that in my life. We’re rich.” The response rate from that, I’ve never seen. Andrew: And then you went to webinar after webinar after webinar. Russell: On the flight home that day I’m texting everybody I’ve ever met. “I got a hot offer, this webinar crushed it. We just closed whatever percent of the room at Filsaime’s event. Who wants to do it?” And we started filling up the calendar. Andrew: And the idea was, and you told me you did 2 to 3 some days. And the idea was, they would sell somebody on a course, and then their members would then hear how your software and your funnel hacking technique would help up what they just bought and then they would sign up. You’re still excited, I can see it in your face. And then this thing took off. And then you started doing an event for your culture, your community, and this guy spoke, Tony Robbins. Russell: Oh yeah, there’s Tony. Andrew: One of the first ones. Was he at the very first one? Russell: No, he came to the third one, was the first one we had him come to. Andrew: Yeah? Why do an event? Why do your own live event? Russell: So we’ve done events in the past. I know events are good, but I’d sworn off them because the last event we did, I think we sold 3 or 400 tickets and less than 100 people showed up and I was so embarrassed. I was like, “We’ll never do events again.” And as soon as this, as soon as Clickfunnels launched and it was growing, everyone’s like, “We want to do a meet up. We should do an event.” All the customers kept asking. And against my, I didn’t really want to do it, but at the same time I was launching my book, and I had won a Ferrari in this affiliate contest so I was like, “What if we did an event and we had the Ferrari there and we gave it away and then we’re…” we had other ideas for giving away other cars and it became this big, exciting thing that eventually turned into an event. And that was the first Funnel Hacking Live event in Vegas, and we had about 600 people at that one that showed up. And that’s where it all kind of, it all started. Andrew: And it built how much, how many people are you up to now? Russell: Last year we had 3500 people and we’re on track to have about 5000 at this year’s event. Andrew: 5000? Yeah. Russell: Those aren’t free tickets. Each ticket’s $1000, so it’s…. Andrew: So how much is that in total revenue? Russell: From the event? Andrew: Yeah. Russell: So ticket sales, last year was $3 ½ million, this year will be over $5. But at the event we sell coaching so last year we made $13 million in coaching sales at the event as well. Andrew: Wow, would you come up here for a second, Dave? Do you guys know Dave? Yeah, everyone knows Dave. You know what’s amazing… {Audience catcalls} Andrew: That’s amazing. Dave: I don’t know who that is. Andrew: A catcall. I saw a video, you guys have this vlog now, a beautifully show vlog. You guys went to sales force’s conference, you’re looking at the booths and in the video, do you remember what you did as you saw the different booths? Dave: I think that one I went and asked what the prices for each of the booths were. Andrew: Yes, and then you multiplied. And he’s like, you’re not enjoying the event, you’re calculating ahead, how much. “10,000 that’s 100,000….” It’s like wow, right. You do this all the time? Dave: Yeah. It’s a lot of money in an event like that. Andrew: And you think, and if this was not your event, you would be doing the same calculation trying to figure out how much they brought in today. Wowee. Alright when you went to sales force did you calculate how much money they probably did from their event? Dave: We were doing that the whole time, absolutely. Andrew: You saw the building, you had to know… Dave: Oh my gosh. 61 stories. Andrew: Why? Why do you guys want to know that? Why does, how does that… I want to understand your drive as a company and I feel like this is a part of it. Figuring out how much money other people are making, using that for fuel somehow. Tell me. Dave: I think it actually goes back to Russell and his wrestling days. We had the experience of going to Chicago right after that, and super just exhausted. And it was one of those things where he literally landed, we walked down and we’re underneath the tarmac and all the sudden Russell goes from just being totally exhausted to a massive state change. Where he’s literally right back where he was with his dad and he and his dad are walking that same path to go to, I think it was Nationals. And I saw Dan Usher, who was doing the filming, capturing that moment and it’s that type of a thing for Russell. Where all the sudden it’s the dream, where as soon as you see it, it can then happen. And Russell’s just been amazing at modeling, and again the whole idea as far as just going at a rapid, rapid speed. I mean it’s “Ready, fire, aim.” Andrew: It’s not you gawking at the sales force, what’s the sales force event called? Dave: Dream Force. Andrew: Dream force. It’s not you gawking at how well Sales Force’s event, Dream Force is doing, it’s not you having envy or just curiosity, it’s you saying, it’s possible. This is us. That’s it. Dave: It’s totally possible. Andrew: It’s totally possible. We could get there. And when you’re sizing up the building, you even found out how much the building cost. Who does that? Most people go, “Where’s the bathroom?” How much does the building cost? Dave: There’s a number. Andrew: It’s you saying, “We could maybe have that.” Dave: We can have that, yeah. Andrew: Got it. And so let’s go back a little bit. I asked you about Traffic and Conversion because the very first Traffic and Conversion conference you went to, you guys were nobodies. Nobody came and saw you. Dave: We were put out in North 40 pasture, way, way far away. Andrew: And some people would say, “One day I’ll get there.” you told Russell, “Today we’re going to get there.” Dave: Well Russell wanted, he was speaking and so whenever you’re speaking at an event, it’s important that you fill a room, like this. And there’s nothing worse than having an event and having no one show up. It’s just the worst feeling in the world. And so he’s like, “All we need, I gotta find some way of getting people into the event. I wish we had like some girls who could just hand out t-shirts or do something.” And I was like, we’re in San Diego, that’s like my home town. Russell: Dave’s like, “How many do you need?” That’s all he said. Dave: It’s just a number. It comes down to a number. How many do you want? So we ended up having, within an hour or so we had 5 girls there who were more than happy to dance around and give out t-shirts and fill the room. Andrew: and the room was full? Dave: Packed. Andrew: Packed. And why wouldn’t you say, “One day, the next time we come to Traffic and Conversion, the tenth time we’re going to do it.” Why did it have to be right there? Dave: It’s always now.   Andrew: It’s always now. Dave: It’s always now. Andrew: It’s always now. It’s never going to be the next funnel, it’s never going to be the next product launch. I’m going to do whatever we can right now, and the next one, and the next one. That’s it. That’s who you are. Dave: That’s how it works. Andrew: And now you’re a partner in the business. $83 million so far this year, you got a piece of that. Dave: Yes. Do i? Russell: Yeah. Dave: Just checking. Andrew: Do you get to take profits home now? Dave: We do. Andrew: You do, you personally do? Dave: Yes. Andrew: Are you a millionaire? Dave: Things are really good. Andrew: Millionaire good from Clickfunnels? Dave: yes. Andrew: Really? Dave: Yes. Andrew: Wow. And you’re another one. I was driving and I said, “What was it about Russell that made you work for him? What was it?” and you said, “I’ve never seen anyone implement like him.” Give me an example of early days, something that he implemented…you know what, forget that, let’s not go back to Russell. As a team, you guys have gotten really good at implementing. Give me an example of one thing that you’re just stunned by, we did it, it came out of nowhere, we could have been distracted by funnel software, we could have distracted by the next book, we did this thing, what is it? Dave: You’re here on this stage with JP, and this was what 6 weeks ago? Andrew: and this whole thing just came from an idea I heard. You use Voxer. Why do you use Voxer? Russell: I don’t know. Andrew: Because you like to talk into it. Russell: Yeah, and you can fast forward, you can listen at 4x speed, you can forward the messages to people really easily, it’s awesome. Andrew: and it’s just train of thought, boom, here’s what I think we’re going to…No, it’s not that. I heard it’s, “I have a secret project…” Russell: “I’ll tell you guys about it later.” And they all start freaking out. “Tell us now.” Andrew: “Secret project. I don’t know what it, it’s going to be exciting.” They don’t know what it is, going to be excited. Russell: Do you know how it started, this one? I was cleaning my wrestling room listening to you, and you were, I don’t know whose event it was, but you were at the campfire, it sounded like. And you were doing something like this and I was like, I want my own campfire chat to tell our story. And then I was like, “Dave, we should do it.” And now we’re here. So thanks for coming to our campfire…. Dave: That’s how it happens. Andrew: And that’s exciting to this day. Alright, thank you. Give him a big round, thank you so much. You know what, I didn’t mean for this to come onstage, but I’m glad that it is. This made you laugh when you accidentally saw it earlier too. Why is this making you laugh? What is it? Russell: So we’re not shy about our competitors, even when they’re our friends. So one of the companies we’re crossing out is his. That’s why it’s funny. Andrew: It’s one of my companies. That’s Bot Academy there. It’s also a company I invest in, that octopus is ManyChat, I’ve been a very big angel investor and supporter of theirs. I’m not at all insulted by that, I’m curious about it. You guys come across as such nice, happy-go-lucky guys. Dave asked me if I want water, I said “Dave I can’t have you give me any more things. I feel uncomfortable, I’m a New Yorker. Punch me, please.” So he goes, “Okay, one more thing. I’m going to give you socks.” So he gave me socks. Really, but still, you have murder in your eyes sometimes. You’re crossing out everybody. This is part of your culture, why? Russell: It comes back, for me its wrestling. When I was wrestling it was not, I don’t know, there’s different mentalities right. And I did a podcast on this one time and I think I offended some people, so I apologize in advance, but if you’re in a band and everyone gets together and you play together and you harmonize, it’s beautiful. When you’re a wrestler you don’t do that. You know, you walk in everyday and you’re like, those are the two guys I have to beat to be varsity. And then after you do that, you walk in and you’re like, “Okay who are the people I have to beat to be in the region champ, and then the state champ, and then the national champ?” So for me, my entire 15 years of my life, all my focus was like, who’s the next person on the rung that I have to beat? And it’s studying and learning about them and figuring their moves and figuring out what they’re good at, what they’re bad at so we can beat them. Then we beat them and go to the next thing, and next thing, and next thing. So it was never negative for me, it was competition. Half the guys were my friends and they were doing the same thing to me, we were doing the same thing to them. I come from a hyper competitive world where that’s everything we do. And I feel bad now, because in business, a lot of people we compete against aren’t competitive and I forget that sometimes, and some people don’t appreciate it. But that’s the drive. It’s just like, who do we, if I don’t have someone to, if there’s not someone we’re driving towards, there’s not a point for me. Andrew: And even if they’re, even if I was hurt, “I accept it, I’m sorry you’re hurt, Andrew. I still care and love you. We’re going to crush you.” That’s still there. Russell: And I had someone, so obviously InfusionSoft was one of our people we were targeting for a long, long time and I had a call with Clayton and someone on his team asked me, “Why do you hate Infusion Soft so much?” I was like, “I don’t, you don’t understand. I don’t hate, I love Infusion Soft. I’m grateful for it. I’m grateful for Lead Pages, I’m grateful for….” I told them, have you guys seen the Dark Knight, my favorite movie of all time? And it’s the part where Batman and the Joker are there and Batman is like, asks the Joker, “Why are you trying to kill me?” And the Joker starts laughing and he’s like, “I’m not trying to kill you. The reason I do this is because of you. If I didn’t have you, there’s no purpose behind it.” So for me it’s like, if I don’t have someone to compete against, why are we playing the game? So for me, that’s why we’re always looking… Andrew: It’s not enough to say, it’s not enough to just say “we’re playing the game because we want to help the next entrepreneur, or the next person who’s sick and needs to create…” no, it’s not. Russell: That’s a big part of it, but like, there’s something… Andrew: Yeah, but it’s not enough, it’s gotta be both. Russell: My whole life there’s, the competition is what drives me for sure. Andrew: And just like you’re wrestling with someone, trying to beat them, but you don’t hate them. You’re not going to their house and break it down… Russell: Everyone we wrestled, we were friends afterwards. We were on the same Freestyle and Greco teams later in the season, but during, when we’re competing, we’re competing and everyone’s going all at it. Andrew: Everyone’s going all at it. That’s an interesting way to end it. How much more time do we have? How much more time do we have? I’m going to keep going. Can I get you to come up here John, because I gotta get you to explain something to me? So I told you, I was online the other day, yeah give him a big round. I was online the other day, I don’t even know what I clicked, I clicked something and then I saw that Russell’s a great webinar person, everyone keeps telling me. Well, alright, I gotta find out how he does it. So I click over, “Alright, just give your email address and you can find out how..” Alright, I’ll give my email address to find out how he became such a great webinar presenter. “Just give a credit card. It’s only $4.95, so it comes in the mail.” It comes in the mail, that’s pretty cool. Nothing comes in the mail anymore. Here’s my credit card. It goes, “Alright, it’s going to mail it out. Would you also like to learn how to use these slides? $400.” I go, no! I’m done. Russell: Welcome to the funnel. Andrew: Welcome to the funnel. I’m done. But I’m going to put in Evernote a link to this page so I don’t lose it so I can come back. I swear. I did it. And this is my receipt for $4.95. Don’t you ever feel like, we’re beyond this? We’re in the software space now, we’re competing with Dropbox, we’re not competing with Joe Schmoe and his ebook. And you’re the guy who sold the, who bought the ad that got me. John: I know. Andrew: I asked you that. Do you ever feel a little embarrassed, “We’re still in the info market space.”? John: No, I think it’s the essence of what we do, of what Russell does. We love education. We love teaching people. I mean, the software is like the backend, but we’re not software people. I mean, we sell software, but we teach people. All these people here and all the people at all of our events, they just want to learn how to do it better. Andrew: I don’t believe it. John: Okay. Andrew: I believe in him. I don’t believe in you. I believe that for you it’s the numbers. Here’s why I don’t believe it. I’m looking in your eyes and you’re like, “I’m giving the script. I’m good, I’m doing the script.” I see it in your eyes, but when I was talking to you earlier, no offense. This is why he does what he does. When I was talking to you earlier, you told me about the numbers, the conversion, how we get you in the sales funnel, how we actually can then modify…That’s the exciting part. Don’t be insulted by the fact that I said it. Know that we have marketers here, they’re going to love you for being open about it. What’s going on here? What’s going on, keeping you in this space? John: Okay, from my perspective. Okay so, initially it was self liquidation on the front, which is what I was telling you. It was the fact that we were bootstrapped, we didn’t have money to just like throw out there. We had to make sure we were earning enough money to cover our ads. And Russell had all the trust in the world in me, I don’t know why he did, but he did. And he’s just like, “Spend money, and try to make it self-liquidate.” I’m like, “Okay.” So we just had to spend money and hope that we got enough back to keep spending money. Andrew: And self-liquidate means buy an ad today and make sure that we make money from that ad right away and then software. John: Yeah. Andrew: And then you told, and then software’s going to pay overtime, that’s our legacy, that’s our thing. And you told me software sucks for selling. Why? John: Software sucks, yeah. Andrew: Why? Everyone who’s in info, everyone’s who in education says, “I wish I was a software guy. Software is eating the world, they’re getting all the risk back.” I walked through San Francisco; they think anyone who doesn’t have software in their veins is a sucker. John: I asked the same thing to myself, you know. I was running ads, I’m like why can’t I just run ads straight to the offer? Why do I have go to these info products? I want to get on the soft…. And then I was like, I feel like it’s kind of like marriage. Like it’s a big thing to say like, “You probably already built websites, but come over, drop everything you’re doing and come over here and build websites over here on our thing.” And it’s like, that’s a hard pull. But “Hey, you want to build webinars? Here’s a little thing for $5 to build webinars.” Now you’re in our world, now we can talk to you, now you can trust us, now we can get you over there. Andrew: Got it. Okay, and if that’s what it takes to get people in your world, you’re going to accept it, you’re not going to feel too good for that, you’re just going to do it and grow it and grow it. John: Yeah. Andrew: What’s your ad budget now? See now you’re eyes are lighting up. Now I tapped into it. John: We spend about half a million a month. Andrew: half a million a month! John: Yeah. Don’t tell the accountant. Andrew: Do you guys pay with a credit card? Do you have a lot of miles? John: Yeah, we do. In fact…. Andrew: You do! How many miles? John: In fact, the accountant came into my office the other day and said, “Next time you buy a ticket, use the miles.” Andrew: Are they with Delta, because I think you guys flew me out with Delta. John: Yeah, American Express is where we’re spending all our money. Andrew: Wow. And you’re a partner too? John: Yeah. Andrew: Wow, congratulations. John: Thank you. Andrew: I don’t know you well enough to ask you if you’re a millionaire, I’m just going to say congratulations. Give him a big round. John: Thank you. Andrew: Wow, you know what, I actually was going to ask the videographers to come up here. I wrote their names down, I got the whole thing and I realized I shouldn’t interrupt them, because they’re shooting video. But I asked them, why are you, they had this career where they were flying all over the world shooting videos for their YouTube channel. I’m sorry, I forgot their name, and I don’t want to leave them out. Russell: Dan and Blake. Andrew: They were shooting YouTube videos, they were doing videos for other people. I said, “Why are you now giving it up and just working for Clickfunnels all the time? More importantly, why are you so excited about it?” And they said, “You know, it’s the way that we work with Russell.” And I said, do you remember the first time that you invited them out to shoot something? What was it? Russell: It was the very first Funnel Hacking Live we ever had, and probably 2 weeks prior to that, one of our friends had an event and Dan had captured the footage, and he showed me the videos. “Did you check out my Ven Video?” I’m like, “Oh my gosh, that was amazing.” And I said “Who did it?” and he told me. So I emailed Dan and I was like, “Hey, can you come do that for Funnel Hacking Live?” And he’s like, “What’s Funnel Hacking Live?” So I kind of told him, and he’s like, “Sure.” And it was like 2 weeks later and he’s like, “What’s the direction?” and I was like, “I don’t know, just bring the magic man. Whatever you did there, do that here.” And that’s kind of been his calling card since. He just comes and does stuff. Andrew: Bring the magic. He wants to have those words painted on the Toronto office you guys are starting. Literally, because he says you say that all the time. And the idea is, I want to understand how you hire. The idea is, “I’m going to find people who do good work, and I’m going to let them do it.” What happens if they wouldn’t have done it your way? What happens if it would have gone a different direction? Russell: I see your question, and I’m not perfect. So I’m going to caveat that by, some of the guys on my team know that I’m kind of, especially on the design and funnel stuff, I’m more picky on that, because I’m so into that and I love it. But what I’ve found is when you hire amazing people like Todd for example, doing Clickfunnels. The times I tried to do Clickfunnels prior, build it was like, me and I’m telling developers, “here’s what to do and how to do it.” And like there’s always some loss in communication. With Todd, he’s like, “I know exactly what I would build because I want this product too.” And then he just built it and he showed me stuff. And I’m like, “That’s a good idea.” And he’s like, “I did this too.” And I’m like, “That’s a good idea.” And it’s so much easier that way. So when you find the right people, it’s not you giving them ideas, it’s them coming to you with the ideas. And you’re like, “that is a good idea. Go do it.” And it just makes, takes all the pressure off your back. So for us, and it’s been fun because I look at, man, the last 15 years of all those different websites and the ups and the downs, the best people have always stuck. So we’ve got 15 years of getting the cream of the crop. It’s kind of like, I’m a super hero nerd, but it’s like the Avengers, at the end of, when Clickfunnels came about we had this Avenger team of people. And we’re like, now we’ve put in our dues, now it’s time to use all of our super powers to do this thing, and it all kind of came together. Andrew: Build it and build it up. And then as you were building it up, you then went to Sales Force. You guys invited me, you said, “Hey Andrew, we’re in San Francisco, you’re home town. Do you want to come out?” I said, “I’m going to be with the family.” And you said, “Good. Being with the family is better than hanging out with us.” But I still said, “What are you guys doing in San Francisco at Sales Force?” Because sales people don’t need landing pages, yet you guys will probably find a way for them to need it. Then I saw this, this is the last video that I’ve got. There’s no audio on it. I want you guys to look at their faces as they’re looking up at these buildings, walking through the Sales Force office. Look, they’re getting on the motorcycles in the lobby. They’re looking all around like, “Oh gee.” Counting the buildings that are Sales Force labeled. Look at that! What are they doing? Not believing that this is even possible. And then just stopping and going, this is dream force. This is your dream. What did you get out of going to sales Force’s event and seeing their office? Russell: Honestly, prior to Sales Force, I was kind of going through a weird funk in my business, because it was like, again there was the goals. So it was like, okay, we’re going to do a million bucks, and then we did that. And then it’s like, let’s make 10 million a year. And then 50, and then this year we’ll hit a hundred. And like, what’s the next goal?  A billion, because a hundred million, 2 hundred million is not that big of a difference. And it was just kind of like, what’s the point, what’s the purpose? We’ve grown as big as any company that I know. And then last year, Dave and Ryan had gone out there and they were telling me stories like, “There’s 170,000 businesses here.” And they were telling me all these things, and it sounded cool, but I didn’t, and they were going crazy. You have to see this so you can believe it. But there’s something about the energy about seeing something that makes it real. So this year I was like, I want to go and I want to see Benioff speak. I want to see the thing, the towers, I want to just understand it, because if I understand it, cool. Now we can reverse engineer and figure out how we can do it. So for me it was just like seeing it. I think in anything, any, as entrepreneurs too, if you’re people believe that you can do it, you’ll do it. If you believe you can lose weight, you’ll lose 3eight. If you believe you can grow a company, and I don’t feel like I believed that the next level was possible for us until I saw it. And then I was like, oh my gosh, this is not ridiculous. Benioff’s not, none of these guys are any smarter than any of us. It’s just like, they figured out the path. It was like, okay let’s look at the path. And then let’s look at it and now we can figure out our path. Andrew: And seeing it in person did that for you? Russell: Oh yeah. It makes it tangible, it makes it like, it’s like your physiology feels it, versus reading a book about it or hearing about it. It’s like you see it and you experience it, and it’s like it’s tangible. Andrew: I told you, I asked people before they came in here, “What are you looking for?” and a few of them frustrated me because they said, “I just wanted to see Russell. I just want to see the event.” I go, “Give me something I could ask a question about.” But I think they were looking for the same thing that you got out of there. And I know they got it. I’m going to ask them to come up here and ask some questions, and I want to know about the future of Clickfunnels, but first I’ve got to just acknowledge that, that we are here to just kind of pick up on that energy. That energy that got you to pick yourself back up when anyone else would have said, “I’m a failure of a husband, I can’t do this.” Go back. The tension that came from failing and almost going to jail as you said, from failing and succeeding, and failing again. And still, that is inspiring to see. I want to give the whole Clickfunnels family a big round of applause, please everybody.

Mark Wellman is a nationally acclaimed author, filmmaker and motivational speaker. Despite being paralyzed in a mountain climbing accident, Mark has inspired millions to meet their problems head-on and reach for their full potential. A two-time Paralympian and former Yosemite Park Ranger, Mark's NO LIMITS philosophy encourages individuals to adventure into new horizons; to go beyond the seeming unreachable. Mark is used to being on the road since he travels throughout the year, bringing his adaptive climbing wall to companies, organizations, and schools. We caught him during one of his road trips and he agreed to swing by Golden, Colorado to the No Barriers podcast studio and catch up with his old friends, Jeff, Dave, and Erik. Mark is unbelievably accomplished but also reserved and humble. He talks about his legendary, groundbreaking athletic achievements with the same tone most use to describe what they had for lunch. But there was a time in Mark's life where he was unsure, depressed, and hopeless with no clear path ahead. Mark discusses his near-death injury that he sustained on a climb that left his paralyzed from the waist down. He spent months in the hospital unsure of how to go forward and lost. That was, until he received some wisdom. I had this one physical trainer, she was from Germany, and she said: “You need to train like your training for the Olympics!” And I just really took that to heart.” Mark first was determined to find employment where he could stay connected to the outdoors. So, he went back to school and got his degree in Park Management. He worked as a Park Ranger in various capacities, already shattering people's ideas of what he was capable of, but that was just the beginning. He soon discovered the world of adaptive sports and threw himself into learning more and designing his own adaptive equipment to get back out into the field. It was then he came up with the crazy idea of climbing the sheer granite face of El Capitan. He found a partner, built an ascending rope pulley system, and started to train. Now, folks of many different abilities have climbed El Cap, but until Mark, this was unthinkable. He pulled it off and became the first paraplegic to make the ascent. “Are you crazy to take this paraplegic guy up El Cap? Seems like a really stupid idea. Something could go wrong,’ but fortunately we didn’t really listen to that.” Mark went on to gain tons of media attention, made national and international news, met the President, lit the flaming torch up a 120-foot rope at the Paralympic games in Atlanta; a fun story he shared with us, and continued on to break even more records of athletic achievement, like being the first paraplegic to sit-ski unassisted across the Sierra Nevadas. Listening to Mark describe his epic achievements it's easy to forget he has a disability or about all the struggle that led him to this point in his life. But for Mark, it's about mindset. “I learned my disability wasn’t a death sentence - let’s get on with life, dude!” But Mark wanted to share what he learned with others. He details the spark of an idea he had with a friend that led to the formation of the nonprofit, No Barriers, and the humble beginnings of an organization that is now becoming a movement. He uses his time to speak to groups and offer inspiration, as well as lead hands-on adaptive activities that get people out of their comfort zones. “Let’s get out and enjoy life.” Read Mark's Autobiography Here Visit Mark's website: No Limits Learn more about No Barriers autobiography Climbing Back. The first paraplegic to sit-ski unassisted across the Sierra Nevada Mountain Range, --------------- EPISODE TRANSCRIPT ------------------------- Dave: Well welcome to our No Barriers podcast. We are thrilled today to have Mark Wellman with us, who's one of the founders of No Barriers. Can't wait to hear some of his stories about what this organization was founded upon. He's really the heart and soul behind why many of us are here at the organization. Before we get into that conversation, Erik, you just came back from a really interesting experience, why don't share with our listeners a little bit about it? Erik: [00:00:30] Yeah, I was at a conference with all these authors. There were four of us, and the first was a lady, she was the author of Hidden Figures, this great book that was made into a movie, these African American women who were behind getting us to the moon, didn't get any credit at first, but then their stories were really illuminated by her book. And this guy who is falsely sent to death row for 30 years. He was incarcerated- Dave: Wow. Erik: In a five by [00:01:00] seven room, had to kind of go into his mind and think about how to expand his mind. He said in his mind he married Halle Berry. They were married for 25 happy years. Dave: When was this set? Erik: Recently. Literally just got out of ... he got out of jail, no apology from Alabama. But he wrote this amazing book, so ... And then a lady who wrote a book called Beauty Sick, mostly [00:01:30] about girls who struggle with body image, and how much productivity is lost in the world because girls are having to pay attention to makeup, and weight, and all the things that they worry about. Guys too, but mostly the focus was on girls, and I have a daughter, so I was sitting there just hanging on every word, thinking about my daughter and her struggle, so it was really book because it was four very No Barriers... Dave: That's a lot of No Barriers. Erik: ...authors right there. [00:02:00] Maybe we'll get them on the podcast at some point. Dave: That sounds like perfect fit for the kinds of topics we explore. Erik: Yeah. And I am totally thrilled... this is great. I'm so psyched to have my friend, all our friends, Mark Wellman on the podcast today. Dave: The legend. Erik: The legend, the dirt bag... is that okay to say? Mark: Yeah, yeah. Dave: You embrace it, right? Mark: It's great to be here. I embrace everything. Erik: Mark almost doesn't need an introduction, but Mark is [00:02:30] a world class adventurer, and an innovator, and is the key founder of No Barriers. Has done amazing things that blow your mind as an adventurer. Has skied across the Ruth Gorge. Has traversed the Sierra Nevada mountain range. Has mountain biked the White Rim Trail. Has climbed El Capitan, Half Dome. We were just talking this morning, your Half [00:03:00] Dome ascent was 13 days? Mark: Yeah, it was. Erik: On the wall. Just, Mark, a hero of mine for sure. You're a few years older than me. When I was a teenager and you were just a little bit older climbing El Capitan and doing all these amazing adventures, you were a huge part of my motivation, so I'm psyched right now. Mark: It's great to be here, thanks a lot Erik. Yeah I guess I could [00:03:30] start off with... 35 years ago I was an able bodied climber and we were climbing a peak called Seven Gables, which is pretty close to the Mount Whitney area. We had a 20 mile backpack to get into the base, and this is back in 1982, I was 22 years old. My good friend Peter Enzinger and I were back there to do this climb. [00:04:00] We set up a base camp about 10,000 feet, and the next morning we got up pretty early, grabbed our technical rock climbing equipment and left most of our provisions at the base camp, our sleeping bags. Sure would have been nice to have that sleeping bag with us but didn't have it. And we climbed Seven Gables. It was sort of technical, kind of a mixed route. There was a little bit of ice, a little bit of rock, and made [00:04:30] the ascent. By the time we topped of it was a little bit late in the afternoon, about five o'clock. We just embraced this beautiful view from the summit. American Alpine Club places sometimes these cairns, or climbing registers, at the top of the mountain. It was kind of cool to see this. In this case it was just a pile of rocks with a Folgers coffee can. And I opened up the Folgers coffee can and dumped out the little pieces of paper, and there's my [00:05:00] hero Royal Robbins had climbed it. "Cool man, I'm gonna put my name next to Royal." Did that, and then we decided we're gonna go down a class four descent on the backside, just scrambling, not roped. We were just kind of walking down a tail of slope. I'll be the first to kind of admit my guard was down. My partner said, "Hey, maybe we should put a rope on [00:05:30] this one section here." I go, "No, no. I wanna get down to base camp, I'm really hungry. There's some really good freeze-dried food I wanna eat." You know that wonderful Mountain House stuff. Erik: And 35 years ago. Dave: Delicious. [crosstalk 00:05:44] Mark: So next thing I knew, I slipped on some scree, and I pitched forward and I started rolling. I made a couple of somersaults and I rolled off about a 100 foot cliff. When I landed I broke my lower back at T 11, T 12. Of course at the time I didn't know it. [00:06:00] I was 22, I didn't even know what a wheelchair was. That happened, and my partner thought I possibly could have been killed. But he heard me yell back at him. He got down to where I was... he said he spent a couple hours with me stopping some bleeding on my legs, and some other stuff. Jeff: What's your recollection of that period of time... Mark: He said he was with me for two hours, it felt like ten minutes. Erik: Right. Mark: And then he left. [00:06:30] He left an orange, an extra jacket, and some trail mix and said "Man, I gotta get out and get some help." So after 30 hours, the best sound I've ever heard in my whole life was the sound of this... [helicopter sounds] ...coming up the canyon. Erik: You almost froze to death. Mark: It was cold that night. Yeah it was real cold. I was laying on some ice. That probably helped because it kept the swelling down in my back. So I'm an incomplete [00:07:00] para. I have a little bit of movement in my legs. They said that might have helped me, the swelling. But the helicopter got up there, it was actually a ship from the Forest Service. They were gonna just go up and see if it was more of a body recovery, but fortunately I waved to them and the helicopter disappeared. About an hour later, a second helicopter came up and this time was from Lemoore Navy Base, and they did [00:07:30] a technical rescue. Flew in, brought the rotors within several feet of the cliff surface, lowered a navy medic, got me in a stokes litter, got me back up into the ship. I was down at a trauma center, they were cutting my clothes off, and a nurse said, "Who's your insurance company?" And fortunately I did have insurance, I had Kaiser. I went through stabilization of my back with Harrington rods. I was in the hospital in 1982 for seven months. Dave: [00:08:00] Wow. Erik: Including rehab? Mark: Including rehab and the whole nine yards. And nowadays, a paraplegic if you go to Craig Hospital, it's kind of the factory up here in the west. A paraplegic will be in the hospital for about six weeks. It's pretty dramatic... in those days, it was a much longer hospitalization. Learning how to take care of yourself. And then... Erik: More time is better, right? I mean, [00:08:30] would make sense right? You can develop more time? Mark: Yeah, a little bit. I think seven months was a little excessive. Erik: Right. Mark: But you know, there's a lot to learn. Your life has really changed. Your spinal cord runs your body, and you're paralyzed from your waist down. You have bowel and bladder issues. You have skin issues you have to be careful about. So all those things were really important, and I had this one [00:09:00] physical therapist who was from Germany and she goes, "You need to train like you're training for the Olympics." I just really took that to heart and started lifting weights. Was ambulating with long leg braces. This was sort of the beginning of the wheelchair revolution where wheelchairs weren't a stale piece of medical equipment, they were a lightweight piece of aluminum that was more of an extension of your body. And the wheelchair [00:09:30] could take you from point A to point B. Fortunately, in 1982 was really when these wheelchairs... they started making lightweight chairs. And I was a part of that. Erik: Not the clunky Vietnam-era things, right? Mark: Exactly. The old Everest and Jennings chairs were more obsolete, and they were using... well there was a woman who started Quickie wheelchairs, Marilyn Hamilton, she got hurt in a hang gliding accident. They took hang gliding technology, clevis pins, aluminum, powder coat. [00:10:00] And they kind of messier of manufacturing these wheelchairs sort of like... taking the technology from hang gliders and applying it to wheelchairs. Erik: We're still less than ten podcasts in here, but we've already heard a lot of stories of people... these No Barrier stories of people who go down deep into these dark places. I don't want to bring you down, but you have a lot of experience right now and so you can look back. You went to a dark [00:10:30] place, obviously. Mark: Yeah. It was close to saying goodbye to this Earth. Fortunately I made it through. I remember getting back into rehab, then I met a state rehab counselor who said, "You know Mark, you have this great love, this great passion for the outdoors, why don't you become a park ranger?" And I'm thinking, "How's somebody in a wheelchair gonna be a park ranger?" I'm thinking [00:11:00] law enforcement, search and rescue, and she goes "No, there's many hats in the National Park Service, or many different jobs." She took me down to Fort Funston where I met a ranger who kind of showed me the ropes and said "Hey, you could maybe do a job, this would be an entry level position, but you could help us plant dune grass and work in the nursery, or you could go to the entrance gate and help out there." [00:11:30] So I did that for a summer and then I went back to school and went to West Valley College and studied park management. Erik: Cool. Mark: And became a ranger at Yosemite. I remember my first job wasn't exactly my idea being a ranger. There I was sitting in this little kiosk, this little booth, at Big Oak Flat, the entrance to Yosemite. In those days it was a three dollar entrance fee and I'd collect the money and be breathing in auto fumes all day long. That really wasn't [00:12:00] my idea of being a ranger. But it was entry level. The next summer I went down to Yosemite Valley and started working at the visitor's center doing interpretation. Interpreting the natural processes of the park, the public. Bear management, geology, climbing was a big subject too. I'd give programs on climbing, talk about A climbing versus free climbing. Jeff: Were you transparent with people that would come through the park, with how your injury took place? [00:12:30] When you'd talk about the [crosstalk 00:12:31] Mark: I was, I was. I would start my climbing program off with my accident, actually. And bring that in, because I think that was a big part of it. They might say, "Well who's this guy in a wheelchair, what does he know about climbing?" I'd kind of bring that in. That was before I climbed El Cap, I was doing those things. Jeff: Were you percolating on doing something like that when you were there? Mark: I was. It's kind of an interesting story. There was a magazine called Sports And Spokes, it was a wheelchair [00:13:00] athletic magazine. On the front cover on that magazine was a DSUSA chapter, a woman who was being lowered down a cliff in a wheelchair on a river rafting trip. The river went over a waterfall, and then you did portage all the equipment around the waterfall. They had a swami belt and a climbing rope and they had a helmet, I guess they wanted to put a helmet on her for safety, sounded like a good idea. And they lowered her down this cliff in this wheelchair, [00:13:30] and it was on the front cover of this magazine, Sports And Spokes. I got the magazine at my little cabin in Yosemite and I had it on my lap. I was wheeling over to the visitor center to open it up in the morning, and I bumped into my future climbing partner Mike Corbet. And Mike's nickname was Mr. El Cap back in the 80s, he had climbed El Cap more than anybody else in the world, over 50 times. And Mike had never really talked about climbing to me because he knew that's how I got hurt. But when [00:14:00] I showed him this picture, Mike's eyes got really big, and he got really excited. He goes, "You know what Mark, I wanna start climbing with you, but what I really wanna do is climb El Cap." And we had no idea how we were gonna do it. Dave: That's great. Mark: That evening, we were sitting at the mountain room bar, we might have had a beer or two. Dave: Or three. Jeff: That's where all good decisions are made. Mark: Where all good decisions are made. So we had a little beer napkin and we started writing down notes. We said, "Okay, [00:14:30] we're gonna take a jumar..." A jumar is a rope ascender, this was back in the day, kind of like what Kleenex is to tissue. So we took a jumar, and we mounted a pull up bar and a jumar, and then we had a second ascender on a chest harness. And we put a rope up right by the Ahwahnee Hotel. Church ball tree. It was an oak tree. We had this rope and we started ascending up into the tree and then he'd lower me back down. So we go, "Okay, [00:15:00] so a paraplegic can ascend a rope using their upper body strength. Now to get on El Capitan, we got to actually protect your lower extremities from the granitic rock." We knew we were gonna be up there at least a week. I don't have feeling in my legs, so I really needed to protect my legs from any kind of abrasion or any kind of sore that could have occurred up there. We went down to this hardware store in Fresno, California outside [00:15:30] of the park. We bought some leather, a speedy stitcher, some closed cell insulation foam, and we just started making these rock chaps and they sort of evolved over a course of six months. We were climbing Jam Crack, Warner's... Erik: Weren't they... what was the material of those? I've felt your chaps before. That sound's weird... Dave: The truth comes out. Jeff: Hey, we're all friends here. Mark: The original [00:16:00] rock chaps were made out of leather and canvas. But the pair of rock chaps you felt were actually made out of some kind of silky material. No, no... Dave: Oh that was lingerie? Not chaps. Jeff: This was the first No Barriers improv meeting, what you're talking about, with your buddy Mike. Mark: Absolutely. Jeff: That was it, that was the genesis of what... fast forward to today, that was the beginning. What [00:16:30] year was that? 1980... Mark: That was 1988. Jeff: 88. There you go. Mark: Yeah 88. I was 28 years old. Erik: So if you think about it that way, No Barriers began in the Ahwahnee bar. Jeff: Yeah, on a bar stool. On a bar napkin. Dave: I know you guys are all dirt bag climbers. I'm not a dirt bag climber. For our listeners who are not dirt bag climbers, someone paint a picture, because we're getting to the El Cap story. Which is a phenomenal story. Paint a picture of El Cap for us, because not everyone knows what that is. Jeff: Yeah, well. El Cap [00:17:00] is probably the most revered, iconic, monolith in North America if not the world. Uninterrupted, over 3000 feet of granite. It is... when you're in Yosemite, you look up at it and it's got this perfectly symmetrical flank apron on both sides that comes out into this promontory called the nose. And [00:17:30] you can't take your eyes off it. If you look away for a minute, you have to look back at it just cause it's so magnificent and powerful. And it represents so much too. If you want to call yourself a climber, you kind of have to climb El Cap at some point. Erik: When you stand in the meadows below, which is just clogged with tourists just all driving by gawking. What I've heard, is you have to look up and up and up, way higher than [00:18:00] you think you have to. Dave: And if you see a person climbing, as a person who's not a technical climber speaking, you think "Those people are crazy. They're insane. What are they doing up there?" Jeff: Erik and I climbed El Cap. And his dad, Erik's dad, and future wife were down there in the meadow with telescopes watching us. We had one of those little lighty things, little sticks, and we were shining our headlamps down at everybody. It's [00:18:30] a magnificent thing, but it's also very intimidating. It can be very cool when you stand up and look at it, but then the idea of going and climbing it I think is a whole different story. Erik: And as a quote on quote gimp, and that's a word by the way that Mark taught me. I never even heard that word before. It's one of those words I guess you somehow have the license to use if you are... Mark: If you are. Erik: If you are in a chair or you are blind. So what did, when you talked about this out loud, what did people [00:19:00] think? Are people like, "You're nuts." Mark: Yeah, we had kind of a mixture of both. People that knew us, were "Oh yeah you guys should go do this." Mark's been training, he's always skiing, always riding his bike, hand bike around... well in those days it was more of a row cycle. And then we had people say, mainly not to me so much but more to Mike, "Are you crazy? Take this paraplegic guy up El Cap? Seems like a really stupid [00:19:30] idea. Something could go wrong." But fortunately, we didn't really listen to that. We just started training, we made these rock chaps. Like I said, they kind of just evolved over about a six month period. We kind of have a little circuit in Yosemite Valley that we climbed together. We did Jam Crack, the Prude, Warner's Crack, The Rostrum, we went over there. Erik: Oh, wow. Mark: So we did some stuff in the Valley [00:20:00] just to really warm up. And then I actually went up and spent a night on El Cap. Because we wanted to feel what that was like. Jeff: Up at sickle? Mark: We actually went to Heart Ledge. Erik: Wow. Jeff: Over on the south. Mark: Yeah, over on the south. The route we were gonna climb was a shield. So... Jeff: Cause it's overhanging. Mark: It was overhanging... once you get over the shield roof it's overhanging. The beginning of it's not. It's pretty low angle. Jeff: Were you scared at all before you did this or [00:20:30] were you just super fired up and kind of naïve? Mark: I was scared the night before. Jeff: You were. Mark: Yeah. Jeff: Like really scared? Mark: Yeah I was... couldn't sleep. This kind of what happened was... really Mike, about two weeks before we're gonna blast off, Mike goes, "Man we've trained so hard for this, I'm gonna write a letter to Tom Brokaw..." who is the national NBC News guy, who is a climber too, a little bit. And, I'm going, "Okay... " so basically [00:21:00] Corbet just wrote out a note with a pencil. He was a janitor at the Yosemite Medical Clinic to support his addiction to climbing. He just wrote a little note to Tom Brokaw, and I think three or four days later he's talking to... Tom Brokaw called the medical clinic and talked to Mike, and said "We want to come out and do this story." Erik: Gosh. Mark: And all of a sudden the pressure was on. That's when I really was thinking, "Wow you're telling national news, this is gonna add [00:21:30] a lot more pressure for myself." But as soon as we got to the base of El Cap and I touched that granite, all that training and preparation really got into par, and I got relaxed. I started doing pull up after pull up, dragging myself up the largest unbroken granite cliff in North America, El Capitan, and the first night... we do something called, we fix pitches. So we were fixed [00:22:00] up about 800 feet. So we had... Mike used to say, "It's always nice to kind of have a jumpstart." Erik: Right. Mark: You know, fix those lines, get all your water, we had 250 pounds... Erik: It's like a trail of ropes that go up 800 feet so you can just... Mark: The next morning... Erik: Start on the ground and zip up 800 feet and have like a jumpstart on this gigantic monolith. Mark: Exactly. And have all your water, all your gear up there. So he had to work three or four days to make that happen prior to us [00:22:30] leaving. Once we left Mammoth Terrace, we were on our own. We went through the Gray Ledges, and we went over... the roof was really tremendous. Because Mike is basically climbing upside down, and then gets up onto the pitch above it and fixes a rope. Then I kind of untied myself and I swing underneath that roof, and you can hear the cheers of the people down below. It's like [00:23:00] what Jeff was saying, It's quite a scene at the El Cap meadow. You really have to have binoculars. It's hard to see climbers up there, because they're so tiny, they're like little ants up there. If you don't know what to look for, it's hard to see these people. The crowd was yelling, and the green dragon would come by. It's a tour vehicle that has it's open air shuttle. Erik: "If you look upright you will see a nutcase [00:23:30] climbing El Capitan." Mark: We could actually hear them talking about "Mike Corbet, Mark Wellman, first paraplegic..." So that was kind of interesting. Finally when we topped out, it was seven nights, eight days of climbing. This was before digital technology on El Cap, when national news came out. They had a mule train, they brought out a satellite dish that was like five feet wide, and we were live on top of El [00:24:00] Cap talking to Tom Brokaw. Jeff: Sick. Mark: And we've got... between the Today Show and NBC News, and in a week we were on TV for like several hours if you took all the time that they played this. There wasn't really much going on in the news, so they really kind of played this story up in a big way. As soon as we got off that climb, about a week later, we're sitting in the Oval [00:24:30] Office talking to President Bush. It was myself, Mike Corbet, "Writtenaur" who was Secretary of the Interior, and Jack Morehead, superintendent of Yosemite. The four of us are in the White House, in the Oval Office, talking about bone fishing because President Bush loved to bone fish and we presented him with a flag that we took with us on the climb, and it changed my life. Erik: Mark, so you're not that old, but I see [00:25:00] you sort of as the father of adventur e sports for people with disabilities. I want people to understand that the idea to climb El Cap back in the 80s... nowadays, I think... how many people have climbed El Cap in chairs, paras? Mark: Oh the chairs? Erik: Dozens, right? Mark: Yeah, dozens. Erik: But you sort of unleashed that. You opened up this door. And now, quote on quote gimps are doing everything, right? Mark: Every summer there's [00:25:30] a paraplegic. Erik: But you opened that door for all of us. So, it's sort of a crazy thought to me. Mark: It is. You can't take the first ascent of El Cap, you can't take that away from me. That's something I'll always remember. It was a huge accomplishment for both Mike and I, and there's been different paraplegics who have gone up it. A gentleman with cerebral palsy, Steve Wampler, was probably the most [00:26:00] disabled person that's been up there. Lots of amputees. I call them amputees, hardly disabled. Paraplegics wanna be amputees. Erik: Those will be our first complaint letters. Dave: Exactly. [crosstalk 00:26:15] Mark: Quadriplegics wanna be paraplegics. Everybody has their differences. There's been a quadriplegic, incomplete quadriplegic, climbed El Cap with Tommy Thompson, good climber. [00:26:30] Steve Muse. Erik: There's that kid who climbed The Chief, he was inspired by you. Mark: Yep. Erik: He was a quad, and he climbed The Chief. He invented kind of this, almost like a contraption with wheels if I remember right, that kind of rolled up the face. Mark: Yeah it was... the premise was taking the Dolt cart. A climber by name of Dolt had this cart and he used to use it for a hauling system on El Cap. Brad "Szinski", the Canadian guy you're talking about, he came up with this [00:27:00] cart. His hands didn't really work as well as a paraplegic, he lost some muscle mass in his hands and fingers. So he had a different type of system where he could ascend a rope using a crank, and developed that. So there's been all kinds of different adaptations that allow people that are wheelchair users to go rock climbing. Jeff: This sort of set you [00:27:30] on this course to being an improvisational pioneer, those are my words. Were you like that always or do you feel like your accident cued you up for this opportunity to then over the past thirty years... Mark: Thirty five. Jeff: Yeah thirty five years. Now you've continued this trajectory of being this pioneer when it comes to just making it work. You make it work, right? Mark: I was so young. When I got hurt [00:28:00] I was 22. I wasn't climbing big walls, I hadn't got to that point yet of climbing El Cap. Finally, when I did have my accident it kind of made sense. The steeper the climb for somebody in a chair the better. Mountaineering is gonna be really tough. There are ways of doing mountaineering. We got four paraplegics on top of Mount Shasta. Erik: Yep. Mark: And there was a guy named Pete "Rikee". It's funny... people [00:28:30] come to me if they've got an idea, a lot of times they'll want me to be a part of the project. Least... Erik: That was a pod that they were in, that had almost like tractor wheels, right? Mark: Exactly. What we did is we took a snowmobile and cut the snowmobile track in half and made a tractor stance. So you have two tracks and a seat with a bicycle crank, and we actually crank our way up Mount Shasta. We had to get special permit from the Forest [00:29:00] Service. You can only be on Shasta for three days, and we knew we were gonna be up there for a week. So I had to drive up... I was trying to explain to this district ranger on the telephone, he really wasn't getting it. Erik: Sometimes they don't get it. Mark: And he wasn't getting it at all. He was thinking mechanical device... Jeff: Motorized... Mark: Right. He knew who I was, so he said "Come up and bring the machine with you so I can take a look at it." So I brought one of the snow pods up there and I met with the district ranger [00:29:30] and a couple of his back country rangers, and they got it. They said, "This is cool man, we'd like to let you guys do this." They gave us a special use permit. The big thing about the Forest Service and wilderness, or National Park Service wilderness, you cannot take... supposedly mechanized devices cannot go into the wilderness. But if you have a disability, your bicycle could almost be considered a wheelchair, or your snow pod can be considered [00:30:00] a wheelchair. Long as it doesn't have a Briggs and Stratton engine on it. That was the big thing, it has to be a manual piece of a gear that's human powered. So we got that, and we got four paraplegics on top of Mount Shasta. Erik: And El Cap really launched you into being able to do all these amazing things, right? You pretty much became a professional climber, adventurer, doing these things around the world. I know you lit the torch for the Paralympics, right? Mark: I did, I lit the Paralympic torch in Atlanta in 1996. [00:30:30] Muhammad Ali lit it for the able bodied Olympics. They had this torch, and the night before we're training for it... it's a big surprise, they don't want to see the person light the torch the night before, no media, so we're out there. I was gonna climb an 80 foot rope doing rope ascension, doing pull up after pull up. And North Face made me a little, kind of a... we envisioned this Robin Hood thing with... behind [00:31:00] my shoulders, this arrow quiver where I put the actual torch in. I didn't wanna burn my hair, what's left of it, so... Erik: You had a lot more hair... Mark: So I said, "Let's make this torch holder so it comes off your legs." So they made that for me. That night we're training, I get up the 80 foot rope, and I lit the fuse and the fuse blew out. Erik: Oh no. Mark: And the pyrotechnics guy goes, it was windy, and the [00:31:30] next day it was gonna be windy too. So the pyrotechnics guy guys... "Okay Mark, I'll make sure this fuse doesn't go out the night you do it." And I go, "Great." So I get up there in front of 80,000 people, I'm climbing up this rope. Liza Minnelli is singing this song and she's going "Go Mark, Go Mark." The whole stadium of 80,000 people is going nuts. So I lit this fuse, and literally the thing blew up. There was fire all over me. And I'm leaning back, hoping I'm not gonna catch [00:32:00] on fire. Then the fuse went up and lit the actual cauldron, and that was the start of the 1996 Summer Olympics. Jeff: You did not combust. Mark: I did not combust. I had the best seat in the house. Erik: You'd be like a Motley Crue drummer. Mark: Exactly. So that was fun. Erik: Takes us on a little tour of what you did. All those amazing adventures that you did after that. Takes us on a little tour around the world. Mark: What a lot of people don't realize, which I think is harder than climbing [00:32:30] El Cap, or spending 13 days on Half Dome was another big ascent we did years ago... but was doing the Trans Sierra ski crossing. I've done it twice now. I did it in 1993, it was a big winner, and I did it in 2011. So we took a cross country Nordic sit ski. You sit low to the ground, you have two skis mounted underneath a frame with a seat, and you're sitting maybe a foot off the snow. And you have two [00:33:00] poles, and you actually double pole. So you're double poling to make this device go down the trail. I was on the US Disabled Nordic Ski Team. Competed in two Paralympics, in France and in Norway. Got beat up by the Finns, the Norwegians, they're so passionate about that sport. Jeff: And they're vikings. Mark: And they're vikings, man. They're so tough. My best finish out of 30 guys was of fifth place, that was in France. [00:33:30] In Norway, I got even more beat up. I wanted to actually get into Nordic ski racing because I had other things I wanted to do. I wanted to try to get into the back country in a Nordic ski. Back in 93 a guy named Jeff Pegles and myself was also on the US disabled Nordic team. We took sleds, little polks, behind our rigs. We had our bivy gear. And we skied 55 miles from Snowline [00:34:00] on the east side of the Sierra on Tioga road, we got someone to open up the gate. Guy that worked for the power company opened up the gate. We got up to Snowline and we skied from Snowline to Crane Flat, which is 55 miles. Jeff: Wow. Mark: Following the Tioga road. Jeff: Just the two of you? Mark: Well we also had Pearlman with us too. Erik: Filming. Mark: He was filming, yeah. Erik: And, you gotta tell the story about the White Rim. So you biked the White Rim, I think you were on one off mountain bikes? Mark: [00:34:30] Yep. Erik: Or some kind of devices, hand crank mountain bikes. And it was so sandy, the story I heard, you had to get out and you had to pretty much pull yourself on your arms and pull your chair, did you pull the other guys chairs too? Or were the other guys' bikes... Mark: It was an epic, groveling adventure. Seems like everything I do turns into that. Jeff: Yeah. [crosstalk 00:34:50] Mark: If you're not suffering, you're not having a good time. That's kind of how it is out there. We had these one off mountain bikes and [00:35:00] we actually did a Jeep tour to kind of check it out a couple years prior. We did have it a little easier, we didn't carry all our water and food with us, we had a swag wagon out there. Suburban, follow the four paraplegics. Myself, Bob Vogel, and Steve Ackerman. We rode this, 52 miles is the full circumnav of the White Rim. There was times, [00:35:30] yeah, it was an interesting experience out there because some of these washes were like moon dust. We couldn't get our bikes through it. So I had a pair of rock chaps with me and I threw the rock chaps on and did some crawling. Had an 11 mil static rope and dragged the guys behind me. Did a few epic things like that. Jeff: I mean, If I'm riding my mountain bike and I come up on that scene in the middle of the White Rim, who knows what to make of that? Mark: [00:36:00] You can walk man, so best thing to do is just walk your bike. Jeff: Like, "You guys are good right?" and they'll be like "Yep, we're good man." Erik: Leave us alone. Jeff: Leave us alone. Mark: Don't touch me. Jeff: There's nothing to see here. Yeah. Erik: Yeah. Jeff: Wow, that's rad. Mark: And then recently, just a couple of years ago... in the winter we had a drought in California and Tahoe, so I circumnaved Lake Tahoe in a kayak in winter. And that was a really amazing adventure. It was 72 [00:36:30] miles, two nights of camping. But the cool thing was, and it was cool at night, it was really cold at night. There was no power boats. In the winter you don't have any power boats on Lake Tahoe, it was kind of like being out there in the 1800s. Seeing bald eagles, none of the tourists were on the water, it was really a fantastic trip. Dave: So Mark, you are someone who really embodies the spirit of No Barriers and you helped [00:37:00] start the organization. So tell us, all these adventures, all these things you've done to challenge what's possible, what people think is possible. Why No Barriers? Tell us that story. Mark: You know, No Barriers... I did a movie called No Barriers, and I got a poster out called No Barriers. It was a word that really meant a lot to me. My wife and I, we were down in San Francisco at a fundraiser... in those days it was called Yosemite Fund, now it's called Yosemite [00:37:30] Conservancy. We were at this dinner, and I met this kind of wild old character named Jim Goldsmith. And Jim came up to me, knew who I was... we started talking. He had a cabin in the subdivision I live in called Tahoe Dawner. So Jim and I, and Carol, and his wife Connie would get together, we had a couple of dinners together. And then Jim started talking about the Dolomites, and his [00:38:00] son-in-law and daughter. And he said, "Man, it would be really neat to kind of do something for disabled people and able bodied people if we did something in the Dolomites." And I go, "Man, I know a couple of guys who I've done some stuff with, a guy named Hugh Herr, double amputee who's done some rock climbing with him, and Erik Weihenmayer." This was probably after your Everest... Erik: Yeah, after. Mark: This was after your Everest climb. And I said "Hey, these [00:38:30] guys..." we did a climb out in Moab Utah, the three of us, it was kind of gimp helping gimp, it was this real magical event out there. Which was really cool... Erik: Climbing the Fisher Tower. Mark: Yeah. The Fisher Tower. Ancient Ark. Erik: Mm-hmm (affirmative). Mark: And it was this really fantastic climb. I'd like to get these two guys involved with what we're talking about. SO I called Erik, I called Hugh, and we ended up putting our first [00:39:00] little... in those days, it was more of a festival, we called it, instead of a summit. We did it in the Dolomites. It was a very obscure little place up in the mountains, this real beautiful location, but nothing was really accessible. The hotels weren't that accessible, everything was kind of difficult to put this together. But it was this real magical place in the mountains... Erik: I remember the chair operators didn't even know how to get people with disabilities on the chairs. Mark: They didn't have [00:39:30] an idea. They didn't... yeah. Erik: On the ski lifts. Thank you. Yeah. Mark: They weren't doing adaptive skiing in those days in that little village. It was actually the home of the 1956 Olympics. SO that was kind of my envision was to start this, and who knew it was gonna get into what it is today. It's just amazing what you guys have done, and all the different things No Barriers has to offer people. Erik: What do you think about when you think about the evolution? You had this little germ [00:40:00] of an idea to go to this town and start talking about accessibility and innovation, and some of your lessons about how you've broken through barriers, or how the three of us had broken through barriers. And now, when you look at it today... Mark: [sighs] It's kind of mind boggling how it's grown so big and how many different people it affects, it's not just the disabled community, it's able bodied community bringing everyone together. Trying new experiences. The youth programs [00:40:30] that you guys have been doing is tremendous over the years. Soldiers to the summit. We're having all these guys coming back doing ten tours, they're not adjusting back into society very well, and taking them out into the outdoors with Jeff and different mountain guides, it just changes their lives. Brings them more back into a reality where they can really kind of adjust back into society. And then the summit is just... I love [00:41:00] coming to the summits. I've been to every one now, I haven't missed one since the beginning. It's gonna be fantastic in New York, I'm really looking forward to that. Erik: And you bring your climbing wall, your portable climbing wall. Mark: I'll have... Erik: Almost to every summit. So that's your mission now, right? To go around and use your climbing wall as a No Barriers tool to help people break through barriers. Tell us about that. Mark: Absolutely. Climbing has been such a big part of my life, that I just like to introduce different [00:41:30] people to the sport. A lot of times, somebody that's... we don't say electric chair, electric chair is something you die in. Power chair. A power chair takes you from point A to point B. A power chair user, a lot of times doesn't have all the... there's not as many things out there for a power chair user to participate in. Climbing on my wall, they can. We have these harnessing systems [00:42:00] that support your core. It's almost like a Bosen's chair, pulley system. If you have the desire to get on the climbing wall, we can facilitate that. We don't turn anybody away. We've had people that weigh 500 pounds on my wall before. Very obese wheelchair users... it doesn't matter. I had a gentleman that had spina bifida and he was unfortunately caught up in the American society of drinking a lot of soda, [00:42:30] and became really big. We got him on the wall, it was really difficult for him. We would talk to him and he wouldn't really look at you eye to eye as we were talking. I saw him a year later, he dropped 150 pounds, quit the soda, got into a training, cut his hair in a mohawk, and it just changed his life. Got out of the power chair and was in a manual chair. So climbing was kind of the responsibility of really changing this guys life, and now I see [00:43:00] him down in Los Angeles. I probably take the wall to Southern California maybe seven or eight times a year, San Francisco, Bay Area. I sort of have different groups hire me year after year, once they experience the wall they really want to have it be part of their event. We bring in, mini El Cap I call it, and we get people on it and we have a great time. Erik: And you're traveling around with your wall, full time. People bring you in to create this experience for their [00:43:30] rehab hospital or organization or team, right? Mark: Exactly. All those venues... I do adaptive climbing seminars. So a gym might call me and wanna know, "how do we get an adaptive climbing program going?" So I do that. And a lot of times I'll do not only a seminar on adaptive climbing, but then maybe that evening do a show and tell about adventure sports and where adventure sports have taken the disabled in the last 35 [00:44:00] years. Erik: And you are like Kleenex now, because... you talk about the pulley system, it's not a pulley system, pull up system, a lot of people say, "Oh yeah, Mark Wellman system." Mark: Yeah, it's... yeah it's kind of getting that way. Jeff: You're like Beyonce now. Mark: I'm like Beyonce. It's just kind of neat that my passions over the years... everybody should have a passion. And my passion has always been [00:44:30] to be out camping, doing something in the outdoors, coming up with new ideas, new technologies... and some of these technologies are more like a backyard technology. It's not that fancy. Sometimes some of the most simplest things can change something. Like mountain bike tires on a wheelchair can change a chairs getting into the back country tremendously. Mounting a pull up bar in a sender can allow a paraplegic [00:45:00] to do 7000 pull ups in eight days to go up El Cap. Just simple little technologies can really change peoples' lives, and you can take that backyard technology, garage technology, put something together that works for you that can help a whole bunch of people. Dave: I'd like to go back to that... You've told us a story, sort of the arc of your life, and when I look at you Mark and think about what you've accomplished I think "God, this is incredible. [00:45:30] This is an incredible human being that very few people who had what happened to you would ever have chosen the path that you have chosen." And I think, when I think about our No Barriers community, every so often you get folks who will say "Yeah, that's Mark Wellman but that couldn't have been me. You're putting someone in front of me that's so incredible, how could I possibly do this?" Erik: Yeah, you're de motivational. Mark: Right, right. I know, I get it. Dave: I'd love to hear, what do you think we can... 'cause this is what we do at No Barriers. We... If you're [00:46:00] listening to this, it's not like we take everyone up mountains, but we try to remind them about something in their spiri t... Mark: Yeah. Dave: ...that teaches them anything is possible. So talk to us a little bit about, Mark, how did you get to that point? Is it just sort of who you were from the beginning, was it an evolution? It just seems like everything you encountered, you are like, "I can do more." Mark: I think it's really important for people to get out of their comfort zone. Nowadays, it's so easy for young people to get... they get into gaming. And they [00:46:30] just, you know... it's stagnant. You're not getting out of your comfort zone. And the outdoors has a way of getting you out of your comfort zone. And you can make it safe... you don't need to think about what I do, it's more about finding, maybe getting some different experiences. And that's what's so cool about the summit. You have all these different activities going on where you just get a little taste of it. And hopefully [00:47:00] that little taste will inspire your imagination to want to try it again. And that's where I think it's really important if you're facilitating skiing or climbing, or whatever you're facilitating, you have to make sure that these people, their first experience is a good one. If they don't have a good experience, most likely they're not gonna go back to it. And, it's really important that the very first time... One of our board members, Sasha. [00:47:30] He was an academia guy, a professor. He came to the No Barriers event in Squaw Valley, the first one. Never had tried climbing before, and we took him to Donner Summit and got him up on this road cut climb that's 80 feet with big exposure, and it changed the guys life. It was something he was real nervous about, but it was getting him out of his comfort zone, and him [00:48:00] really having, you know... it was exciting for him, it was thrilling, it was challenging not only physically but mentally challenging at the same time. All those things combined. Kind of changed his life. And he became a board member of No Barriers because of that. Dave: Yeah. Mark: And there's stories like that all the time. Or Mandy, I remember her... wonderful singer. She got on my wall, it was 25 feet, and she [00:48:30] was really scared. It was a really scary moment for her where she had this big fear of heights. It wasn't like she was on a 1000 foot rope, she was on a 24 foot wall. But she might have well have been. Jeff: Relative for her. Mark: Could have been a 1000 foot climb. But she made it through. And came down... I got a guy that helps me, Wes, he's a search and rescue guy, kind of a big guy. He's just magical with [00:49:00] people, and really helped her a lot. So, you have all these different experiences... Erik: And I think that experience, by the way, gave her the courage to go out and do something completely non-climbing related, which was to write music and to go on to America's Got Talent, and... Mark: Exactly. Erik: Get into the finals, and now skyrocket into stardom. Mark: To fame. Absolutely. Making a better quality life for herself. [00:49:30] A lot of times when you say, somebody that's a wheelchair user... what is it, like 90 percent of the people in wheelchairs don't have jobs. And it's always kind of bummed me out, I'm thinking, "Wow." Why would you wanna be caught in a system like with Social Security and be basically poor your whole life, because "Oh I have Medicare, I have my Social Security disability," So you're trying to live on six to eight hundred dollars a month. And you're caught [00:50:00] in this kind of vicious circle. You've got to get away from that somehow, and get into the workforce, be productive. You're gonna feel better, you're gonna be a more productive citizen in this country, and you're not gonna be wrapped up in this vicious circle of never getting ahead and always having the government thumb you down, so to speak. Erik: Last question for [00:50:30] you from my end, this is Erik, and I wanna know, I've made it kind of clear that I look up to you. Tell me, who are the people that you look up to? Tell us about that guy Larry, tell us about some people who influenced your life. Mark: Oh man. There's been a lot for sure. There was a guy named... actually I think you're thinking of a guy named Mark Sutherland. When I first got hurt, Mark was a quadriplegic ten [00:51:00] years post to my injury. And he was back in the hospital. He had a bone spur, the spur was touching his spinal cord, and he was losing some of his action. Some quadriplegic can move their arms and they can push manual chairs, and he was one of those. But he was losing some of his arm strength, so he was in the hospital, and my room was next to his. We would talk at night. 'Cause I was really bummed out when I was first injured. To me, being a paraplegic was a fate [00:51:30] worse than death. I was on the sixth floor, if I could have crawled over to the window and jumped out I would have cause that's how bad I felt. I was just thinking, "Not having the use of my legs, I'm not gonna ski again, I'm not gonna climb." I was 22, I was just like, "Why didn't the mountain just take me." Those were the kind of thoughts I was having. But then I would go into this guys room, Mark Sutherland, and he would talk about, "Oh I had this milk truck that I converted, and I had a stool. One time I was driving it with my hand controls [00:52:00] and I fell off the stool, and I was on the ground and I had to throw my hand on the brake to stop it so I didn't kill anybody." Jeff: And you were like, "That's the greatest story ever." Mark: Yeah. I wanna do that. So I was just hearing this stuff from this guy, and he was talking about girlfriends, and how he was running around doing this and doing that, and I'm going, "Man, this guy has a life." And it was really inspiring to be... so where I was really depressed and laying in the hospital bed, and couldn't feel [00:52:30] my lower extremities, and "What's a catheter?" And I'm just like, "Man, this is horrible, what did I get myself into." And this guy was really upbeat and uplifting... Jeff: Showed you it wasn't a death sentence. Mark: Yeah. Showed me it wasn't a death sentence, and let's get on with life, dude. And it was like, boom. That just changed me. Then we went into rehab together, we were more in a hospital setting and then we both went into our physical rehab. That's [00:53:00] when it just started clicking for me, and that was it. Dave: Well, just to wrap up this excellent conversation that we're having about the history of No Barriers and all that you've done as well just individually, you've seen No Barriers be this thing that started in the Dolomites in 2003, we're 15 years into this. What's your dream for what it becomes? Mark: Wow. I would just consider it to be... I'd like to see maybe a couple summits a year, possible. [00:53:30] More, smaller clinics would be really cool too. I think you guys are really on a good, good path. But maybe some smaller events too. Just keep growing it. Keep doing more of these kinds of things. More technology. Bringing in more people, better speakers. Better people that are... or people that are doing more things that inspire others that give the ideas [00:54:00] to do more things. I'm amazed in 15 years where it's come to. Who knows where it's gonna go. Another 15 years from now, man this could be a huge, huge organization that could affect a lot of people and bring a lot of people together. This whole family, bringing the tribe together. It's always fun at the summits, and seeing people I haven't seen for a year, [00:54:30] spending time with them. I love getting people out climbing, so that's my passion. Erik: What if people want to learn how to get in touch with you, how to work with you, how to bring your wall to their organization? Mark: Yeah. Google Mark Wellman or just go to my website, No Limits Tahoe dot com. Give me a call. Erik: Although they won't talk to you, 'cause you're never home. You're always out [crosstalk 00:54:55] or something. Dave: Always on the road, right. Mark: Well, no, yeah I'm easy to get a hold of. Talk to my wife, Carol, [00:55:00] and I can get back to you. Erik: Right. Mark: Send me an email. I'm better on the phone, I don't like to email tons. Love to talk to you, if you have ideas lets talk about, lets see you at the summit. Lets get out and enjoy life. Erik: Cool. Well thank you so much Mark. Jeff: Listen Mark, I know you well enough to know you don't need to hear what I'm about to tell you, but, I think it's important for you and the listeners to know [00:55:30] in conversations like this, it becomes so clear how you are sort of the upside down pyramid. And you're the point on the upside down pyramid. And it all sort of funnels up from you, really. And I know there's others, but you're the man. And I know it's important for you, it is important for me to know that you know how many thousands of lives you've impacted. Erik: Tens of thousands. Jeff: Thousands of lives dude. You have been the kick starter [00:56:00] and the imputes. And you're just one of the most wonderful pioneers. I know you know it, but you need to hear it more, because you're the man. Mark: I appreciate it man, it's humbling. And, to take a passion that I had and a dream... and like I said, just simple adaptations, a pull up bar on a jumar. Man, how that changed other people to go climb up El Cap, or do Castleton, or whatever [00:56:30] mountain you want to get up, it's been a pretty cool experience. It's been fun to work with other companies. We're making more adaptive climbing equipment now. It's really kind of evolved from just handmade rock chaps to a real sophisticated pair of rock chaps that allows people to get out there and do a lot of cool stuff. Dave: Well it's been an honor to have you here Mark, I know many of our listeners are part of that No Barriers tribe. Many of them will know you, but a [00:57:00] lot of them won't. The movement has grown so big that it's well beyond you. But per what Jeff was saying, it's so important I think for the people of our community to know where this began. Mark: Mm-hmm (affirmative). Dave: And you are the point that Jeff mentioned where it began, and so, thank you so much for joining us, we appreciate having you. Mark: My pleasure. Erik: What did you guys take away from that? Might take us a while. Dave: Yeah. Exactly. Jeff: Might be a lengthy debrief on that one. Dave: I guess for me, as someone who's helping to build [00:57:30] this movement, like I was ending with there, just to remember the roots of where No Barriers began which is individuals coming together in small communities around creative ideas to do stuff that people didn't think was possible. And as we start to move to tens of thousands, maybe millions over the next ten years of people that we impact, that there's something in that special sauce that's still about the [00:58:00] individuals getting together having a fun, creative idea and going out and pushing their comfort zone. Erik: Yeah. I think that, No Barriers recipe is sort of hidden right in the story of El Capitan, which is... Mark's a smart guy, but he's not a scientist or anything, he's not Hugh Herr, who's inventing stuff where you go, "I could never do that." What he said is a pull up bar and a jumar. These are commercially available things. I think he had to adapt a few things, but [00:58:30] not all that crazy technology. Pretty simple. You combine that series, that innovation with the human spirit and a great friend or great support system, a great rope team, you do this amazing thing that opens up the door for a lot of people. It's a pretty simple recipe. Dave: It is. Jeff: All the big things that have happened with regards to our species all started with this small [00:59:00] germination of somebody sitting in their theoretical garage just being like, "How do I do this? Hmm?" And head scratch, and start piecing these things together, and then, boom, the movement begins. I think Mark embodies that, and what a great cornerstone for this organization. Dave: Well, and the movement continues. So if you're sitting there listening saying, "I wanna be a part of this organization, I wanna be a [00:59:30] part of No Barriers," please go to our website, No Barriers USA dot org. You can join us at the summit that Mark mentioned that's coming up in October in New York. There are many more ways you can join us but please, No Barriers USA dot org is our website. You can also share our podcast with your friends and colleagues and families, and follow us on our Facebook page. Thank you so much for listening. Erik: Live No Barriers. Dave: Thanks.

Debbi Mack interviews crime fiction author Dave White on the Crime Cafe podcast. The transcript is below, if you'd like to read it. Debbi: Hi! This is the Crime Cafe. Your podcasting source of great crime, suspense and thriller writing. I am your host, Debbi Mack. Before I bring on my guest, I'll just remind you that The Crime Cafe 9 Book Set and The Crime Cafe Anthology are on sale at all major online retailers for $1.99 and $.99 respectively. So, just go to my website debbimack.com. That's debbimack.com and click on Crime Cafe and you'll find the links for the books, as well as how to subscribe to this podcast. And with that, I'd like to introduce now, it is with great pleasure that I introduce now my guest, Dave White; the highly acclaimed Dave White. Dave: Hello. Debbi: Thanks for being here Dave. It's great to have you on. Dave: Thank you. Thanks for having me. I've been looking forward to this for a while. We've been talking about this for a while, so this is nice. Debbi: This is awesome! I'm so glad you could be here because I've seen you so often at conferences and I'm such a shy person, I don't know why I didn't just walk up to you and say, “Hi Dave, I'm Debbi”. Dave: I'm shy too. It takes a lot for me to introduce myself to people, so I get it. I understand. Hi Debbi! Debbi: Hi Dave! And you're from New Jersey. I am originally from New York, so that's all the more reason why would should know each other. Dave: Exactly, exactly. Debbi: So, you're the author of the sixth book so far series, correct? The Jackson Donne books. Dave: Right, there are five Jackson Donne books and one standalone called Witness to Death. Debbi: Oh, Okay! That's a Jackson Donne also then? Dave: No, Witness to Death is a stand….wait, now I gotta count my books. There are six books total and five Donne. Debbi: Ok, five Donne done. Dave: Yes, exactly! Debbi: So, tell me a little bit more about the character Jackson Donne. Dave: Jackson Donne is a, we can go through a long history here. He's a former private investigator. In the first novel, When One Man Dies, he was a private investigator, mourning the death of his fiancé and asked to solve a hit-and-run where one of his close drinking buddies was killed. And from there, the series kind of grew because Donne clashed with his former cop partner, Bill Martin, several times throughout the series and Martin kind of became an arch enemy for a couple of the books. Since then, Martin took Donne's private eye license, got it taken away, Donne kind of became a freelancer and tried to go back to college and he was very much like, you know they pull me back in. Every time he thinks he's out of the private eye or the crime business he gets pulled back in. He's been on the run to Vermont at one point. He was in prison. He's had quite the five-book life. Debbi: Oh my goodness! I was going to ask you about his journey as a character. It sounds like he's had a rather rough one. Dave: Yeah! Debbi: I think of this right away. His fractious relationship with the police. What was it that caused that rift between himself and the police? Dave: In the books, Donne was a narcotics agent with…there was a New Brunswick police narcotics committee I guess you would call it as part of the police force and they were corrupt. They were stealing drugs, they were doing drugs, they were skimming money off the top anytime they busted someone up and what Donne finally realized was he was going down this dark hole, he became a drug addict (that sort of thing), so he turned in the narcotics force; everybody except his partner, Bill Martin, who he kind of let off easy. He kind of destroyed the narcotics force, but Martin was able to keep his job. The rest of them went to prison and Donne left and become a private investigator. So that's kind of what started it because now all the cops kind of hate him for turning in these guys and Martin really holds a grudge because...

When Barbara Felix started her business, Felix the Cook, over ten years ago, she was looking for a way to provide for her family, while doing something she loved. Finding her sweet spot with custom-made sugar cookies, Barbara has attracted big name clients like Google Ventures, UPS, and The Four Seasons. How can your business do the same? Listen as Barbara shares her best secrets for attracting and delighting clients. Find us on Stitcher You can also read the transcript below: Small Biz Stories is brought to you by Constant Contact. Constant Contact is committed to helping small businesses and nonprofits connect to new and existing customers with email marketing. You can be a marketer, all it takes is Constant Contact. Find out more at ConstantContact.com. Barbara: I've spent plenty of time working in offices thinking, “How can I get out of here?” I am not a paper person. I don't care what industry it's in, I cannot stand sitting behind a desk. So with cookies, I just love being the boss and being the creative person. I get physically ill if I cannot create something. Dave: Meet Barbara Felix, owner of Felix the Cook. Like so many businesses owners, Barbara became her own boss to avoid a boring, cookie-cutter career. Starting a business of her own, Barbara has the freedom to spend her days as she likes — which in her case means delighting customers with custom-made sugar cookies. If you've ever wondered if you have what it takes to start a business — or if you've already started and you're wondering how to take things to the next level, listen up. Today, Barbara shares her secrets for how a one-woman operation can use customer relationships to land big-name clients like Google Ventures, UPS, and The Four Seasons.More than fifty percent of small businesses fail within the first five years. These are the stories of those who beat the odds. My name is Dave Charest and I'll be your host as we share the stories of some of the bravest people you'll ever meet, small business owners. You'll hear how they got started, their biggest challenges, and their dreams for the future. Dave: Many small businesses start with a combination of passion and necessity. When Barbara started her business over ten years ago, she was looking for a way to provide for her family, while doing something she loved. Listen as she describes her early attempts at finding the right fit and how an early mentor helped point her in the right direction. Barbara: Well, my dad was a cook. My dad always cooked at home. And I loved to play in the kitchen. I loved making things and my mother let me do whatever I want with butter, sugar and flour. So I have absolutely no fear of sweet stuff. And I grew up, got married, got divorced and decided I needed a career because I've been to high school, of course, but not much college. So there I was, a single mother with two children looking for something to do and I thought well, maybe I can take a cooking class and instead I decided to take the full program at the California Culinary Academy and do 16 months and come out as a chef. So I worked at a really fine restaurant for a couple years and then found it was just too difficult as a single mother to keep the hours of a kitchen, which were pretty brutal, and mind my kids. So I quit that and got into private chefing after a stint of making desserts for restaurants. There were a couple of small restaurants I worked for that didn't have the time or the space to do their own pastry. So I'd do that for them. Again, pastry was always my favorite. And with the kids, I would make cookies with them every holiday like Halloween. I can't get over it. That Halloween, I made black icing, my son was in heaven with black icing everywhere. So we'd do that and then one year one of my instructors was at the house for Christmas and she saw my cookies and she said, “Oh my God, Barbra, you have to sell these.” I said, “Really?” So because I trusted her, I pursued the cookies. I was private chefing at the time and I asked one of my clients what she thought. She suggested I get a year of cookies. So that was a great idea. So I designed 12 collections with 6 designs each to make up a dozen cookies for every month of the year, and got connected with a web designer, who started with that page, our cookies of the month. And from there it just grew. It was very word of mouth, very word of mouth. Dave: So, just talk us through kind of that inspiration for doing the cookies? Barbara: Oh! The inspiration was I can do this, and it's fun and people pay me! That's what it was. And that having someone whose opinion that I trusted told me they were wonderful. That's what I needed because I get in my own little bubble where I can't see outside. And if you go on cookies websites, it's amazing what people are doing. They're total artworks. And if you look at that, and then look at what I do and it's like, well I'd never measure up. The funny thing is, is that they're doing the same thing. Everybody is comparing, which is silly. But I wanted a way to make some money that wasn't as difficult, as private chefing can be. I wanted to do something that I was entirely comfortable with, which is pastry. And it's a fun job and it's a happy job. People are so happy when they can get on my schedule. They are happy to order their cookies they're anticipating, and they're happy when they get them. So I like happy uplifting things. That's why, I'm not curing cancer but I'm making people happy, nothing wrong with that. Dave: With cookie-making, Barbara found the sweet spot she was looking for. Now, she had to find something just as important — a loyal customer base.  Luckily, this wasn't Barbara's first business. Through her past endeavors, Barbara already had some ideas about her target market, what they wanted, and how best to reach them. Barbara: Now, I spent some time in Texas for 10 years and I had my own business there as well, making curtains and drapery and shades. And my first customer was a junior-league lady and I had learned very well. You tell a junior league lady, you're set because they all tell each other, they all call each other. So with that experience, with the cookies I thought, I got to donate to the junior league. And I did the same thing. I picked a couple different charities and I'd make a significant donation and people started calling. And that's how it started, with donations, because I had to get the word out. Dave: Did you set any goals for your business when you were first getting started? Barbara: Oh, I wish I could say yes! I wish I could say I followed my business plan to the T. I did not. My goal was to make some extra money. I'm a single mother with two kids, money was the ticket. So, with the help of friends, I thought it was important to get a website together and that was my first goal to get all those 12 months of designs made. Then to set up a photography booth or some way to get…I bought my first camera to do the photographs, my first little instant camera. And, to set up a business account, I set up a checkbook. The goals were very small and then to find charities where I could donate because I knew that's where my market was. See, I knew, from my experience of having my business in Texas, I knew what these ladies wanted. I knew what they were looking for and knew where they were. I knew my market. And I knew what they needed. And that's how I did it. Going for the upscale charity events and contacting people I knew in that area. Dave: What would you say makes your business different from others out there? Barbara: I would say the service. I mean, they love the taste of the cookies, there's that. They love the cookies, they love what I do. But I've had people tell me, “Oh, you're so flexible, and thank you” And it's personable, you know, people get excited when they can talk to the person who's actually making their product. It's not going through several layers. In fact, a few years ago, well in 2004, Gwyneth Paltrow put me on her Goop website for Christmas. And that's because I knew her driver. A friend of mine drove for her. I didn't even know he was driving for her but that was my connection. And I got a lot of orders and one person called to check on her order and it was so funny the way she spoke. It's like, “Can you go down on the factory floor and find the order?” and I said, “Ma'am I'm making your cookies.” And they're so excited. They're very excited to talk to the person. So I think that's it. There's no filter between me and the client. They call or they email or they talk to me. And that's the way I like it. And even as I grow, I don't know that I'll give away that part of the business. I think I'll still be the contact person. Dave: Barbara's success comes from giving her customers an experience they can't get anywhere else. By listening to her customers' advice, Barbara creates relationships that make other people feel invested in her success. It's no surprise that many of Barbara's best new customers have come directly from her existing customer base. Dave: Yeah. Is there, is there some place that you go for advice or guidance? Barbara: Oh gosh, yes! Gosh, yes! I guess I'm just a friendly person. But I know so many people who seem to be more successful than I am and their always eager to help me. I have one friend I met when I was doing cookies for a charity function and it was being held at Pixar. It was a very big deal and I got to see the Pixar office. I got to look at an Oscar, like two feet from my face, a real Oscar. That woman moved on to another company and another company and she's taken me with her every step of the way. So I've made cookies for her at every company and she's very into computers and marketing. And she helps me and she gives me ideas. Another friend of mine, again, it's a friend of a friend. He asked me if I could deliver cookies to his friend who manages a very big jewelry store downtown. And because of the timing, I thought, “Oh I'll just take him in myself.” And that was like a perfect thing to do. The fellow loved meeting me, he loved the cookies and he has sent me business and he has sent me a wonderful event planner that I work with constantly. And he's my buddy. He brings me to different events, he suggests things to do. He's got me working on a chocolate cookie now. He's determined to have a chocolate cookie place card with gold lettering. So I have ordered. I have been through the web top to bottom looking for a specific edible gold luster, which I've acquired. It's in the mail to me now. So they guide me, they tell me what you can do. Another friend of mine works at LinkedIn and he's helping me use that to meet other marketing people in different companies because that's where the cookie orders from companies come from. So, yes, I don't know, people like me and they talk to me and I talk to them and we chit chat. And yes, I have plenty of advisors. I've made cookies for Google Ventures and they're still customers. I did cookies for UPS. I did cookies for Tyler Florence a couple of times. And when he had his shop, my cookies were in his shop. Because one day, I walked in, and I happened to have my portfolio with me. And there was some sugar cookies for sale and I thought, “Oh my goodness! I can do better than that.” So I showed the sales girl. She got the marketing person to come down and we started a relationship and I had my cookies in there every holiday. Because I walked in and said, “Hey look at me.” Dave: Barbara's confidence in her product and dedication to her customer relationships have served her well in growing her business and reaching big-name clients. But that doesn't mean she's always as busy as she'd like. Dave: Was there ever a time that you felt like potentially the business wasn't gonna work? Barbara: Oh yeah! Oh gosh yes! Dave: Tell us about that. Barbara: Because I didn't have a budget for marketing. My budget was, “Can I pay my mortgage this month?” And some people would tell me, “Oh! You need to get better pictures. They don't do you justice.” And I didn't have the money to go up a notch. Packaging, when you start pricing packaging, you have to buy a lot for custom packaging. It's a huge investment for a small business. And there were times where I would get discouraged. And then the phone would ring and somebody would say so and so told me about you. And I would get all happy again. I really feed off my customer's happiness because it tells me I'm doing a good job. Dave: What have you found has been your most effective way to get or reaching customers? Barbara: Oh, really, Constant Contact because my email list consists of people who have already done business with me. They've already emailed me and bought purchased cookies so they're on my list. They're familiar with the product and the emails are just a reminder that I'm here, which is, as I said, for people that don't order cookies regularly. They need to be reminded, whether it's a birthday or an anniversary or something… Dave: Yeah. Tell me a little bit about your approach with email, like what do you? What do you send out? Like what do you do, how often? Barbara: I want to do it once a month. I try to do it once a month and I like to put up pictures of cookies they haven't seen, something new. Like I believe I did an email about painted cookies now, there's a big demand now for watercolor. You use the food coloring as the paint. So I did that. Mostly it's seasonal, you know. It's like, “Oh this is August, I'll send out a picture of my watermelon cookies” or whatever. Trying to think of what they might be doing and what they might need them for. We're very seasonal. I don't ever have sales, so there's nothing like that to do. I made a decision very early on that I wasn't going to discount my work, at all. And I don't. I don't care if you're buying two dozen or two thousand. The price is the price and that's it. So, there's no sales to advertise. It's mostly a reminder. Get on the books now because September's full. So, think about me now. Mostly to remind people to, order ahead. That's what I use it for. The email marketing is entirely affordable, entirely affordable, $20 a month? I mean, come on. It's a bargain. It's a tremendous bargain. And what sold it for me is the online help because I'm of a certain age. I need to speak to someone. I don't want to just tap on the computer. And every time I call, I get someone who is willing to stay there and help me and I've never gone away unsatisfied from a phone call. And I need that because I'm not computer savvy. I am not going to invest time in learning how to run a computer because I run a cookie business. I'm not a computer person. Dave: Rather than focusing on finding new customers, Barbara stays in touch with her existing customers — the people she already has established relationships with. By reaching out and reminding her customers what she has to offer, she sparks new interest and gets the phone ringing again. Dave: What is it that you would say that really keeps you going and your business successful? Barbara: Pride in what I do, that I do it myself, that I don't have to answer to anyone except my customers. Like I've mentioned, this is not my first business. My first business was making curtains, draperies and shades and it was the similar thing. I worked alone, I made a beautiful product, everybody was happy at every stage. And I loved being my own boss. I've spent plenty of time working in offices thinking, “How can I get out of here?” I am not a paper person. I don't care what industry it's in, I cannot stand sitting behind a desk. So with cookies, I just love being the boss and being the creative person. I get physically ill if I cannot create something, if I can't be refinishing furniture, or making a curtain or doing something creative. And the cookies give me all that. All my art, all my color, theory, everything I do is in there. And I love making people happy. I love making little kids smile when they get a cookie. I have pictures on my wall of the little kids holding my cookies, being happy. That's a nice thing. Dave: You'll notice Barbara's success is rooted in her own satisfaction, as well as her customers'. As she said earlier, she really feeds off her customers' happiness. While many small businesses are started by fiercely independent people — hungry to call the shots, make their own hours, and put their stamp on things — the successful ones never lose sight of the people they're trying to help. I'll leave you with Barbara's best advice for someone interested in starting their own business. Barbara: Oh, golly. Know your market. If you don't know where your market is and what they want, you have no chance. You need to know what people want. And once you figure that out, make what they need. It's the same classic advice, find a need and fill it. And because of my exposure to a certain crowd of people years ago, I knew what they were looking for. I knew what they liked to have and that's why I can still serve those people by making my product. You have to know your market, you can't just have a good idea that nobody wants to buy, if you're gonna do it for a living. I mean believe me, I love what I do, I love the art but make no mistake, and this is how I put gas in the car. I have to make money. Dave: We appreciate you listening and would love to hear what you think of the show. Please go to iTunes or Stitcher right now and leave us a review. Small Biz Stories is produced by myself and Miranda Paquet with editing by TwentyFourSound. You can contact us at podcast@constantcontact.com Small Biz Stories is brought to you by Constant Contact. Constant Contact is committed to helping small businesses and nonprofits connect to new and existing customers with email marketing. You can be a marketer, all it takes is Constant Contact. Find out more at ConstantContact.com. The post Felix the Cook — Small Biz Stories, Episode 14 appeared first on Constant Contact.

When Barbara Felix started her business, Felix the Cook, over ten years ago, she was looking for a way to provide for her family, while doing something she loved. Finding her sweet spot with custom-made sugar cookies, Barbara has attracted big name clients like Google Ventures, UPS, and The Four Seasons. How can your business do the same? Listen as Barbara shares her best secrets for attracting and delighting clients. Find us on Stitcher You can also read the transcript below: Small Biz Stories is brought to you by Constant Contact. Constant Contact is committed to helping small businesses and nonprofits connect to new and existing customers with email marketing. You can be a marketer, all it takes is Constant Contact. Find out more at ConstantContact.com. Barbara: I've spent plenty of time working in offices thinking, “How can I get out of here?” I am not a paper person. I don't care what industry it's in, I cannot stand sitting behind a desk. So with cookies, I just love being the boss and being the creative person. I get physically ill if I cannot create something. Dave: Meet Barbara Felix, owner of Felix the Cook. Like so many businesses owners, Barbara became her own boss to avoid a boring, cookie-cutter career. Starting a business of her own, Barbara has the freedom to spend her days as she likes — which in her case means delighting customers with custom-made sugar cookies. If you've ever wondered if you have what it takes to start a business — or if you've already started and you're wondering how to take things to the next level, listen up. Today, Barbara shares her secrets for how a one-woman operation can use customer relationships to land big-name clients like Google Ventures, UPS, and The Four Seasons.More than fifty percent of small businesses fail within the first five years. These are the stories of those who beat the odds. My name is Dave Charest and I'll be your host as we share the stories of some of the bravest people you'll ever meet, small business owners. You'll hear how they got started, their biggest challenges, and their dreams for the future. Dave: Many small businesses start with a combination of passion and necessity. When Barbara started her business over ten years ago, she was looking for a way to provide for her family, while doing something she loved. Listen as she describes her early attempts at finding the right fit and how an early mentor helped point her in the right direction. Barbara: Well, my dad was a cook. My dad always cooked at home. And I loved to play in the kitchen. I loved making things and my mother let me do whatever I want with butter, sugar and flour. So I have absolutely no fear of sweet stuff. And I grew up, got married, got divorced and decided I needed a career because I've been to high school, of course, but not much college. So there I was, a single mother with two children looking for something to do and I thought well, maybe I can take a cooking class and instead I decided to take the full program at the California Culinary Academy and do 16 months and come out as a chef. So I worked at a really fine restaurant for a couple years and then found it was just too difficult as a single mother to keep the hours of a kitchen, which were pretty brutal, and mind my kids. So I quit that and got into private chefing after a stint of making desserts for restaurants. There were a couple of small restaurants I worked for that didn't have the time or the space to do their own pastry. So I'd do that for them. Again, pastry was always my favorite. And with the kids, I would make cookies with them every holiday like Halloween. I can't get over it. That Halloween, I made black icing, my son was in heaven with black icing everywhere. So we'd do that and then one year one of my instructors was at the house for Christmas and she saw my cookies and she said, “Oh my God, Barbra, you have to sell these.” I said, “Really?” So because I trusted her, I pursued the cookies. I was private chefing at the time and I asked one of my clients what she thought. She suggested I get a year of cookies. So that was a great idea. So I designed 12 collections with 6 designs each to make up a dozen cookies for every month of the year, and got connected with a web designer, who started with that page, our cookies of the month. And from there it just grew. It was very word of mouth, very word of mouth. Dave: So, just talk us through kind of that inspiration for doing the cookies? Barbara: Oh! The inspiration was I can do this, and it's fun and people pay me! That's what it was. And that having someone whose opinion that I trusted told me they were wonderful. That's what I needed because I get in my own little bubble where I can't see outside. And if you go on cookies websites, it's amazing what people are doing. They're total artworks. And if you look at that, and then look at what I do and it's like, well I'd never measure up. The funny thing is, is that they're doing the same thing. Everybody is comparing, which is silly. But I wanted a way to make some money that wasn't as difficult, as private chefing can be. I wanted to do something that I was entirely comfortable with, which is pastry. And it's a fun job and it's a happy job. People are so happy when they can get on my schedule. They are happy to order their cookies they're anticipating, and they're happy when they get them. So I like happy uplifting things. That's why, I'm not curing cancer but I'm making people happy, nothing wrong with that. Dave: With cookie-making, Barbara found the sweet spot she was looking for. Now, she had to find something just as important — a loyal customer base.  Luckily, this wasn't Barbara's first business. Through her past endeavors, Barbara already had some ideas about her target market, what they wanted, and how best to reach them. Barbara: Now, I spent some time in Texas for 10 years and I had my own business there as well, making curtains and drapery and shades. And my first customer was a junior-league lady and I had learned very well. You tell a junior league lady, you're set because they all tell each other, they all call each other. So with that experience, with the cookies I thought, I got to donate to the junior league. And I did the same thing. I picked a couple different charities and I'd make a significant donation and people started calling. And that's how it started, with donations, because I had to get the word out. Dave: Did you set any goals for your business when you were first getting started? Barbara: Oh, I wish I could say yes! I wish I could say I followed my business plan to the T. I did not. My goal was to make some extra money. I'm a single mother with two kids, money was the ticket. So, with the help of friends, I thought it was important to get a website together and that was my first goal to get all those 12 months of designs made. Then to set up a photography booth or some way to get…I bought my first camera to do the photographs, my first little instant camera. And, to set up a business account, I set up a checkbook. The goals were very small and then to find charities where I could donate because I knew that's where my market was. See, I knew, from my experience of having my business in Texas, I knew what these ladies wanted. I knew what they were looking for and knew where they were. I knew my market. And I knew what they needed. And that's how I did it. Going for the upscale charity events and contacting people I knew in that area. Dave: What would you say makes your business different from others out there? Barbara: I would say the service. I mean, they love the taste of the cookies, there's that. They love the cookies, they love what I do. But I've had people tell me, “Oh, you're so flexible, and thank you” And it's personable, you know, people get excited when they can talk to the person who's actually making their product. It's not going through several layers. In fact, a few years ago, well in 2004, Gwyneth Paltrow put me on her Goop website for Christmas. And that's because I knew her driver. A friend of mine drove for her. I didn't even know he was driving for her but that was my connection. And I got a lot of orders and one person called to check on her order and it was so funny the way she spoke. It's like, “Can you go down on the factory floor and find the order?” and I said, “Ma'am I'm making your cookies.” And they're so excited. They're very excited to talk to the person. So I think that's it. There's no filter between me and the client. They call or they email or they talk to me. And that's the way I like it. And even as I grow, I don't know that I'll give away that part of the business. I think I'll still be the contact person. Dave: Barbara's success comes from giving her customers an experience they can't get anywhere else. By listening to her customers' advice, Barbara creates relationships that make other people feel invested in her success. It's no surprise that many of Barbara's best new customers have come directly from her existing customer base. Dave: Yeah. Is there, is there some place that you go for advice or guidance? Barbara: Oh gosh, yes! Gosh, yes! I guess I'm just a friendly person. But I know so many people who seem to be more successful than I am and their always eager to help me. I have one friend I met when I was doing cookies for a charity function and it was being held at Pixar. It was a very big deal and I got to see the Pixar office. I got to look at an Oscar, like two feet from my face, a real Oscar. That woman moved on to another company and another company and she's taken me with her every step of the way. So I've made cookies for her at every company and she's very into computers and marketing. And she helps me and she gives me ideas. Another friend of mine, again, it's a friend of a friend. He asked me if I could deliver cookies to his friend who manages a very big jewelry store downtown. And because of the timing, I thought, “Oh I'll just take him in myself.” And that was like a perfect thing to do. The fellow loved meeting me, he loved the cookies and he has sent me business and he has sent me a wonderful event planner that I work with constantly. And he's my buddy. He brings me to different events, he suggests things to do. He's got me working on a chocolate cookie now. He's determined to have a chocolate cookie place card with gold lettering. So I have ordered. I have been through the web top to bottom looking for a specific edible gold luster, which I've acquired. It's in the mail to me now. So they guide me, they tell me what you can do. Another friend of mine works at LinkedIn and he's helping me use that to meet other marketing people in different companies because that's where the cookie orders from companies come from. So, yes, I don't know, people like me and they talk to me and I talk to them and we chit chat. And yes, I have plenty of advisors. I've made cookies for Google Ventures and they're still customers. I did cookies for UPS. I did cookies for Tyler Florence a couple of times. And when he had his shop, my cookies were in his shop. Because one day, I walked in, and I happened to have my portfolio with me. And there was some sugar cookies for sale and I thought, “Oh my goodness! I can do better than that.” So I showed the sales girl. She got the marketing person to come down and we started a relationship and I had my cookies in there every holiday. Because I walked in and said, “Hey look at me.” Dave: Barbara's confidence in her product and dedication to her customer relationships have served her well in growing her business and reaching big-name clients. But that doesn't mean she's always as busy as she'd like. Dave: Was there ever a time that you felt like potentially the business wasn't gonna work? Barbara: Oh yeah! Oh gosh yes! Dave: Tell us about that. Barbara: Because I didn't have a budget for marketing. My budget was, “Can I pay my mortgage this month?” And some people would tell me, “Oh! You need to get better pictures. They don't do you justice.” And I didn't have the money to go up a notch. Packaging, when you start pricing packaging, you have to buy a lot for custom packaging. It's a huge investment for a small business. And there were times where I would get discouraged. And then the phone would ring and somebody would say so and so told me about you. And I would get all happy again. I really feed off my customer's happiness because it tells me I'm doing a good job. Dave: What have you found has been your most effective way to get or reaching customers? Barbara: Oh, really, Constant Contact because my email list consists of people who have already done business with me. They've already emailed me and bought purchased cookies so they're on my list. They're familiar with the product and the emails are just a reminder that I'm here, which is, as I said, for people that don't order cookies regularly. They need to be reminded, whether it's a birthday or an anniversary or something… Dave: Yeah. Tell me a little bit about your approach with email, like what do you? What do you send out? Like what do you do, how often? Barbara: I want to do it once a month. I try to do it once a month and I like to put up pictures of cookies they haven't seen, something new. Like I believe I did an email about painted cookies now, there's a big demand now for watercolor. You use the food coloring as the paint. So I did that. Mostly it's seasonal, you know. It's like, “Oh this is August, I'll send out a picture of my watermelon cookies” or whatever. Trying to think of what they might be doing and what they might need them for. We're very seasonal. I don't ever have sales, so there's nothing like that to do. I made a decision very early on that I wasn't going to discount my work, at all. And I don't. I don't care if you're buying two dozen or two thousand. The price is the price and that's it. So, there's no sales to advertise. It's mostly a reminder. Get on the books now because September's full. So, think about me now. Mostly to remind people to, order ahead. That's what I use it for. The email marketing is entirely affordable, entirely affordable, $20 a month? I mean, come on. It's a bargain. It's a tremendous bargain. And what sold it for me is the online help because I'm of a certain age. I need to speak to someone. I don't want to just tap on the computer. And every time I call, I get someone who is willing to stay there and help me and I've never gone away unsatisfied from a phone call. And I need that because I'm not computer savvy. I am not going to invest time in learning how to run a computer because I run a cookie business. I'm not a computer person. Dave: Rather than focusing on finding new customers, Barbara stays in touch with her existing customers — the people she already has established relationships with. By reaching out and reminding her customers what she has to offer, she sparks new interest and gets the phone ringing again. Dave: What is it that you would say that really keeps you going and your business successful? Barbara: Pride in what I do, that I do it myself, that I don't have to answer to anyone except my customers. Like I've mentioned, this is not my first business. My first business was making curtains, draperies and shades and it was the similar thing. I worked alone, I made a beautiful product, everybody was happy at every stage. And I loved being my own boss. I've spent plenty of time working in offices thinking, “How can I get out of here?” I am not a paper person. I don't care what industry it's in, I cannot stand sitting behind a desk. So with cookies, I just love being the boss and being the creative person. I get physically ill if I cannot create something, if I can't be refinishing furniture, or making a curtain or doing something creative. And the cookies give me all that. All my art, all my color, theory, everything I do is in there. And I love making people happy. I love making little kids smile when they get a cookie. I have pictures on my wall of the little kids holding my cookies, being happy. That's a nice thing. Dave: You'll notice Barbara's success is rooted in her own satisfaction, as well as her customers'. As she said earlier, she really feeds off her customers' happiness. While many small businesses are started by fiercely independent people — hungry to call the shots, make their own hours, and put their stamp on things — the successful ones never lose sight of the people they're trying to help. I'll leave you with Barbara's best advice for someone interested in starting their own business. Barbara: Oh, golly. Know your market. If you don't know where your market is and what they want, you have no chance. You need to know what people want. And once you figure that out, make what they need. It's the same classic advice, find a need and fill it. And because of my exposure to a certain crowd of people years ago, I knew what they were looking for. I knew what they liked to have and that's why I can still serve those people by making my product. You have to know your market, you can't just have a good idea that nobody wants to buy, if you're gonna do it for a living. I mean believe me, I love what I do, I love the art but make no mistake, and this is how I put gas in the car. I have to make money. Dave: We appreciate you listening and would love to hear what you think of the show. Please go to iTunes or Stitcher right now and leave us a review. Small Biz Stories is produced by myself and Miranda Paquet with editing by TwentyFourSound. You can contact us at podcast@constantcontact.com Small Biz Stories is brought to you by Constant Contact. Constant Contact is committed to helping small businesses and nonprofits connect to new and existing customers with email marketing. You can be a marketer, all it takes is Constant Contact. Find out more at ConstantContact.com. The post Felix the Cook — Small Biz Stories, Episode 14 appeared first on Constant Contact.