Podcast appearances and mentions of david they

  • 25PODCASTS
  • 30EPISODES
  • 33mAVG DURATION
  • ?INFREQUENT EPISODES
  • Apr 18, 2025LATEST

POPULARITY

20172018201920202021202220232024


Best podcasts about david they

Latest podcast episodes about david they

#DoorGrowShow - Property Management Growth
DGS 290: AI in Property Management

#DoorGrowShow - Property Management Growth

Play Episode Listen Later Apr 18, 2025 42:33


As the property management industry continues to evolve, it's important to stay up to date on the latest innovations in technology. In this episode of the #DoorGrowShow, property management growth expert Jason Hull sits down with David Normand from Vendoroo to talk about AI's role in the future of property management. You'll Learn [01:29] The AI Revolution [08:47] The Importance of Empathy and Human Touch [22:21] Decreasing the Cost of Maintenance Coordination [32:29] New Features Coming to Vendoroo Quotables “As any property manager believes, we know how to do it the best.” “If you're not reading articles and studying up on this, I think that's going to catch you by surprise pretty quickly.” “Empathy is the magic lubrication that makes everything better.” “Empathetic reflection and empathy is a magical ingredient.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive Transcript [00:00:00] David: If you're not building AI tools from working with your partners, from being on the ground floor with them and using the data and building tools based upon the data and their pain points and their failures, buyer beware. If somebody's coming to you and saying, Hey, we figured this all out in the lab. [00:00:14] David: Come use it. Yeah. Right. Buyer beware. [00:00:18] Jason: All right. Welcome property management entrepreneurs to the DoorGrow Show or the Property Management Growth podcast. I'm Jason Hull, the founder and CEO of DoorGrow, the world's leading and most comprehensive group coaching mastermind for residential property management entrepreneurs. We've been doing this for over a decade and a half. [00:00:39] Jason: I've brought innovative strategies and optimizations to the property management industry. I have spoken to thousands of property management companies. I've coached over 600 businesses. I've rebranded over 300 companies like Bar Rescue for property managers, cleaning up their businesses, and we would love to help coach you and support you and your growth. [00:01:01] Jason: We have innovative strategies for building out growth engines, for building out your operational challenges, for helping you figure out how to get to the next level in your business and one of the cool tools that I'm excited to showcase today with my guest here, David Norman, is Vendoroo. We've had you on the show before. [00:01:19] Jason: Welcome back David.  [00:01:20] David: Yeah. Thank you for having me. It felt like years ago, it was only about, I think eight months ago since we did this, so much has changed over the time, so it's great to be back. Yeah, it's great to be back.  [00:01:29] Jason: Good to have you. I know you're in the middle of this AI revolution, which AI is just innovating and changing so rapidly. It probably does feel like years ago, so, yeah. Yeah. Yeah. It's been crazy. You guys have made a lot of changes too, so, you even changed your brand name from the last time we had you on the show. Yeah. Which was I think Tulu. Yeah. Right. And so, yeah. So why don't you get us caught up on what's going on 'cause, you know, there's been a lot.  [00:01:55] David: Yeah. Yeah. Thank you first of all for having me here today, Jason, and from the entire Vendoroo group of us, which, you know, the team has grown 10 x over the past eight months, which has been awesome. And I just also wanted to start in thanking everybody from what we call our client partners who have jumped in into this great unknown that is AI and is going to be like, how is this going to work in our industry? And so that's really what we've been focusing on the past eight months. You know, it's been a unbelievable journey of both failures, successes learnings and insights. And ultimately we're getting excited here at the NARPM broker owner which is in Denver to unveil Vendoroo. Like this is the coming out party. And so we're super excited if you're going to be there. We have a massive booth that we have set up that we have the ai alliance with other people that are working in the AI space, and I really hope that you guys come over and check it out. I promise this. [00:02:53] David: You'll never see a booth or a display like we have set up. At the NARPM broker owner. So.  [00:02:58] Jason: Now I want to go attend it. Yeah. Just so I can see your booth.  [00:03:01] David: So, let me put it this way. You may see the robot from the Jetsons walking around the booth walking around the NARPM broker owner, so, okay. [00:03:07] David: Yeah. Rosie? Yeah. You may see something like that. So she'll be vacuuming with her apron? Yeah. She'll be doing a little social engagement. It'll be cool. So, okay. Okay.  [00:03:17] Jason: Yeah. Very cool. Yeah, so catch us up on what, like, let's get into the kind of the background and the overview for people that have never heard about Vendoroo and what you guys do and how you got into this. [00:03:29] Jason: Yeah. Give people kind of the backstory. Yeah.  [00:03:31] David: Yeah. Thank you for that. So really the backstory is that, you know, we know of this AI economy that's coming, right? And there was a few of us, you know, I've been in this industry for 18 years. You know, I've managed you know, portfolios of 40,000 doors. [00:03:47] David: I've managed them for governments. You know, I started off with our own property management. Much like you guys. We started off with 80 doors. We grew to 550 doors in four years. So it was exciting to know that technology that was coming that promised duplication because, you know, as any property manager believes, we know how to do it the best, right. [00:04:05] David: And so what we decided to do is to come together and say, Hey, if AI's coming, there's two things that we need to figure out. Number one is how is this going to help us show value in this new industry to this new generation of property owners that is here, that is coming, that has been raised in the technology world too, right? [00:04:25] David: And two, can it actually duplicate our efforts? Can it actually be an employee for us? Right? And I don't care what people are promising about ai, you don't know until you get into what we call like, you know, get into the weeds, you got to get into the trenches. And so that's what we did, right? We went out and we were the guys that grabbed the torch and we said, we are going to take all the risk. [00:04:46] David: We are going to jump into the mix. We're going to ask people to jump onto the bandwagon with us and we're going to figure this out. And oh my gosh, what an unbelievable eight months it has been in learning and insights. And I can't wait to get into all the things that we've learned about the property management industry. [00:05:01] David: But that's really what we've been focusing on here the past eight months, right? So we started off with well hey, can the AI assist the va? Can it turn them into a super va? Is that what it's going to be? And, you know, some people were like, yay. And some people were like nay, you know? And so, and you know, because that human failure still was there, right? [00:05:21] David: And you know, what happens if they left? There was that inconsistency. And then it was like, all right, well what can the AI own? Right? What can it do? What can it perfect? And you know, can AI actually be the last employee that I ever hire? Right. That's really, that's a really cool thing to do. [00:05:39] David: But the property managing community had some really specific demands that they said that if this is going to be the last employee that I've had, it has to do this. And that's what I'm excited about our new technology 'cause it's doing those things. You know? [00:05:52] Jason: Yeah. And now you guys have made some big moves. I know, like I've, I have clients that we've sent over to you and they've shared some incredible stories. Like one client, I think he had 154 units or something like under management, and he said in the first day you're of turning on Vendoroo, like it closed out like 80 something work orders. [00:06:12] Jason: Yeah, like, it was crazy. Another client, they had a little more doors. They said it was like 50 something work orders were closed out in the first day of turning it on. And so, I mean, you're creating some dramatic stuff. Like this is a very different thing than what people are used to in maintenance. [00:06:27] David: Yeah. Yeah. And really what the exciting part about this, Jason, is that maintenance is actually really easy. And I know people laugh when I say that it's managing communications that is extremely difficult. Okay. Okay. Right, because you have, you know what AI told us about our industry over the last eight months is when we dove in with it and it took a step back and it said, whoa, you guys don't have a data problem here. [00:06:51] David: You guys have a emotion problem here. There's very specific categories of emotion that are in this space, right? Like, how do you build a technology that senses something? And I know this relates with property managers, 'cause I know this for myself. A property manager can walk into their office, sit down at their desk, and their spidey senses go off and they know something's wrong. [00:07:15] David: There's no screen that's telling them anything. There's no spreadsheet. They know something's off. Right. And so the AI is like, well, the statuses really don't matter that much to me based upon the feedback that I'm seeing from the property managers. Because the status and the communication all seem to be in order, but there's a disruption somewhere. [00:07:35] David: So I need to know about people's emotions. I need to understand about is the resident happy? Does the owner feel supported? Is the vendor being directed? And does the property manager believe that I can own the outcome for this? And it was really cool to start seeing its learning and understanding and picking up on these cues where, you know, people say that this is a data-driven industry. [00:07:55] David: It's really in an emotion driven industry.  [00:07:57] Jason: Oh yeah. It's a relationship and emotion industry for sure. Yeah. Yeah, big time.  [00:08:01] David: And it's really cool to see, and it's really started happening over this past last 60 days, the amount of residents, I was actually just looking at one before I jumped on here, that are like thanking the system, right? [00:08:15] David: Imagine that, like think of all of us that actually worked with the chat bot at like Verizon. I've never thanked that chatbot at Verizon for being their customer service. Right.  [00:08:25] Jason: And how do I get a representative? Representative. Representative!  [00:08:28] David: Yeah. Yeah, for sure. Versus you seeing people, you know, seeing individuals saying to the, you know, saying to the Vendoroo maintenance coordinator, Hey, I really appreciate feeling supported and how fast you acted because you know, there's empathy that's inside of its law and learning. So I don't want to get too much into the details on there. But yeah, these are some of the exciting things that we're working on.  [00:08:47] Jason: I mean, empathy is the magic lubrication that makes everything better. [00:08:52] David: Yeah,  [00:08:52] Jason: I mean they, they've done studies. Teams, even in working in warehouses, are more productive if the team has a higher level of empathy. Yeah. And doctors perform better. Yeah. If there's a higher level of empathy, there's less malpractice suits, like empathetic reflection and empathy is a magical ingredient. [00:09:10] Jason: I coach clients to add that in during sales. Yeah. 'cause their close rate goes up dramatically. Yeah. Right. So yeah. So leveraging and like getting the AI to actually be empathetic in its communication. Yeah. When that's probably not a natural skill for a lot of maintenance coordinators to be empathetic. [00:09:26] David: It's not, it's not a natural skill for a lot of people in the maintenance industry. Right? Yes. Especially when you talk about burnout. People begin developing views of the rental community, right? Like, oh my gosh, they're calling again, and that empathy meter goes lower and lower and lower. [00:09:41] David: Yeah. As people have been in the industry longer. But isn't it great that you have an employee now that knows that, yeah, it's my duty, rain or shine, 24 hours a day, seven days a week, 365 a year to always operate at the highest level of empathy? I never have a bad day. I never take a day off. [00:09:57] David: I'm never upset. I'm never short with somebody on the phone, never tired, never like, oh my gosh, Susan is calling me again. I'm going to let the phone just ring because I'm annoyed of talking to her. And it just is constantly hitting that same level of standard. And this is what's exciting to me, is that there are people that that have played around with this and have been a part of what I call the pain phase, right? [00:10:20] David: The pain phase is that understanding the way that agentic AI works, right? It's input in output. Input, output, right? The more that you're putting into it, the better the results are that you're going to get out of it, okay? Right. It's just like training an employee. So over the last eight months, what we've seen is that the community has trained this to be the level of a person that has now been working in the industry for five years. [00:10:46] David: In eight months. It's got five years of learning in eight months. Okay. Wow. In the next six to 12 months, we're probably looking at somebody that has 10 to 15 years understanding in the next six to 12 months and understand the level of type of tasks that it can do, especially getting into estimates and getting some other work. [00:11:04] David: And again, just you know, having empathy in my own life towards the people that jumped in that are like, what is this all about? Like, how does AI fail? Like, you know, there's still people that are involved and it was like this big like momentous train of like, you know, all these people were jumping on and giving ideas and people are in the loop and now it's weeding everything out and the AI stepping in and saying. [00:11:27] David: Hey, I appreciate all the input that you've given me. Thank you for all your effort. I'm now ready to step up to the plate and to own the outcome. Right. And that's what we're seeing at the NARPM show that's coming out. There's five AI tools. There's a master agent, five AI tools. And you know, I'll give you a couple of pieces here that, you know, we had feedback from our property managers like number one across the board. [00:11:50] David: A property manager said, if I'm hiring AI as my last employee, that has to work in my system. Yeah. Okay. Right. Like I don't want another, I don't want another technology. Yeah.  [00:11:59] Jason: I don't want a new system I got to get every vendor to use or a new system I got to get my team to use or figure out. We don't need another tool to make our lives more difficult. [00:12:08] Jason: No. They've got to use our stuff.  [00:12:09] David: They got to use, we have our existing stack. Yeah. So now the AI is fully integrated into all the most common PMS systems. You know, you have a cool chrome extension that you can download and there's a little yellow kangaroo right right there. And it's actually reading the work order that you're working on, and you can literally just ask it a question now and just being like, Hey, did anybody express frustration or concern on this work order? [00:12:32] David: Right? Because that's the emotion behind the status that you need to know. And it's like, yeah, two days ago Sally said that, you know, she was actually really frustrated about the multiple reschedules by this vendor. And it's like, great, that's a person I should be reaching out to and that's what I should be knowing that a status is never going to tell you. [00:12:47] David: Right? Yeah. It's in your slack, right? So if I have, if I'm on my phone, I'm talking to my employee and I'm laying in bed and I have a panic attack as a property manager, and I'm like, oh my gosh, did we take care of John's refrigerator and the office is closed? I can't get ahold of my employee. Yeah, you can. [00:13:03] David: Your employee works 24 7 now. Hey, can you give me an update on the refrigerator replacement at John's place? Yeah, it was scheduled this day. I contacted John. Everything's good to go. You know, go to sleep. You know, like, like that's the power. Full audit. Full syncing. So it's in your platform. That's really cool. [00:13:21] David: The other thing, it's got to be branded, right? This is a thing that we really learned about, like how important branding is to the community of property managers, right? Yeah. So the communications that go out have to be from your area code that's done. The emails that go out have to have like, you know, your company name and your logo on it. [00:13:39] David: The AI is doing that as well too. So that's being sent out, which is really cool. So people are feeling like, you know, that loyalty to brand is super important. And also do you know now that the AI can ask the residents to give a Google Review and we can link to the Google reviews and give you instant Google reviews to your page through the ai, which is cool, like how it's, it will know that if the success of a Google review is high on the way that the work order was done, that it's probably best to ask this person and it will send them a little thing. [00:14:11] David: Hey, can we get a feedback from you? And we link up to your Google review. And it posts that Google review to generate those 'cause we know those are super, super valuable to property managers. So that's actually going out today. That's kind of a little teaser there. That's the emails out now. [00:14:23] Jason: Nice. We'll have to get you to also connect it to our gather kudos links for clients 'cause then people can pick which review sites. So it diversifies the review profile.  [00:14:32] David: Love it. Love that. I'm going to hook you up with our guy Dotan. He's running that. He's one of our head of product. He's, actually out of Israel. [00:14:39] David: He's a amazing guy. I'd love to get you connected with him. Yeah. Cool. Let's do it. Cool. And then the biggest one too is like, I need a single point of contact. Right. And we knew that before there was a lot of people were still involved. There was a lot of oversight that was going on there, having that confusion and single point of contact. [00:14:56] David: Now it's in your phone, it's in your Slack, it's in your phone extension. It doesn't matter what's going on. You have one point of contact. It's your employee. You ask the question, get the answer, Jason, you can even ask for a change. You can even say, Hey, I want to change a vendor on a job and you'll see that the vendor gets changed for you in the system. [00:15:17] David: You can even say to your ai, and this is the big one: hey how do you triage this work order? And I want you to do this, or I want you to do that. And you just do it right through Slack or right through your PM chat and it makes the change for you. And now you have custom triage and all property managers have the ability to train their own AI for their company. [00:15:36] David: Think how cool that is. A person with 75 doors now, and the product that's being released has their own AI agent customized for their company, right? Yeah. Like, that's what happened over the last eight months, so you can see my excitement. There's been a lot of hard work in this. [00:15:54] David: Yeah, that's amazing. But this has been all the effort and a huge thank you out to everybody who's tried us, you know, even said that this wasn't for them at that point in time because those learnings went into what's going to make this product the best product in the property management space and is going to help people leverage sales and leverage efficiencies and blow their owners' minds away in ways that, that we have never thought about. [00:16:15] David: Oh yeah.  [00:16:16] Jason: Yeah. So I know like initially when you rolled this out, a lot of people were nervous about AI and you guys had kind of a human layer in between the AI and any communication Yeah, initially. Yeah. And so there was like, they had like a reps and a lot of people associated, oh, I've got this rep. [00:16:33] Jason: Yeah. You know, Steven or whatever is my rep or Pedro and I've got Pedro and like, oh no, what if Pedro leaves? And they were associating with that while the AI is really doing the crux of the work. Right. And so you guys have shifted away from even that now the AI is directly communicating with people. [00:16:52] Jason: Correct? Yeah.  [00:16:53] David: Yeah. So let's talk about that. So, definitely, so in the beginning there was like, we all had like lack of trust. We believed what it was going to do, but it was like we had a ton of people still trying, like, you know, using qualified VAs, training them. Like, you know, like, you know, if it fails, like, you know, you have to have a person stepped in and so let's talk about that. [00:17:12] David: So, you know, it was definitely that human layer. And let's talk about where we're at today. It is very clear to us, and the one thing that separates us from everybody is we still believe that humans are super important in this process. Okay? Yeah. And where humans are very important in this process are going to be when the AI says, Hey, I need you to make a phone call to this person for me, right? [00:17:35] David: Hey, I've reached out to this vendor three times and they haven't responded yet. I need you to give a phone call to see what's going on. Right? Hey, I need you to recruit a vendor for me. I need you to reach out and do a recruitment for the vendor. For me. Hey, this owner is asking questions about this estimate. [00:17:51] David: I need you to give a call for me. So the AI is basically able, on a standard work order, the AI can handle 95% of the workflow, no problem. Work order comes in, gets assigned to the resident. It gets out to the vendor. It's under the NTE not to exceed. It's great. The work gets done, the resident uploads its photos, the AI says to the resident, are you happy? [00:18:14] David: Everyone's good. It closes the work order out. Cool. Right. And then if a human...  [00:18:19] Jason: and how is it communicating with the tenant and with the vendor typically? [00:18:24] David: Yep. So, it's very clear that and this isn't a surprise to anybody. Everybody loves text messages, right? Yeah. I mean, that's just, it's just what it is. [00:18:32] David: You literally, like, people will get a phone call and they won't pick up and the text will come back and like text back. Yeah, text me. What do you need? Yeah. Text me here. But, so here's the things that people don't see behind the scenes that we'll talk about. So the complexity that went into. [00:18:51] David: Mapping out how to allow vendors... so a vendor could have like 20 jobs, right? And we don't want to send him like a code that he has to text for every work order so that it links to the right work order. Like what guy wants to do that? Okay. Like that's not how he works. So we figured out how to allow a vendor through AI just to use his regular phone and text anything about this thing. And it's understanding it and it's mapping it, it's routing it to all those work orders because we knew that in order for this to be the last employee somebody would have to handle, it also means that the vendor has to be happy and the same for the resident. [00:19:30] David: They can just text that they have multiple work orders. It understands what work order it's going to. If it's not quite sure, I would ask them, Hey, is this question about this work order? And they say, yeah. And so there's not like, again, codes and links and things that they have to do. It has to be seamless if they're working with a person. [00:19:46] David: So yeah, text message is massive. Email is second, and then phone is third for sure.  [00:19:51] Jason: Got it. So is your AI system calling people yet or you or telling the property manager to make the phone call?  [00:19:58] David: Yeah. People are okay with. If they're calling in like our new front desk agent, which if a person calls in and they want to get information about a listing or if they want to get information about a work order or something like that, or, you know, they're okay with getting that type of information. [00:20:13] David: Yeah. But they are, it is very clear that they are not okay with AI calling them when they're asking for an update on a work order like that. Like that line in the sand very clear. Yeah. And so we have people on on the team. That are constantly monitoring into ai, giving feedback, hitting improvement. [00:20:31] David: I want everybody to know there is not a work order that is taking place that is not touched by a human at least twice.  [00:20:38] Jason: Okay.  [00:20:39] David: Okay. Right.  [00:20:40] Jason: So there's a little, there's some oversight there. There there's, you're watching this, there are humans involved  [00:20:45] David: And then the ai will when it hits certain fail points, right? [00:20:51] David: It then escalates those things up to what we call the human in the loop, right? So there's an AI assistant, we there's people now that we're training a whole new generation of people that are no longer going to be maintenance coordinators. They're AI assistants now, right? And so when the AI says, Hey, this work order is not going down the path that I think it should go to be successful. [00:21:12] David: I'm escalating this up to a human, and so now as a property manager, not only am I getting this AI agent workflow that's standardizing the empathy and the workflows and all the stuff that we talked about in the communications, I also now get a fractional employee that when the AI says, Hey, I need help, I already have an employee that it can reach out to that can make that phone call or call the vendor. [00:21:36] David: But it's also monitoring the AI for me on top of it. So yes, there is, and that's one of the big thing that separates us apart is that the platform comes with what we call a human in the loop, an expert in the loop and so we're training the first generation of AI assistants in the property management industry. [00:21:55] David: Yep.  [00:21:56] Jason: Got it. So the AI maintenance coordinator. Has human assistance. Yep. Underneath it.  [00:22:02] David: And before it was the other way around where Yeah. The AI was assisting the human right. And now the humans are assisting the ai. That's what's happened in the last...  [00:22:11] Jason: that may be the future of all of our roles. [00:22:12] Jason: So,  [00:22:13] David: If you're not reading articles and studying up on this I think that's going to catch you by surprise pretty quickly. Yeah. Learn how to write prompts. I'll tell everybody right now. Yes.  [00:22:21] Jason: Yeah. Interesting. So, now what about this, you know, there's the uncanny, you know, sort of stage where people get a little bit nervous about AI and what do they call it? The uncanny valley or something like this, or right where it gets, it's so close to human that it becomes creepy. And there's some people that have fear about this, that are concerned. You're going to have a lot of late, you know, adopters that are like resistant. "I'll never do ai." [00:22:49] Jason: What would you say to somebody when you get on a sales call and they're like, well, I'm really nervous about this AI stuff, you know, and they just, they don't get it.  [00:22:57] David: Yeah.  [00:22:58] Jason: I'm sure there's people listening right now. They're like, oh man, AI is going to kill us all and it's going to take over the world and it's going to take our jobs. [00:23:05] Jason: And they think it's evil.  [00:23:06] David: Yeah. Yeah. I, and you know, I really want to hear that fear and I want to like, again, have empathy towards that. 'cause I do understand that fear of change causes people to get... Change in general. Yes. Right. It's like, whoa, I like everything the way it's going to be. Right. And we are historically in one of those phases of like, you know, the industrial revolution, the renaissance, like the automobile from horse. [00:23:34] David: Like, this is what is taking place. This is, this will be written down in history. It's massive change. It's a massive change. Massive. So what I would say to them, and not to, not from a way of fear. But to inspire them is there are a lot of hungry entrepreneurs out there that are embracing this head on. [00:23:57] David: Yeah. That are pushing the boundaries and the limits to be able to bring insights and customer service to their clients at a much higher level. And if you want to compete in this new AI economy. I would definitely encourage you to understand and get in and start investing in yourself now. But understand that investing in AI means having some pain threshold. [00:24:21] David: Like you got to get in, like you, you need to be able to give the feedback. You need to understand that if it falls short, do you have to be able to give it the time and the energy and the reward and the payoff of what I'm seeing for property managers who've embraced that when they're sitting there and they're going, I don't touch maintenance at all anymore. Yeah, it's wild. Right? And those are the people that in the beginning of this relationship, and there's a few that come to my head, are the ones that were sending me emails constantly saying, David, this is failing me. I believe in this, but this is failing me. And as my technology partner, I know that you're going to help us get this better. [00:24:58] David: And there is, you know, I have this word down that struggle equals great con conversation, right? Like, and so they had a struggle and that opened up a great conversation and because of that, their technology and the technology is getting better. So yeah, I think that from a personal point of view in this industry, one thing that I want to solve with AI is I think that we can all say that over the past 15 years, we've probably yelled at a lot of vendors or yelled at a lot of VAs or yelled at a lot of people. Let's start yelling at the ai. And then hopefully that the AI will actually eliminate the need for us to ever have to yell at anybody again because it knows us. [00:25:36] David: Yeah. It never fails us.  [00:25:38] Jason: You know? It really is amazing. I mean, your company is creating freedom for the business owner from being involved in maintenance. Yeah. Really?  [00:25:46] David: Yeah.  [00:25:47] Jason: And it just, and they get used to that pretty quickly. Like maintenance is just running and they're like, yeah. It frees up so much head space for them to focus on growth. [00:25:56] Jason: It gives them a whole bunch of like just greater capacity. Yeah. So they feel like, yeah, we could handle adding any number of doors now and we know we can still fulfill and do a good job.  [00:26:07] David: Yeah. Fixed cost scaling. Right? That's a term that we came up with is now that you know that I have a price per door that will cover all my maintenance. So if I went in and brought on 75 doors, I know that I don't have to go out and hire another employee. The system just grows with it and I know exactly what my margin is for all those doors. Right. And as we know previous, before fixed cost scaling a property managers is like, I have enough people. [00:26:32] David: I don't have enough people. Someone quit, someone didn't quit. My profit margins are good. My profit margins are bad. Yeah. And now with these AI tools. You know, you have your front desk employee, you have your maintenance coordinator, you have these fixed cost scales, and now somebody calls you up and says, Hey, I want you to take on 25 doors, and you're like, I have the resource resources for maintenance, which is, we know is 80% of the workload already. I don't have to go out and hire another maintenance coordinator 'cause the system just grows with me, which is cool.  [00:27:00] Jason: So one of the things you shared at DoorGrow Live and you're our top sponsor for the upcoming... Can't wait for DoorGrow Live, can't wait to, so we're really excited to have you back so. [00:27:10] Jason: Everybody make sure you're at DoorGrow Live if you want. Our theme this year is innovating the future of property management. And we're bringing, we're going to be showcasing, innovating pricing structures that are different than how property managers have typically historically priced, that allow you to lower your operational costs and close more deals more easily at a higher price point. [00:27:30] Jason: We're, we'll be showcasing a three tier hybrid pricing model that we've innovated here at DoorGrow, and we've got clients using it. It's been a game changer. We're going to be sharing other cool things about the future hiring systems, et cetera. Right. So you guys will also be there showcasing the future. [00:27:46] Jason: One of the things you shared previously that really kind of struck me as you showed, you did some research and you showed the typical cost. Per unit that most companies had just to cover and deal with maintenance. Yeah. And and then what you were able to get it down to.  [00:28:03] David: Yeah.  [00:28:04] Jason: And that alone was just like a bit of a mind blowing. [00:28:07] Jason: Could you just share a little bit of numbers here?  [00:28:09] David: Yeah. So one of the first things that we had to do when we started way back in the day is figure out well. Like, like what's the impact of AI going to be us from like a cost perspective, right? Is it a huge change? And so we went out on a big survey mission and we were surveying property managers and asking them, what's your cost per door for managing maintenance? [00:28:30] David: How much do you spend every door to manage maintenance? Now the first thing is less than 1% of property managers knew what that cost was. Sure.  [00:28:37] Jason: Oh, sure. Right. Because, but then they got to figure out, oh, we got a maintenance coordinator and we've got these people doing phone calls and they cost this, and yeah, it's complicated. [00:28:45] David: It's complicated. So we built a calculator. Okay. And then people could start adding in that information out into the calculator, and the average person was around $13 and 50 cents a door.  [00:28:56] Jason: Okay. Okay.  [00:28:57] David: Wow. Right, right. So that was where the average person was, somewhere in the low twenties. Yeah. [00:29:01] David: And others were actually pretty good. Like, I'd say like, you know, some of the good ones that we saw were maybe around like, you know, 10, $11 a door or something along that line.  [00:29:09] Jason: They probably had a large portfolio would be my guess.  [00:29:12] David: Yeah. And also I think a lot of it's just like, you know, I don't know if they were still accounting for all their software and everything that they had. [00:29:19] David: Maybe they're not factoring everything. Yeah. No, I think if we really dug in, it'd be different. So now we know that, you know, the base package of what people are getting in. The average cost of what people are paying for 24 7 services that's emergencies around the clock is about $7 and 50 cents a door, right? [00:29:37] David: So right off the bat in AI's first swing, it said we cut the cost in half. Yeah. Okay. Right. So 50% reduction. I mean, to me as an owner, a 50% reduction in cost. That's like. You know, alarms and celebration going off, you know? For sure. And then, yeah.  [00:29:55] Jason: And that's, if everything just stayed the same, like it was still the same level of quality, cutting in half would be a solid win right there. [00:30:03] Jason: Yeah.  [00:30:03] David: Yeah. That's just like status quo stuff. And now what, with the release of the new Vendoroo product that, that's actually being announced here today. The email's going out to all of our existing clients of all the new features that are coming out now, we're starting to see that. You know that quality is now increasing to where if you were to go out and hire that person, you may have to be spending, you know, 55,000 or $65,000 a year. [00:30:29] David: Right? So now it's like saying, okay, if we can get as good as what these people are using for their VAs right, and we know what that cost is, and they're saying that's, you know, that's what their factors is. Well, what happens in the next six to 12 months when this is a seasoned person that you would've to pay $85,000 a year to? [00:30:45] David: Right. Yeah. And right, because they have knowledge of. Estimates and knowledge of vendor routing and knowledge of, you know, it can handle...  [00:30:53] Jason: you've invested so much time into them, so much attention. They know your properties and know your portfolio. They know the vendors. Like you've invested so much into this person that now they sort of have you by the balls so that they're like, Hey, I want 80 k or I walk.  [00:31:06] David: Yeah.  [00:31:06] Jason: You're like, you've got to come up with it.  [00:31:08] David: Yeah.  [00:31:09] Jason: Right. You've got to do it.  [00:31:10] David: Yeah.  [00:31:10] Jason: And you know, because that's not easy to create. And a lot of people, in order to have a good maintenance coordinator, they need a veteran of the industry. Veteran of industry. [00:31:19] Jason: They need somebody that's been doing this a long time.  [00:31:21] David: Yeah.  [00:31:22] Jason: And that's really hard to find.  [00:31:24] David: Yes. It's extremely hard to find as we know. One of the things that I think that we're doing for this industry is we're actually preserving knowledge that I don't think is necessary getting passed down. [00:31:33] David: Yeah. You know, there's a lot less people that I think are as handy as they once were in the Americas and so we have a lot of that knowledge. Like, you know, we know that the average age of an electrician is in the sixties, the average age of a plumber's in the sixties. And these guys, you know, they have wealth of knowledge that it can troubleshoot anything that's going on in a house. [00:31:54] David: And so to be able to try to preserve some of that, so maybe if a person does come in, you know, maybe there's some knowledge sharing along the lines. But let's take it even in another step forward Jason that in the future, you know, the AI is going to know the location of the hot water tank in that house. [00:32:10] David: It's going to then add it automatically to the system, like. It's going to know more knowledge than they will because it's going to have maps of every single property that's all currently sitting inside of, you know, that maintenance coordinator's head, right? And so it's going to, it's going to actually know more than them, you know. [00:32:26] Jason: Yeah. That's wild. Yeah, it is. Absolutely. It's the future. Cool. Well, you're rolling out a bunch of new features. You're announcing these today. You've told me a little bit, but why don't you tell the listeners what's changing, what's new, what innovations have come out? What are you guys launching? [00:32:41] David: Yeah. Exciting. Yeah. So, the biggest one I think is, which is the most exciting is, is Resiroo, which is the first one that actually handles all the communications with the resident and does the triage and troubleshooting. First one of what are you talking about? So we have our products. [00:32:57] David: So you have these AI tools, right? These agents. Right.  [00:33:00] Jason: And so, you know, every, so think of them like different sort of people?  [00:33:04] David: Skill sets. Yeah. Different person. Okay. Exactly. And so that's when you come and see our display at the NARPM conference, you'll actually will see these five agents kind of in their work desk and in their environments, kind of cool. [00:33:15] David: Okay. Able to see them right. So the coolest part about that one is we're doing a major product you know, update on that for not only the knowledge base, but we're actually turning that over to the company. We were talking about this a little bit before, and now they own their own AI agent and they can customize it into how they want it to ask questions or the type of questions and the mindsets when it's triaging stuff. [00:33:41] David: Triaging work orders for their portfolio. Like super cool. So fully customizable to your company, right?  [00:33:49] Jason: So now sometimes the more humans get involved, the more they mess stuff up.  [00:33:54] David: Yes. We make sure they don't mess it up. So everyone's going to learn how to write prompts and they'll submit it into us. [00:33:59] David: And we have a great team of AI engineers that when that knowledge base is written or what they're doing. We will ensure that it is put in so that it actually produces the desire outcome, right? Yeah. Yeah. So that's a very exciting one. The second one that I'm that I think is so cool, do you know that only 10% of all estimates get approved by the owner without one or multiple questions? [00:34:23] David: Because owners really struggle with trust when it comes to estimates. Like 10%. Like, that's a really bad number, I felt as the industry that owners only believe us one out of 10 times. Like that's the way I took that. Yeah. Right. And so, Owneroo is what I coined inside, is the estimate of the future. [00:34:41] David: That really was looking in understanding like what was, what questions was the owner asking when they were rejecting a bid that that we could proactively ask the answer for them to help guide them to understanding the value in this estimate that they're looking at in historical context of the property. [00:35:00] David: How many other people have experienced this issue? Like, like there's a whole bunch of factors that should go into an estimate and an estimate should no longer be like, here's a cost from Frank. Right? Like, like that was like, like that was...  [00:35:14] Jason: here's what Frank said it is. Yeah. Like that was like from the 1940s. [00:35:17] Jason: That's good. How do I trust that?  [00:35:18] David: How do I trust that? That was from the forties and we're still...  [00:35:21] Jason: how much went into this decision? Was this just out of the blue, like pulled out of your ass or is this like legit?  [00:35:27] David: Yeah. Yeah. What's the, you know, we live in a data-driven world, so what's the intellect behind this estimate? [00:35:33] David: And so I'm really excited about Owneroo, which is going to be the new standard for the way the estimates are created. We have the front desk agent which is coming out. So, that one is going to handle phone calls that are coming in, be able to talk about available listings, actual general questions about leases route phone calls over to property managers for you. [00:35:54] David: So again. Very human-like interaction, great AI voice. Actually. We feel it's going to be the best in the industry. So a person's calling in, just like they're calling your office able to handle all those front desk things. We, we have the PM chat, which is now the employee which is fully integrated into all of your systems. [00:36:14] David: It's in Slack. That's your employee that you get to talk to. We believe that if you're going to hire somebody, they should be inside of your communication channels. You have the Google Chrome extension that it's on right inside your AppFolio or your buildium or your Rentvine software that you can ask and talk to it. [00:36:31] David: So, yeah, so we have a lot of exciting products that have come out. And then of course the backbone of all of them in the middle is Vendoroo, which handles all the scheduling, all the communications. You know, a resident asks for an update, responds to them, an owner asks for an update, it responds to them. [00:36:48] David: And you know, it handles actually the body of the work order. So you have those five tools, we believe are what the property management industry said. If you are going to give me an employee, this is what the employee has to be. This is what makes up that employee. So we say that these tools, these agents were actually built by the property management industry. [00:37:08] David: And that excites me because if you're not building AI tools from working with your partners, from being on the ground floor with them and using the data and building tools based upon the data and their pain points and their failures, buyer beware. If somebody's coming to you and saying, Hey, we figured this all out in the lab. [00:37:25] David: Come use it. Yeah. Right. Buyer beware.  [00:37:29] Jason: Yeah. So you guys connect with Slack. They can communicate through Slack, but it slack's a paid tool. Have you guys considered Telegram? I love Telegram Messenger.  [00:37:37] Jason: Alright. Could you do that? Write it down. Telegram Messenger is like the iMessage tool that works on every device. [00:37:44] Jason: It's free. It's one of the most secure, it's not owned or controlled by Facebook. Like, WhatsApp, like, yeah. But WhatsApp might be a close second, but we use Telegram internally, so I love Telegram.  [00:37:58] David: We'll definitely take that into, into consideration for sure. Yeah, check it  [00:38:02] Jason: out. Because I, what I love is the voice message feature and I can just listen to my team and others at like high speed, but internal communications and it's free for everybody, which is great. [00:38:12] Jason: So, yeah.  [00:38:13] David: Yeah. I think a lot, for a lot of people it was like you know, who was Vendoroo in the beginning and Vendoroo was like the team of like people that were trying to figure out like how is AI going to work in this industry? [00:38:26] David: How is it going to solve the needs of our property management partners? And this is why I say to everybody, if you thought about Vendoroo, if you came in and the experience wasn't great with Vendoroo, if you're one of our existing clients that has been with us and you're and you're still moving forward, and we thank you so much for your dedication to this, the Vendoroo product, everything that we've done, everything that we worked at is being showcased at the NARPM broker owner. The email's going out today. This is who Vendoroo is. We are a team that is a technology partner for the property management industry that is helping building meaningful AI tools, specifically by demand, by our industry to help us show value and to preserve this great industry. [00:39:09] David: For the future in this new AI economy, right? Like we need to step up. We have clients that are adding doors left and right because they're showing their clients that they use an AI maintenance system and their clients are like, this is what I expect from a property management in this community. [00:39:24] David: Right? And again, Owneroo, that estimate, we believe that in the future. Like, like owners are going to say like, I'm not approving an estimate unless it's like the estimate of the future, right? Like, like that's the new standard. So you got to know what the new standards are and you got to get technology that are going to help you compete with those new standards that will be in your community and are will be in your community in the next week, the next two weeks. [00:39:46] David: And definitely some really cool products in the next six months.  [00:39:49] Jason: All right. Well, yeah, I'm really excited to see what you guys have been able to create so far. So yeah, it's pretty awesome. Yeah. All right. Well David, it's been awesome having you on the show. Sounds like you guys are really innovating the future. Everybody come to DoorGrow Live. David, are you going to be at that one? I will be there. All right, so you can come meet David in person. [00:40:08] Jason: We've got some amazing people that are going to be at this. We've got technology people. There's a gentleman there, one of the vendors they created another really cool tool, but he had a hundred million dollars exit, you know, in a previous business, like there's really amazing entrepreneurs and people at this event, so come to DoorGrow Live, get your tickets, and if you do, we have just decided that we're going to give out to anybody that registers. [00:40:34] Jason: You can pick from one of our free bonuses that are well worth the price of the ticket. Or coming or anything in and of itself, including our pricing secrets training that goes over a three tier hybrid pricing model or our sales secrets training, which goes over how we're helping property managers crush it and closing more deals more easily at a higher price point. [00:40:55] Jason: And reputation secrets, which are helping our clients get way more positive reviews by leveraging the psychology and the law of reciprocity and getting the majority of their tenants in order to give them positive feedback online. Maybe some others. So you'll be able to pick from these bonuses one of these that you might like and that's our free, most incredible free gift ever that we'll give to each person that registers for DoorGrow Live. [00:41:19] Jason: So.  [00:41:20] David: Cool. Awesome man. Always great to see you. Looking forward to seeing you at DoorGrow Live and love that you guys are working on pricing because AI is going to make people think different about pricing. It's going to be way more efficient, so you guys are ahead of the curve on that. Great job, Jason. [00:41:33] Jason: Awesome. All right, so how can they check out Vendoroo, David?  [00:41:36] David: Just visit, Vendoroo.ai, go to the website, request a demo with one of our great sales reps, and yeah they'd love to help you out. See all the new products, see how far it's come. And again, we thank everybody from the bottom of our hearts for all their effort, people who've tried us out. [00:41:52] David: Come back and see what you built and yeah. Come check us out at Vendoroo.  [00:41:57] Jason: Got it. Go check out Vendoroo, it's vendor. If you know how to spell that, V-E-N-D-O-R-O-O dot A-I, go check it out. All right? And if you're a property management entrepreneur, you want to add doors, you want to make your business scalable, you want to get out of the day to day, you want to increase the capacity so your company could easily handle another 200 plus doors without having to make any significant systems changes, reach out to us at DoorGrow. We will help you figure it out. So until next time to our mutual growth. Bye everyone. 

Philokalia Ministries
The Ladder of Divine Ascent - Chapter XXVI: On Discernment, Part XI

Philokalia Ministries

Play Episode Listen Later Apr 25, 2024 68:19


We continued with St. John's summary of discernment and its particular fruit in the spiritual life. However, it does not read like a summary. Each saying opens us up to a divine reality and a participation in the life of Christ that comes to us by grace and the ascetic life. One cannot help but be captivated by the beauty of what St. John describes. It becomes evident that what we are being drawn into is the very beauty of Christ and that of the kingdom. Grace has the capacity to transform even the darkest of things within us and to illuminate the mind and the heart to see clearly what has eternal value. With the reading of each saying one begins to experience a holy desire growing within the heart. Thanks be to God! --- Text of chat during the group: 00:06:34 FrDavid Abernethy: page 217 page 14   00:25:57 Anthony: He says this while I'm making dinner....   00:31:19 David: Despair is suffering without meaning- Victor Frankl   00:49:34 Eric Ewanco: Reacted to "Κλίμαξ αγίου Ιωάννου.LadderClimatuspdf" with ❤️   00:49:43 Eric Ewanco: Reacted to "TheLadderofDivineAscent.pdf" with

The IC-DISC Show
Ep051: Pathways to Successful Business Transitions with Laurie Barkman

The IC-DISC Show

Play Episode Listen Later Jan 10, 2024 44:34


Today on the IC-DISC show, join us for an insightful discussion with Laurie Barkman, a renowned CEO and author of The Business Transition Handbook. As the acclaimed Business Transition Sherpa, Laurie sheds light on the reality that all business owners will exit someday. We explore the challenges of selling a business, like why most small businesses don't sell successfully and the potential pitfalls of an exit. We also discuss relying on experienced advisors and how understanding taxes and markets can aid planning. Laurie shares invaluable advice on navigating this critical phase successfully. This episode is a must-listen for any business owner planning to navigate their business transition.   SHOW HIGHLIGHTS Laurie and I discuss her journey as a CEO and author of The Business Transition Handbook, providing insights into the realities of business transition. She highlights the hard truth of selling a business and how eight out of ten small businesses fail to do so successfully. We talk about the common pitfalls of business transition, the five "D's" that can disrupt a business, and the value of creating a satisfied client base. Laurie explains the unique challenges law firms face during business transition and offers her strategies for a smooth transition. We delve into the importance of a clear exit plan and the different options business owners have when transitioning their business. Laurie advises focusing on three primary goals during business transition: business, personal, and financial. We discuss the analogy of business transition planning to having a sherpa guide you through a treacherous terrain, making the process seem less daunting. Laurie emphasizes the significance of accountability in business and the benefits of having industry expert conversations during transition. We explore the upcoming online course based on Laurie's book that she plans to launch in the first quarter of 2024, aiming to reach a wider audience of entrepreneurs. We discuss the importance of having an experienced network of professionals to help businesses reach their goals and create a successful transition plan. LINKSShow Notes Be a Guest About IC-DISC Alliance About The Business Transition Sherpa About The Endgame Entrepreneurship Course GUEST Laurie BarkmanAbout Laurie TRANSCRIPT (AI transcript provided as supporting material and may contain errors) David: Hi, this is David Spray. Welcome to another episode of the IC Disc Show. My guest today is Laurie Barkman from Pittsburgh. Laurie is a really fun and interesting guest. She just released her first book entitled the Business Transition Handbook, and she is called in many circles the business transition, the idea being that a Sherpa guides somebody on a journey over a period of time rather than just a one-point event in time. Laurie has an impressive background as a former CEO of a large privately held company. She has a bachelor's and an MBA, and we talked about mistakes business owners make when they're transitioning their business. We talked about the sober reality that 100% every last business owner is going to exit their business and the question is will it be on their terms or someone else's? So there is some great advice and information for any company, any business owner who is looking to exit their business at some point, and I think you'll get a lot of value from this. Good morning, laurie. How are you today? Laurie: David, hey, great to see you, I'm awesome. David: That is great. Now, where are you located today? Laurie: I'm in the great city of Pittsburgh, Pennsylvania. David: Yes, now are you a native of Pittsburgh. Laurie: I am not. I am not. I'm an adopted daughter of the city. I'm originally from Albany, New York. David: Okay, so Ithaca wasn't too far to go for you. Laurie: That's right, it was not. It was only about three hours away. David: Okay, and then what brought you to Pittsburgh? Laurie: After graduating from college, my husband and I moved around Pennsylvania with different corporations. I was with Aigner Sol Rand Company and I was with a division in Shippensburg and after four years decided to get my masters, get my MBA, and decided to move to Pittsburgh. My husband had gotten a nice job with McKinsey and company and here we are. Okay 25 years later. David: You got your MBA in Pittsburgh, right at Carnegie. Laurie: Mellon. I did at Carnegie Mellon okay. David: Well, let's dig into this. So the business transition Sherpa. Where did this nickname come from? Did you come up with this yourself, or did somebody else give you that title? Laurie: You know, it's kind of an amalgamation of things. I remember talking to my husband about a trip that he and I had taken in 1997. We did a trek, we did a hike, and this idea of somebody guiding you and stuck with me. And as I was thinking about what I'm doing, working with business owners, it's not just one moment in time, it's over a period of time, and I really feel like my role is to be a guide. I don't have all the answers. I have a path, I have tools and, just like a Sherpa and the great work that they do, it's that same idea is we're on a journey together. Entrepreneurs build their business, sometimes on their own, but most likely not. Entrepreneurs are building their companies with other people, and so when they get to this other side of the mountain, so to speak, and thinking about their next chapter, why would they go about that by themselves? And I want to be the person that helps guide them. David: Yeah, I love the description of what you do because it picks up the fact that it's a journey, it's not a point in time and it's tough to do by yourself. In my experience I've just closely held small to medium sized business owners. Only sell a business once right, that's right. Laurie: We can regret things in our experience. We can regret what we do and wish we did something differently, or we do not take an action and we regret not taking that action. And my book the whole reason I wrote the book the business transition handbook was to help people proactively so that they don't have regrets. It's a very big, lofty goal to not have regrets in life, but if we can be proactive and we can understand what it takes to build a more valuable, transferable business and then understand what resources we might want to have on our side. I like to say, David, you can't do exit planning when you're exiting. It's just too late. So if you give yourself a time and space to work on having a more valuable, transferable business, the good news is that it's going to be a lot more fun to run your company. It's going to have an economic benefit to you and then in the future you'll have more options. You'll have more valuable options too. David: Yeah, I really enjoyed reading your book. In fact, behind you there, I believe, there's a blown up cover. Yes, it is. Laurie: That's right. Yeah, it was really interesting to write the book. I guess I could say it's my first book. I don't know that I'll have a second, but this, no matter what, is my first book and it was challenging, but at the same time, it was fun. It was like a giant puzzle. Once I mapped out what I believe the big pitfalls are right. So the subtitle of the book is how to avoid succession pitfalls. Each chapter in the book and I don't know if you picked up on this as you were reading it but each chapter is a pitfall. What do you want to avoid? And so what I tried to do was put myself in the reader's seat, the entrepreneur's seat, and how I developed that perspective was from my own experiences, client experiences and then integrating case studies and other learnings from my podcast. I have a show called Succession Stories that you will be a part of soon, and there are so many valuable things to learn from other people's wins and losses and challenges, and that's what I have always sought out to do with my show. The show is about three years old at this point and when I was writing the book, I had, I think, about 120 recordings, so that's a lot of knowledge and content. And what was so fun for me, david, was I was going back into the archives of a discussion. Every show I have has a transcript and of course I don't remember everything. But when I would write a chapter and I would need a case study, I had space for a case study in that particular spot, for a particular topic I would think, okay, which shows, should I go back to dive into those transcripts and then find these golden nuggets and I it was just so interesting to have the recall in writing of oh yeah, you know, she said that was an amazing conversation, and you, my memories are not long, right, we have so many, only so much storage in our brains, exactly. So it was really cool to go back to that body of knowledge that I had created, and I began to appreciate that body of knowledge even more. I think this case studies bring the book to life. I'd like to hear what you think about that, but that's that's what I hear from my readers is they love the, the learning and the concepts, the business concepts in the book, and they think that it's like me having a conversation with them by sharing these case studies and stories along the way. David: Yeah, I agree there were a number of. I mean, there was a lot of great stuff in there, but some of the particular ones I kind of wanted to dive in with you on is so this is a little bit of a quiz to see how much of your book you remember Do. When somebody, when people, decide to sell their business, do they just automatically sell it or do some portion of them? Are they unable to sell the business? Laurie: There's a mix, as you can imagine. Yeah, what percentage are you? David: able to actually sell it in the small business space. Laurie: It's a surprisingly low number. You know the statistics out. There is that every two out of 10 companies in the lower middle market actually sell. So that leaves eight out of 10 not selling. And you could ask, well, why is that? And there's a lot of reasons why. Sometimes along the way we have the five D's kind of pop up, or always also known as the 60s. These D's are taboo things, sometimes we don't want to talk about them, but they're real and we do need to talk about them. It could be the debt of an owner. It could be divorce disaster like COVID you know we put it in that category or disaster like fires and the business or the market has experienced is something traumatic it could be. Did I say divorce already? Divorce is another D. So these D's are something we can plan for. We don't want them to happen but we do need to be prepared. So if we're not prepared for the 60s, they can really wreak havoc on a business. Particularly death. The death of an owner can throw a business into a tailspin and I did cover that at some you know level in the book with a couple of episodes, snippets of people who had experienced that. The other reason why businesses don't sell, david, is because they're just not transferable. If they are so owner dependent and owner centric, that can be a really big reason why it won't sell and it's hard for owners to see that. You know, sometimes owners think that they are the secret sauce. I have a business assessment that one time I'm marketing. The owner of a marketing firm took this assessment and she said oh my God, she goes. I didn't realize I was standing in the way. She thought she, you know, she's a photographer, she's the creative, she's got the client relationships and she realized at that moment oh my goodness, I am making my company less valuable. So there's a pivot in our brains when we recognize some of the elements that help create a more transferable business and companies that have an owner who don't necessarily see the business as an asset, they see it as a job or they see it as a piggy bank. Those are different things, because if you see your business as an asset, you're going to want to create value in that asset over time. You're also going to want to protect that asset. If it's a job, right, I just accepted what is. And it's not growing, it's staying the same. Maybe you're not reinvesting in the business. You're not reinvesting in yourself or your people. And let's just jump to an example. I have a client who, in his favor, had very loyal people Once he got to his sixties, as did his key employees, and everybody's looking to retire. Buyers looking at that business said oh my goodness, how transferable is this business when all the key people are going to retire at the same time? So he had saved money, so to speak, by not bringing in new people, kind of underneath and over a period of training. So he recognizes that now, but it's too late. David: Sure, yeah, I was having this conversation yesterday with a group of CEOs and we were talking about enterprise value, increasing it, owner dependency, and there's a guy that owns a small boutique intellectual property law firm and they were asking him how sellable law firms are in general and he said not very and from his perspective that he said there's things he could do to make the business run without him better. But his model that he really likes to work with his clients directly, he doesn't like an associate between them and so that in his and a couple of his clients are actually in the room and they're like, and he's like, yeah, if I had like some associates that could potentially lower the fees to a client, you know, because there's more leverage in the client. So like no, we'd rather pay more and have you. So I've noticed in professional services there's this tradeoff between what. If you really want to have delighted clients, sometimes that's at odds with making your business the most valuable. And I know my business is like that. I mean I've got huge owner dependency issues because I am the key relationship, but I've gotten peace with the fact that it's just not very sellable and I like being a craftsman and just like it hit. Laurie: Yeah, and that isn't that the important thing. If you recognize it and are accepting of it, hey, you know what? That's okay. Not every business is going to be an asset to sell to another buyer and that's totally okay with the law firm. Just to circle back, because I do have some professional experience with law firms, one of the catch 22 things about law in particular is the code of ethics that they have to abide by. David: The non-competence, the non-compete. Laurie: Yeah. So if a lawyer leaves a law firm, they you know there's certain restrictions on when they can inform their clients and taking their clients with them, and I know there's lots of gray areas. I'm not going to talk about all of the nuances there. My point is that with law firms also there could be other types of professional services that run into this, but in law in particular what clients will say is that they hire lawyers, not law firms. Yeah, and so when you're tied let's just like you're talking about with that particular partner that the clients are willing to pay more because they want to work with that particular partner it could be highly likely that client would jump and go with them, no matter where they are. That can be particularly concerning for an acquiring firm, knowing that they may have some stickiness to certain clients and then they may not have other stickiness. So it really is dependent If there's a firm that's acquisitive and looking at buying other professional services, whether it's law or any other profession. I work with engineering firms quite a bit and in engineering firms there might be contracts but those contracts are not assignable and it might influence not only the type of transaction that we would do, whether an asset sale or entity sale, but it also would influence potentially on the transition for the sellers and how long they might want to stay, or the buyers might want them to stay under either an employment agreement or consulting agreement. It could also influence whether or not there's an earn out. You could structure an earn out, for example, if the buyer wants to structure an earn out to ensure a certain percent of those contracts are assigned over whatever time period or year and a half. So it could influence it in a big way. David: Talk to me about, and thank you for that. Talk to me about what you enjoy most, about being a business transition or not. I shouldn't say A, but the business transition, Sure. What are some of the aspects of that in working with those companies that you just find particularly satisfying or rewarding? Laurie: One of the things that I experienced as a CEO of a privately held company was the loneliness and being in my own head and having big questions and not really knowing where to go. I find that I bring kind of this EQ, if you will, of smarts and know-how and experiences and questions, and then I bring excuse me, the IQ around that, then the EQ, which is more of the emotional side. I've always been a kind of person that people confide in. Obviously, this is a highly confidential type of scenario but, I talk with my clients about the business. for sure, that's the practical side of everything, but we also talk about the personal side. We have to talk about them because remember earlier in our conversation I talked about regrets and there's some alarming statistics out there about experiencing regrets at least one year after the sale. I'm kind of on this mission to help business owners find clarity, and find clarity in a way that makes sense for them, for their family, for their stakeholders, which includes employees and other shareholders and their communities that they serve. A lot of people feel after a transaction that they let so-and-so down. Maybe they let their employees down, maybe they let their communities down. I had a guy in my show whose family business fourth generation chlorine cleaning product was sold in grocery stores and he could not walk down the aisle anymore. He couldn't bear to see that product under another name or by another. He said, yeah, there was a pride. We used to the small town and we had our name on the baseball team and people knew who I was. The identity that this particular person had his family name was on the company. Identity is a really big part of it, david. People go through almost like a withdrawal If they're not excited about what's next, this pull factor, what's pulling you forward to your next thing? If we're not excited about it, it can be really. You can imagine worst case scenarios. Those things do happen. But the in-between space is not that great either, for what makes me feel that I'm helping entrepreneurs? I've always orbited entrepreneurs with a great respect for the risk that they take. I've come to know family businesses as a category. Also. There's the founder-led, family-led, privately held company. I've worked in venture backed, so no offense to venture backed folks, but they're not really a focus for me. I'm really focused on call it the bootstrapped or family-led companies where they're the everyday entrepreneur making it happen. The sense of clarity clarity on three core types of goals is where we focus business, personal and financial. There's a lot of work to be done there. I think that's what makes me motivated, makes me feel appreciated by my clients. They are awesome people. I work with some amazing people that are doing really wonderful things for their community, for their family. They have excellent intentions. They just don't know how to put it all together. I don't either. I don't have all the answers, as I said earlier, but what I do have is I have an awesome Rolodex and I have an awesome way to bring professionals together and collaborate and help my client assemble a business owner transition team advisory team to help them make big decisions along the way. Again, this clarity is the number one thing that I think my clients benefit from. David: Yeah, no, that's really important because, as you talk about in the book, unfortunately 100% of the business owners are going to exit the business, just like 100% of us are going to exit this earth. I was thinking when you were talking about that fourth generation gentleman who couldn't walk down the grocery aisle, but it's one of those things, but it wasn't like he really had. He must not have had a great way to avoid that, because he wasn't going to run the business forever. So you come into what are the options? Basically, if somebody's not immortal, what are the options to exit a business? Because there's several paths, right? Laurie: Yeah, absolutely. Just to finish the statement with 100% of business owners are going to leave one day, there's a big however, you know. However, very few are planning for that day To leave on their terms, and when we have a plan, we're more likely to achieve it. That's just how it works, right. That's why we do strategic planning for businesses. So why don't we do strategic planning for our exit or our transition? And that's really the main advocacy I have in the book is let's have a process, let's have an understanding of what it takes. So to your question I think I address it quite a bit in one of my favorite chapters, which I think is chapter six, which is who should own your business after you, and it shines a spotlight on the different kinds of buyers. When I do workshops, david, I do webinars and I do in-person workshops, and I put up this slide and I have essentially three columns and I go through some examples of each bucket three buckets and people's eyes light up, they take out their camera, they start taking photos of this one particular slide and it is enlightening because we hear about certain kinds of buyers and we don't know that there might be other options out there and maybe not every option is a fit. So what I advocate for is let's understand what are some exit options for your company and which ones might be a better fit than others, and why let's prioritize those and let's come up with option A, b, c and if option A doesn't work out, then we know we've got an option B. It's just like in any negotiation If you have the power to walk away, then you know you're going to get the right deal for you. It's when you don't feel that you have any other options that you feel pinched. So that's why back to the conversation about the five or sixties if an owner passes away and the company is going in a tailspin, with employees leaving and the spouse doesn't know what to do, and they've inherited this company. They've never worked in it, it's a mess and the buyers come out like sharks and there's chum in the water. We want to avoid that. We want to avoid that. So, yeah, I mean we could talk about what. Who are the different kinds of buyers, if you want. David: Sure, yeah, because I mean, I, just off the top of my head, we've got passing it on to the next generation selling it to the employees. A third party buyer? What are some of the other options? Laurie: Yeah, let me just frame it out and that way, visually, I'm kind of working left to right as I talked about these three columns and I put it in that order for a reason. So the first column is strategic buyers, the middle is financial buyers and the one on the right is related buyers. So the examples you mentioned, family and managers would be in the related buyers category. Typically speaking, that is going to be more of a fair market value type of approach to valuing the business, of what price you might expect for your business, and if you kind of go left on that chart then the price expectation should go up right. David: Strategic generally not always generally speaking, will pay the most. Laurie: And why is that? Well, and also, what's a strategic? So a strategic is an entity, it's a company, it could be a competitor, it could be a marketplace vendor, it could be a customer, it could be an adjacent industry to yours where they want to make moves, either geography wise, or into your industry, if they're not part of it yet. So those are strategic and, typically speaking and this was my experience going through a pretty big M&A transaction with a third generation company that we were acquired by a Fortune 50. And, believe me, they had an M&A playbook and when they're that big and they've done that many transactions, so for us it was understanding what's the fit, what will this look like? And for them, I'm sure, in their financial models, it was about leverage what assets do they keep, what employee teams might they cut and how do they gain some cost leverage? And so that's typical where these pieces of the business might be kind of bolted into something else. Maybe it's standalone, maybe it's bolted in, but that's typically why strategic can pay more, because on the back end, as they're modeling out their financials, they know what costs they're going to take out. We don't necessarily know that, but that's what they're looking at. Financial buyer most often we think of private equity firms, and private equity groups will invest on a time horizon roughly five to seven years could be longer and they'll want to buy low, sell high, and so in between, they're investing in that business to improve it, they're putting in management teams and they will take a larger entity, maybe keep it as a standalone and that would be a platform deal. And a platform deal may eventually have other firms acquired to tuck underneath it. Those acquisitions we call tuck ins or add ons. And because they are taking assets and putting them into something larger, you could say, oh well, that kind of sounds like the strategic. And the answer is, yeah, kind of does. So that's why, in a private equity deal, the hybrid, as we might also call it, could, from a multiple standpoint, look more like a strategic offer. So that's just a little financial nuance there. But typically speaking, private equity groups are going to be the biggest, you know, the biggest buyers out there. There's still a lot of dry powder and another big category that I like to spotlight. Well, there's two others I would put under this financial bucket. One is family offices might be investing in privately held companies in different asset classes. So, for example, I had a family office. Second generation was on my show and he talked about what he and his father's investment thesis is. And they're focused on warehousing, like storage, you know, storage unit for consumer storage so you can rent one for a year or whatever and put your stuff in it. So he liked they like that asset class because it has a recurring revenue model to it. And that's just one example. And what's really interesting, if you compare the time horizons for these investments, well, a family office is looking for a buy and hold, more likely than buying, selling a short period of time. So, as I said earlier about fit, this is where it's really important. If the seller doesn't want to be in a situation where it could be sold to the one fish and gobbled up by another. They want to be held for like a longer period of time and perpetuity. Then maybe they should look to you know, talking with family offices who are doing acquisitions in their space. So that's a category that is kind of under the radar and I just put a spotlight on in the book. And then the third one are ESOPs, which is a you know, think of it like an almost like a 401k program for your people. When they retire from your company, they're incentivized to stay, and when they retire they will get a distribution check, and so an ESOP is an interesting option for some other companies Again, not a fit for everyone, but it might be a fit for companies of a larger size with enough employee base, where, again, you're going to have a liability at some point to pay these people, so you have to be able to fund that. But what happens in that transaction is that the company becomes a tax-free entity, and so that's a real incentive, you know for companies to reinvest and acquire others, and it can be very positive for the culture too, yeah. David: I know quite a bit about ESOPs because you were kind enough to introduce me to Mike Silverman and in fact he and his partner, Matt were, I guess, in my podcast a few episodes ago and it's really interesting on some of the ESOP opportunities. And I'm glad you brought up the family office because, right, people don't think of that. Laurie: But when? David: I think about the. What I think of philosophically is the super family office. I think about Berkshire Hathaway's acquisition targets. But the problem is I think now they're up to where. When I started reading Warren's annual letters, they were looking for businesses with enterprise value, I think of like 25 million and up, and I think the last I checked it's half a billion or a billion and up. Just because $25 million companies don't move the needle for them. But yeah and it's kind of like their sales pitch is similar to the family office sales pitch. So I guess one way to think of it is, if you like being an aquire of Berkshire Hathaway but you're smaller than a half a billion dollars, then maybe a family office might make sense. But even then when you think about Berk acquisition requirements. They want a business that runs independently of them. They do not want to manage the business. So you're right back to. A business that can run without the owner is more valuable for everybody. Laurie: Yeah, they have the portfolio largely independent of each other. They've kept the brands, I think, pretty separate because they appreciate the brand and the competitive moat, as they like to call it, around that business. I think they look for companies that have a competitive market differentiation, so it makes sense that they don't muddle the water. David: Yeah. Laurie: Yeah. David: Have there been any positive surprises from writing the book that you didn't anticipate when you wrote? Laurie: it Surprises. Let me think about that. I think just the reviews have been so delightful and meaningful to me and I guess I just didn't think about it. I don't know that it's a surprise, it was just. Maybe I could say a surprise and delight just to see how this book is helping people or how they've shared told me that it's helping people. I think that has been a really lovely outcome. As an author, you put good in the world and you hope goodness comes back, or you hope that it's helping, but you don't really know unless people tell you, and so that's been really great, I would say. The other is with my clients. I have my clients and meet with them on a regular basis and I have clients that are reading the book and then when I meet with them they're like, yeah, I just read chapter five, let's talk about it. So this combination of I'm not going to quite do this myself, I'm going to read the book, I'm going to get knowledge, but I still want to work with someone to help me along the way, was really reinforcing that what I expected. I expected that, frankly, and I think it's important. I do think people can go through this book on their own and at some point in this call give, I'll give the listeners an option to how to make the most of it, but you can do it on your own. You can. What I think is human nature is we want someone to hold us accountable, and that's, I think, not again not necessarily a surprise, but very reinforcing. That is true and that's why just a kind of a pre announcement here I'm going to be creating an online course from the book so that it can help more people in a different way, and hopefully they'll watch the videos and they'll read the book, and I, what I'm aiming to do is reach a wider audience of entrepreneurs, not just the people who are, you know, three to five years out. This is really a book, I think. If you are beyond startup phase but you're growing your business, why not read this book and understand what it's going to take to create a more valuable exit when you're ready? So it's exciting. I'm planning to launch it in the first quarter of 2024. David: Oh, that is exciting. If somebody is interested in learning more about that is do you have any place for them to go yet, or are we too soon? Laurie: We are too soon, but that's a great idea. I should put up like a waiting list or something on my website, but the businesstransitionhandbookcom is the website page for the blog BusinessTransitionHandbookcom. Yeah, the businesstransitionhandbookcom is a page on my site, so they'll see all other pages too, but this is the landing page for the book, so what I might do is put up I'll put up a blurb at some point about awaiting this for the class. And yeah, no, I'm excited about it. Like I said, I aim to reach more people and help more people with it. David: Yeah, and you know that accountability is interesting, because one of the things I see with our clients is that one of the things that's interesting about our clients is that 90% of them have revenues between 10 and 100 million probably somewhere in the light of your clients and the vast majority of them do not borrow money. They've been financially successful enough. They've been able to, you know, internally find growth and because of in that, in addition to other reasons, and most of these also, it's a single shareholder, they don't have a board, and so these clients have zero accountability, like their only accountability is like to their family, to make sure that you know the monthly income is what they're hoping it would be. But you know, they don't have a bank to be accountable to, they don't have a board, they don't have other shareholders, so I can see where that accountability is something that they could be really helpful for them, that they don't really have anywhere else. Now, of course, they may have done that on purpose. Maybe they didn't really like being accountable. You know they were an accountable employee and then they borrowed money from the bank to start a business, so maybe they don't really like me. What do you think? Laurie: I have a client that's about 120 million revenue business in the call it food production space and he's very purposeful, has very good intentions for transition with his daughter over time and really wants to see her be successful in the company and grow with the company. And his partner, to his credit, said hey, not real name. You know, joe, you're going to want we should do a new operating agreement. You know your daughter's in the business now. She's doing a great job. We need a new operating agreement. And this operating agreement was sitting on my client's desk coffee stains. You know he literally had it in the corner of his desk. He told me he was there for nine months and then I met him in a workshop and then that was it. He said oh, that's it, I have to do something. I can't just keep looking at that document. And of course in the transition it's more than just the operating agreement. But it was so many other things too and he just the accountability was really good for him. He needed that. He really did because he had the intention to do it. It just was, you know, backburner and it was never the thing to do when all these other important things are common. Adam. David: Now that makes sense, and I just want to be clear businesstransitionbookcom or businesstransitionhandbookcom. Laurie: I just want to make sure I had it. Yeah, that's okay. It's the title of the book. Yeah, oh it's the. David: Okay yeah, I'm looking at the book. Okay, yeah, that is easy note to remember. What do you enjoy the most about your podcast? Trying to switch gears a little bit. Laurie: I love talking with people on my show about what's worked for them, what they've learned and what they would do differently and if I have an entrepreneur. I have two kinds of entrepreneurs that come on the show. One type is looking in the rearview mirror and that's where they'll get the lessons learned right. We really learn a lot from others where it just didn't quite go the way they would have liked and when they have successes, of course we learn a lot from that too. So that's one type of entrepreneur. The other type of entrepreneur is looking forward and I've started to have more conversations with entrepreneurs and I'm asking them questions about their legacy and how their intentions are for their transition and legacy, if they're open to sharing it. I've had a gentleman came on my show. He's in the HVAC space and he had let his company, his partner, know his intentions to retire in three years and it was almost like this huge weight was lifted off his shoulders and now that it's out there, they can create plans, they can work on things and it's a little bit freeing to do something like that. Other people who aren't quite ready to say what it is they want to do. We talk a little more generally about what's important to them as they think about transition and leaving a meaningful legacy for their stakeholders or family or employees, and I'm really enjoying those conversations. I also talk with people who are experts in the industry on some particular topic, like tax advisors, financial advisors, legal advisors, and those conversations are wonderful because then, as I build my Rolodex of professionals that are able to be the best fit for my clients, it's a wonderful way to do business development and people who listen to the show have. You know, not every listener becomes a client, but I have had listeners reach out. They've listened to succession stories for a year, two years, whatever it is, and they reach out and they said Lori, a longtime fan would love to talk with you. And the resources that are available from the show are on my website, like business assessments and different articles and knowledge articles give plenty of videos and ask to help people learn about different topics. So I feel like this body of knowledge. You know this thought leadership type of approach where if people listen, they learn about me, they learn about what would they do, and then maybe they want to follow up. You know is pretty exciting. So I really like that. I like when I hear from my audience. They tell me what's an interesting topic to them or questions they might have, and I think the learning is really the main thing. I'm a continuous learner I always have been and I find that with every show I'm learning something. You know, I'm learning something every time and I just love that. David: Yeah, and I've probably listened to half of your episodes. I suppose and you know that episode you have with Mike Silverman was really memorable that you know have had to introduce several clients to Mike, and so I think having the advisors on is also a great idea and that's kind of how you fit short of on my show, right? We're not talking about the ICDisc program at all, but you're somebody who my clients outside the ICDisc may find value to this conversation and yeah and I'm like you I love to hear, to hear, people's stories on the Colby. I'm an 8643, which I don't know. If you know the Colby, I do know the Colby. So I'm. That's what's called high fact finding. Okay, so I lead with the fact finding. So for me, I'm always more comfortable, you know, asking questions than answering them. Maybe that's from childhood trauma, where I was forced to answer too many uncomfortable questions by my parents. I don't know. Well, I can't believe how the time has flown by. By the way, what's your website? Laurie: My website is thebusinesstransitionsherpacom. David: Oh, okay, I like it. Laurie: Thank you, you know. I just wanted to mention David, because if your listeners are finding this topic helpful, that's good, you know, and then they probably might be wondering well, what's the next step? Or you know how do I sort of take small nibbles as opposed to biting off a whole arm, and I would recommend that. You know, I don't want people to feel overwhelmed, I want them to feel reassured that we have a process and we'll work with them to meet them where they are and I guess the you know. The next thing would be to reach out and whether they are in a mode of transition and planning, which is what I'll call pre-M&A right, not that they have to sell, but just conceptually. And then, for folks who are anticipating selling to a third party or a family member, you know that transaction somehow some way. So I'm a certified Mergers and Acquisitions Advisor and can help steer them on that path, from the practical side as well as the emotional side, to get a deal done that makes them happy. Okay, I like it. David: If people want to reach out to you, is LinkedIn probably the best way. Laurie: Yeah, linkedin's a great way. Let me know that you heard me on the show. That would be awesome, and I think, david, you'd probably love to know that too. And they could reach me on my website. As you said, the business transition Sherpa, there's a spot to book directly with me. We can connect via Calendly. David: Okay, and then what's the website for the podcast? Laurie: Successionstoriescom is the name of the show and again, you can find it directly on my website in the podcast section. All the catalog of the shows are there, but it's in every type of platform, so if you're Apple or Spotify or whatever you like, you'll find it. David: That's great. So here's the surprise question I promised you. Laurie: So I have two questions left. David: And so here comes the surprise one. So if you could go back in time and give advice to your 25 year old self, what advice might you give? Laurie: I think I should have bought a business. David: Okay, so you would have encouraged yourself to buy a business. Laurie: Yes, when I was 25 and I was graduating from my master's program. It was all about the next great tech startup, yeah, and creating that from scratch. And that wasn't me, yeah. But I knew I wanted to be an entrepreneur. I just didn't feel like that was me in that mold. And I think now I'm more attuned to entrepreneurs through acquisition, you know as a category, and I didn't mention them, but they also would fall under the financial buyer category and there are many of them out there, not just in the US but around the world, who are interested in being part of that succession plan for a founder next generation leader. David: If you do you ever listen to the my First Million podcast. Laurie: I'd spent a while, but I'm familiar with it. You like that. David: They had a guest on recently. That is probably certainly my top five favorite podcast interviews ever and it's about a woman Sarah I forget her last name, but she was getting her MBA and decided she was going to buy a business with and she had zero money. She was going to buy a business you like these real estate advertisements? Buying real estate with no money down. She was going to buy a business with no money down and it's just a fascinating story of the process she went through through in just an astonishingly wonderful interview that I couldn't recommend highly enough. So apparently she was able to somehow go back in time and give her a 25 year old self that advice because she managed to pull that off. That's very cool. Is there anything we didn't cover that you wish we had? Laurie: Well, I think just to reiterate for people that when time is on your side, you can make an impact on your future and give yourself the space to work on your business and not just in your business. That would probably be my main advocacy and surround yourself with people that can help hold you accountable to the process and meet you where you are. So if they are just thinking about it, trying to figure it out, trying to understand what's their business worth today, yeah, that's a great place to start to. You know, try to figure out and model. Where are you now, where do you want to be and what's the gap and how are you going to get there? David: That's awesome, Laurie. I really appreciate your time on the show and I appreciate you taking the time to be on here. Laurie: Well, David, thank you for having me. I know this is my second time around you and I talked on a different show. We did. David: Yeah, we did. Laurie: It's lovely to be back with you and reconnect, and I'm just so glad that you are sharing this content with your audience, and I appreciate you, thank you. David: Yeah, it is my pleasure. Well, I hope you have a great day. Laurie: You too. Special Guest: Laurie Barkman.

Building Texas Business
Ep063: Decoding the Sports Industry with David Fletcher

Building Texas Business

Play Episode Listen Later Dec 20, 2023 31:05


In today's episode of Building Texas Business, join us for a fascinating discussion with our guest David Fletcher, General Manager of Lone Star Sports and Entertainment. David gives us exclusive insights into the sports business industry, highlighting the economic impact of major sporting events on Houston. We learn about LSSE's role in the city's sports landscape and the excitement for the upcoming Tax Act Texas Bowl. David also enlightens us on why Houston is a major sports hub, touching on upcoming events like the college football championship and the 2026 FIFA World Cup. Tune in for a thrilling exploration of the fast-paced world of sports business. SHOW HIGHLIGHTS Chris talks with David Fletcher, the General Manager of Longstar Sports and Entertainment, about the intricacies and realities of the sports business world. David describes the significant economic impact of major sporting events on the business community, highlighting their ability to draw in substantial revenue and tourism. We discuss the role of LSSE in the Houston sports scene and its involvement in exciting upcoming events like the Tax Act Texas Bowl. David addresses some common misconceptions about the sports industry, revealing the hard work, long hours, and sacrifices behind the scenes. We delve into what it means to be a good teammate in the sports industry, focusing on traits such as being coachable, ready, and positive. David shares insights on why Houston has become a hotspot for sports business, citing its prime location, diverse population, and robust infrastructure. We discuss the upcoming national college football playoff championship and the anticipation it's generating in Houston. David gives a preview of the 2026 FIFA World Cup, expressing his enthusiasm for the global event to be hosted in Houston. I explore personal topics with David, such as his first job experience, his preference for Tex-Mex over barbecue, and his dream 30-day sabbatical destination. David shares his passion for skiing in Park City, Utah, expressing gratitude for the support and involvement of the Houston community in their work. LINKSShow Notes Previous Episodes About BoyarMiller GUESTS David Fletcher About David TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Chris: In this episode you will meet David Fletcher, general manager of Longstar Sports and Entertainment. David shares his insights into the business of sports, as well as the economic impact major sporting events can have on the business community. David, I wanna welcome you to Building Texas Business. Thanks for coming today. David: It's great to be here, Chris. Appreciate the opportunity. Chris: So let everybody know, you're the general manager of what's called Longstar Sports and Entertainment here at Houston. Tell the audience a little bit about what that company is and kind of how it fits into the sports landscape here in Houston. David: Yeah, longstar Sports and Entertainment, or LSSE, as we try to call it with such a long name, is really the events production and management company at Houston, texans. So we are a primary outlet for event production, promotion and really a focus to our efforts to date around filling event dates at NRG Stadium. Most of what we do, chris, is in the sports space, although we have certainly done fair share of shows in the entertainment side, but college football, international soccer, rugby are all really big parts of what we do and inside of that we can do anything and everything that we need to do to make an event successful. We've promoted and negotiated and done our own events. We work with partners like ESPN or the Major League Soccer to host events at our building for them. We work with global brands like Manchester United, real Madrid or even Taylor Swift to bring events to our place in a variety of different ways. So really our focus is on bringing people together in Houston and we've done some other things over the years some investments and some events outside of NRG Stadium. But at our core we are a major part of making NRG Stadium one of the world class destinations for events and we're very proud of what we've been able to do over the last 21 years. Chris: That's what I love about kind of the focus at LSSC and the Texans for that matter is really a focus on doing things for the benefit and betterment of Houstonians. It seems to be kind of maybe a core focus. David: No question. I mean, look, at the end of the day, our organization is only focus on three things it's creating experiences, it's delivering incredible vowed partners and it's about doing great things for Houston. So, in that core capacity, major events, whether it be bringing Leon O Messi to play at NRG Stadium in an event like Copa America a few years ago I mentioned Taylor Swift we had a chance to host her in 2018, or Keddie Chesney or George Straits or Tim McGraw done shows with all of them over the years to the big time college football, like the Tax Act Texas Bowl that we host each and every year. Our focus is on really those three initiatives and I think they play into exactly what you said, which our organization has been all about, and the family the McNair family has been all about since day one. Chris: So, speaking of the Tax Act Texas Bowl, where we've got a match up right around the corner with Oklahoma State and Texas A&M excited about that and I would think that there is some excitement from those fan bases about being here at Houston. David: No question, our 18th year of hosting that college football postseason spectacular that happens each and every year at NRG Stadium. Last 10 years we've had the Big 12 in SEC and you mentioned it Texas A&M, who's obviously one of, if not, the biggest collegiate brand in this part of the world, going and taking on Oklahoma State, an old rival there from the Big 12 days and 20th ranked Oklahoma State Cowboys, I might add, who made it all the way to the Big 12 championship game this year and have the nation's best running back in Oli Gordon. A lot of things to be excited about on both fan bases. Texas A&M obviously a great brand, but had their struggles on the field relative to their expectations this year. A lot of transition, including bringing in a really exciting new coach and Mike Elko, and this is an opportunity for both of these teams, but particularly Texas A&M, to start their 2024 March to the championship this December 27th. Chris: Very good. So let's talk a little bit just about you and kind of how you got into the sports industry and you've been general manager now at LSE like 10 years. That's crazy because I can remember when you first took over the role. So 10 years goes by fast. David: It goes by real fast, chris. Look, for me sports has been an incredible part of my life, like many, since my early days of youth, I know as a kid. For me there wasn't a day that didn't go by literally a day that I didn't have to go to some practice or didn't get to go to some practice of some kind, played a lot of sports really important to my family growing up and ultimately developed a very strong passion for sport itself. As I got a little older I was in school at the University of Texas I realized that you could make a business out of it. You could create a life around the, not just playing on the field, and for me my playing days they definitely ended in high school, which is okay. I still get to this day, get to go out there and try and hack it with the best of them every once in a while, but I do it vicariously most of the time in working with my kids and coaching them and watching them grow. So for me, like I said, I knew sport was a big part of what I had a passion for when I graduated from UT. I had an opportunity to be to work for an NFL team in my hometown right here in Houston Texas. They didn't even have a name until a few weeks into my job, but that was the Houston Texans, and so coming out of UT and having the opportunity to be a part of building a professional team no less an NFL team from the ground up was something that I thought was really cool and I thought would be something that would help fuel that passion further, and it has. There's no question, of course, as a graduate coming out of college, many of us, myself included had bills to pay, and working as an intern at any sports team is not a great way to pay off those bills very quickly. But you know, I knew I had. I knew I had a goal in mind. I knew that I could make a business out of this if I really focused on making the most of the opportunities I had about keeping a positive attitude and really just taking every opportunity I could to grow, and I did that. I worked at the Texans during that first season, had an opportunity after that to get into a sales side where I did start making money working in media sales after leaving the team, spent a few years doing that for the University of Texas Athletics and then with the Houston Rockets, but I had a chance to return back to the team in 2010 and have been with the Texans in some way or shape or form ever since and that's been a lot of fun to really get to be in my hometown to work for the NFL team ups and downs included along the way, right, as we've had some great years and some not so great years. But going back to what I talked about earlier about being able to make an impact, particularly in my hometown, it's been an amazing opportunity for me and I still wake up every day and I know this is gonna sound really silly and I've grown a lot in my career, but we office at NRG Stadium and there are a lot of days where I walk in I'll hear the voice guy, david Brady, in my head going welcome to NRG Stadium. Chris: And it's just for me as I walk in the office. David: You know, it's a subtle reminder in my head that you know what. This is something pretty cool and this is something really special and been fortunate enough to be a part of a lot of things that have helped grow this community as a sports destination and then hopefully a lot more going forward. Chris: That's great. I mean it's a very unique position, unique opportunity. It relates to working for an NFL franchise. Right, there's only 32 franchises that you can work for, so let's talk again. So you work your way up and then you get this opportunity to move into leadership and I like to talk to guests, entrepreneurs, about leadership. So let's talk about that with you, kind of give us a little idea of your journey. Who were some of your mentors that you kind of molded your leadership style after? David: Well, I think mentors are so important, chris. They're so important to provide you you know reality, to provide you guidance, to provide you you know somebody who can ultimately be a resource, good and bad, in any situation. You know, for me it started with a good friend of ours and I still think about him all the time as Jamie Roots, you know, arguably one of the best in the business, president of the Texans for 20 plus years and spent spent really so much time, energy and effort in creating and ultimately growing the Texans brand, and so getting a chance to watch him and be a part of his team for almost a decade myself was something that you know, I've taken so much from. You know, the things that we focused on were about relationships, and that's really where it starts in any of these businesses is, you know, whether you're working with clients, teammates or employees and just trying to find ways to connect. You've got to be able to connect at all levels and build relationships with people, no matter what role they're playing in your business. So it's starting with relationships first. You know, I think, looking at how Lone Star has been approached I talked to Jamie about this a lot over the years Texans, so important and ingrained in the business of, or the fabric of, the Houston community. But what Lone Star has really helped do is expand the reach beyond just football and reach into what is already arguably the most diverse community in the country and bring them in to a place that they could celebrate, that the passions they have can create memories that last a lifetime and ultimately, yes, do business. You know, and so you know, lone Star helps us reach in. We've done, you know, 21 Mexican national team soccer events at our stadium. We've hosted Beyonce. We've had, you know, lsu take on Wisconsin or, you know, coming up, the national championship game for college football. Yes, there's some core elements that are consistent across every sport, every entertainment property, every football event that I just mentioned, but each of those tie people back to our business, they tie people into, or they bring people into, our community and they ultimately, you know, give us an opportunity to create even more momentum for the team and for Houston going forward. So, when I look at how we've approached that from a leadership perspective, you know it's really been thinking about how our business, my business, can impact people outside of what we do in the Texans. And with that, you know, like I said from the beginning, it starts with relationships. Chris: Hey, you hit the nail on the head because I think that's true. No matter what business you're in, if you're a one man shop or you're growing it to be bigger, it's all about relationships, like you said, with your external partners but more importantly with your internal teammates. So, talking on that subject a little bit, let's talk a little bit. I know you know you've built a team around you at LSSC to help put on and promote these events. What are some of the things you look for when you're going through that process? One maybe identify whether it's through the recruiting process or onboarding or, as they're there, in kind of the training to make sure you're making the best decision you can in building that team. And then maybe we'll talk about the other side is when you know maybe this wasn't the right fit, the harder decisions to make. David: Well, I think it starts. You know I mentioned it earlier, but to me there's really three core elements of being a good teammate, and I think these matter whether you're the intern or you're the leader of the organization. One be coachable right. Nobody that I have ever met, even the best in the business, know everything right, so be able to take advice, take criticism, learn from your mistakes, and that's something I think's really important. Two be ready, right. Be when opportunities exist, don't be afraid to raise your hand, don't be afraid to speak up, don't be afraid to go all in. You never know when an opportunity could be the best opportunity for you if you don't ask. So be coachable, be ready and then, from my perspective, just be positive, right. The attitude is the only thing that any of us can control, and my experience and my life has taught me that if you focus on the good, you have a lot better chance of getting there than if you focus on the bad. And that speaks to communication internally. That speaks to the way you approach how you position your business. It speaks to how you approach your competition right. Ultimately, at the end of the day, if you focus on the good, there's a better chance you're gonna get good. Chris: Like I couldn't agree more on that positive mindset, kind of staying positive, focus on the positive, learn from the bad and the negative maybe, but your primary focus has got to be on improvement in a positive way. Yeah, again, there's books written about it all over, but mindset makes a big difference. David: No question, no question. Ultimately, if you're a teammate for us and you've got those qualities, we feel like that's a great start to being a positive contributor to our group. Chris: Well, no just from being around the organization as much as I have. Y'all are known the Texans and LSSE. You're known within the sports industry of training people to be great and I guess that's a blessing and a curse. You get really good people but then people come and take them. David: Well, I've always had the mentality, chris. I know it's one that may fly in the face of common thought, but look, if anybody's being approached or anybody's being seen as having an opportunity coming from where we have brought them to, then we've done our jobs the other day and so we wanna keep as many of those on our team as we can, no question, but many times, for a variety of reasons, you have to accept that maybe reality, and so do the best of what you've got, be ready for the next opportunity, keep moving forward. Chris: So, working in the world of sports, what's one of the things you think is maybe the biggest misperception that most have about what you do? Cause it sounds pretty glamorous. David: Well, that's probably the biggest misperception. I think that, and that I have access to every ticket for every event all the time. My wife still sometimes even has that misperception, but I love her for it. No, look, I think the reality is that. I think that people do think that. Well, let me back up. I think there can be a perception that it is all glamorous all the time. Right, there's a lot of very visible and very talented people that are in the media all the time, that are compensated well, that are creating brands of their own. There certainly is an element to that, but I think that more often than not, it's a job that, if you don't have a passion for what you're doing, what you're doing, it's gonna be hard, because the hours are long, holidays are not really holidays. The players have negotiated a very significant salary, and that's not always the case for everybody else. And on the business side, and there are so many facets of what working in sports can be, and I think that's also, at the same time, an opportunity A lot of people look at. Well, you work for a team so that you're working in sports. Working in sports can be working for an agency that's working with a brand that is creating a partnership with a team. It could be working on the media side, bringing the events to life through social, digital and television content. It could be being a lawyer that negotiates contracts. It could be taking tickets and welcoming people to NRG Stadium, and so there's just so many different ways. There are over 7,000 people that work on a major event day at NRG Stadium. Just on the day, just on the day itself, right Between part-time staff, texans, employees, police fire, you name it. That's crazy. So it's such a big it becomes its own little city. So ultimately, there's a lot of different ways that sports can touch somebody. Most often, people just think of the players and what happens on the field. Chris: Well, it's nothing. You said when you started that, and I think it's true and it transcends all industries Passion To be really good at what you do, you have to have a passion for it, because it's long hours and putting in real hard time to learn and advance and grow your expertise at whatever it is, and so it has to start and stop a passion. David: No question, and if I look towards my life personally, it's been the fuel that's put me on the path to the successes that I've had. I mentioned it from the beginning. I mean, I started out as an intern with the Texans. I'm very proud of the fact that I'm the only intern or the only member of the executive team at Texans that actually started out as an intern with the team itself and that wasn't by accident. I mean, certainly there's a lot of good fortune along the way and I was able to produce results when needed. But I look at that as a testament to. Without the passion that I had, I wouldn't have been able to go through the 120 hour weeks as an intern, making minimum wage, I might add. You know working on, you know lifting heavy equipment or organizing, you know volunteer groups or you know putting together hours of copy that may not even be used, right. I mean, it's just those things that are just little steps along the way that, personally, I had to do, but I think they apply to anybody who has felt success in their business is that it starts with that passion. Chris: Yeah. So let's turn the conversation a little bit and talk about something that I don't think gets talked about enough, certainly at least here in Houston. We, when you step back and look at it, we, being Houston, which means you and others have done an amazing job of making Houston a true, like sports event destination. So we can talk about that a little bit, but what I want to do is connect that to how that the impact that has on the business community in Houston, because it's significant. David: It's massive, you know. So I'll start with a couple of things. One, you know, I think Houston's success as a destination for sport really points to. You can point to a lot of things that have been contributing factors, and they all have been geography center of the country, center of the continent, certainly a very, a very easy to get to market with all the infrastructure here from the great airports, obviously our traffic and our freeways. But the port you know, the infrastructure itself is fantastic, have served us well over the last 20 plus years with this latest renaissance, and we'll going forward. You've got a Some may need some tweaking, right? Chris: No question about it. David: I mean NRG is certainly, you know, a fantastic, world-class facility throughout its history. But that definition certainly has changed over the years and there's opportunities to continue to be the biggest and the best that we're working towards getting in the future. But the market seven plus million people in the DMA it's the most diverse market in the United States. All of that creates a lot of reasons why Houston has been a major destination. But I think the most important element is the leadership and the people and when I say people I mean the people at all levels that help contribute to the experience that's created when major events. Stakeholders are looking for a place to go and they come into Houston and they get to see it. We've got a number of groups that have worked together very successfully over the years the Texans and Lone Star, nrg Park, houston Livestock Show and Rodeo, all the major professional teams, harris County, houston Sports Authority, houston First Mayor's Office, city and Fire, the Texas Medical Center. All of those groups and many others have created a winning formula with how we approach the event experience, whether it's a festival, a conference or the Super Bowl. You throw in the hospitality community, which Houston First is certainly a driver of, but the thousands of unbelievable hotels, restaurants and entertainment options that are here in this community and how they collaborate and work together around these major events. And you see, no other market in the country can offer what we have as a collective package, and that's why you've seen Houston be awarded more major sporting events than any other market in the country over the last 15 years. That's impressive. Chris: I mean, people don't know that. They don't, it doesn't get talked about. David: They don't, they don't. There's certainly a lot of energy around. You get the first one right and then it just kind of dominos and we've been very aggressive as a community in pursuing those options. We've been very successful and when we get those options here to put our best foot forward, there are great resources at state level that certainly help with that and a spirit of collaboration with the governor's office to try and generate as many major events in the state of Texas as possible. So those are all winning points in the formula for success. But it really starts with the people and as we look at the future of the sporting event business, the major event business in Houston, there's a reason why we keep going after this and a big part of it is what you talked about the economic impact. Pick any number of these. These events Final four, college football, playoff, national championship game, fifa World Cup, super Bowl, taksac, texas Bowl, copa America I'm missing thousands of events that happen and are the Major League Baseball All-Star game, nba All-Star game, mls Cup. All these events that you see have really generated billions of dollars collectively for our community and economic impact. That's people coming to Houston and staying in our hotels. They're going and having a great time down in Galveston. They are eating at some of the world's best restaurants and that fuels our economy. We don't have the typical transient business that a vacation destination like a Miami or New Orleans may have, where entertainment in the community can spark a lot of travel. We are very much focused on conference events and entertainment opportunities and we do it better than just about anybody else out there. Chris: So let's kind of try to, you know, put some context around that. You mentioned, and obviously I'm well aware of the Texas Bowl, Taksac, Texas Bowl economic impact of that event to the greater Houston area. David: Annual basis over the last 10 years has been over $30 million on average. Every single year, we'll have anywhere between 25 and 30,000 people traveling in, staying in our hotels, restaurants, for three or four days ahead of the event. You've got people they're even driving in, too right, people that are coming in from the outer areas getting to celebrate that event. So that's meaningful, especially when that event specifically happens every year. It's right, it's a re-accuracy. End of the year, end of the year, when a lot of people are traveling for the holidays or maybe not doing as much, we've got an event that brings people into our community. That brings people here that may not be from a drivable distance. They may be coming from, you know, south Carolina, or Louisiana, or Florida, or Colorado Now that the Big 12 has expanded or Arizona, so you know, it really is something that fuels those businesses and gives our community as a whole an opportunity to celebrate around a major event, and we're proud of what that particular event has done, as well as, obviously, many others. Chris: Then we've got a couple of big events on the horizon. I want to talk about some of that. So let's talk about the first one, and that's the national title football college football playoff championship on January 8. It's a huge deal. It's the last one, I guess, of the 14 format, but you know what can we look forward to as Houstonians, with that game right around the corner? David: Well, it's a true celebration of college football, a week-long celebration. So you know, from a community perspective, you know the impact has already started. The Houston Love Teachers campaign that the Harris County, houston Sports Authority and the College Football Playoff local organizing committee has put together is has already generated millions of dollars in support for and recognition of teachers in our community, excuse me and that's an impact that will obviously pay dividends well beyond the game itself on January 8. When you look to event week itself, got four teams and four big brands that are hoping to descend upon Houston right after the New Year's. Chris: Yeah, yeah, so we've got what I mean. I think, any way you slice it, there's four or two teams that show up here are going to have big followings. David: Well, they are, and so you know what that means. It's not just about the 70,000 people that will fill up NRG Stadium. You know, again, the week long of activities, with free concerts every night during the weekend leading up fan fest down at Georgia Brown, which will have all kinds of interactive opportunities for fans to celebrate and enjoy the game of college football. You've got a number of initiatives around the industry itself that you know just further fuel Houston as a destination for business around the sport conferences and events and media opportunities, literally billions, if not trillions, of impressions showcasing our city. Chris: So you're gonna have the eyes of the world really on Houston for that kind of that weekend leading up and, I think, encourage the Houstonians right to get out and enjoy it yeah, no question, I mean it is. David: Houston is one of the best college football markets in the country the, the tax act, texas Bowl and many other events that we hosted. Our place and throughout the city. You've age rice, you know hcu tsu, prairie view. There's so much around college football that really Houston should be part of this destination, going forward on a consistent basis, and I think we'll show that as we bring everybody together here next month very good, yeah, david. Chris: So I think there's a lot to be excited about having the national title game be in our backyard, and I hope Houstonians will show up and take advantage of all the the events that are being planned yeah, it's gonna be an incredible week. David: We've earned the opportunity and I know, just like we did with Super Bowl a few years ago, with Final Four earlier this year, sonians love their sport. They will be out and enjoying another great celebration, and that's something that we should be excited about, and it's not the only one. You look down the road. We've got the world's biggest event coming just two years from now. Chris: As well, and that's the World Cup that's right. David: Yeah, fifa World Cup returns to Houston in 2020, or returns to Houston, comes to Houston in 2026. Houston, one of the venues in North America that was selected and you know just when you think about the opportunity to host five, six, seven, eight events in NRG Stadium with an average audience of a billion people and names like Messi and Neymar and Mbappe, who probably mean a lot to many people in this community but are treated as icons around the globe, and for Houston to have its name among the great markets of the world, at a truly global market which we know from a business perspective and from a from a population perspective. It is but to have that that verification on that type of stage is something that you know. As a community we also be very proud of and Chris Canetti in the World Cup office and Janice Burke and everybody over at NRG Park that ourselves included that helped to be part of making that a reality. We know we got a lot of work ahead to live up those expectations that's great. Chris: Well, david, I appreciate you, you know coming on and sharing some of these specifics. I want to ask you just a few more questions about you personally. What was your first job before days? You know the years before you were the intern of Houston Texas so I my first job I'm gonna go with. David: I've got a 1, 1a, all right. So my first job really was I worked at a Kroger in Kingwood as a checker or, sorry, as a bagger. But my my first quote real job I didn't have that one very long was I. I ended up being a server at Kingwood Country Club and the reason I say that was my first real job is that I worked in the service industry throughout my career. I mean, I still do today, obviously, but I worked in the service industry for 10 years, all the way through my time in Austin, going to school at UT, and I will tell you that nothing will teach you more about the world good and bad, than working in the service industry and I am so appreciative of the opportunities that I got to again. Start with something simple as that. But as a funny story, chris, I will say my crowning achievement as a server is I did serve as Don Johnson, the actor, don Johnson's waiter for the 10 cup rap party, because Tim Cup was hosting. That's right and so I do have that up by resume. Chris: So there you go see one of the benefits of living in Kingwood that's right. Yeah, one of the many I'll add okay, so since you work so much in, I guess, service hospitality, this will be easy for you. All right, you prefer Tex-Mex or barbecue? Tex-mex all day long all right, and this one's gonna be hard for you to answer okay maybe not. If you could do a 30-day sabbatical, where would you go? What? David: would you do? That is a great question. I don't think it's very. I don't think it's very hard for me at all. I am an avid skier and my family and I have been fortunate enough to spend a lot of time in Park City, utah, and I try and get the 30 days even now it's not possible to do in our work, but I love Park City probably more than any place else in this planet, and so I'd love to be able to go up my family for three days and just ski our behinds off got you. Chris: Well, that's great. That's a good one. David, thanks again for taking the time. Congratulations to you and the rest of the team back at Energy Park, the Texans LSSE, for all you do for Houston well. David: Thank you, chris, and we appreciate your support and involvement as well. Special Guest: David Fletcher.

The Safety of Work
Ep. 114 How do we manage safety for work from home workers?

The Safety of Work

Play Episode Listen Later Dec 17, 2023 40:16


Lastly, we delve into the role of leadership in addressing psychosocial hazards, the importance of standardized guidance for remote work, and the challenges faced by line managers in managing remote workers. We wrap up the episode by providing a toolkit for managers to effectively navigate the challenges of remote work, and highlight the need for tailored safety strategies for different work arrangements.  Discussion Points:Different work-from-home arrangementsSafety needs of work from homeChallenges of remote worker representationUnderstanding and managing psychosocial risksLeadership and managing technical risksRemote work challenges and physical presencePractical takeaways and general discussionSafety strategies for different work arrangementsThe answer to our episode's question – the short answer is that there definitely isn't a short answer. But this paper comes from a larger project and I know that the people who did the work have gathered together a list of existing resources and toolboxes and, they've even created a few prototype tools and training packagesQuotes:"There's a risk that we're missing important contributions from workers with different needs, neurodiverse workers, workers with mental health issues, workers with particular reasons for working at home and we're not going to be able to comment on the framework and how it might affect them." - Drew “When organizations' number of incident reports go up and up and up and we struggle to understand, is that a sign of worsening safety or is that a sign of better reporting?” - David“They do highlight just how inconsistent organisations approaches are and perhaps the need for just some sort of standardised guidance on what is an organisation responsible for when you ask to work from home, or when they ask you to work from home.” - Drew“I think a lot of people's response to work from home is let's try to subtly discourage it because we're uncomfortable with it, at the same time as we recognise that it's probably inevitable.” - Drew Resources:Link to the PaperThe Safety of Work PodcastThe Safety of Work on LinkedInFeedback@safetyofwork

North Avenue Church Podcast
Son of David, Have Mercy on Us | Matthew 9:27-34

North Avenue Church Podcast

Play Episode Listen Later Oct 16, 2023 37:15


The message has two points. I. The Faith of Two Blind Men (v 27-31) They believe Jesus is Messiah (Son of David) They believe Jesus is merciful They believe Jesus is powerful II. The Transformation of a Mute, Demon-Oppressed Man (v 32-34) [Mark got help from Daniel Doriani's commentary on the outline.] You can watch this message here.

Manager Minute-brought to you by the VR Technical Assistance Center for Quality Management
VRTAC-QM Manager Minute: Celebrate the National Disability Awareness Month with a DIF Career Advancement Grant Discussion - The Trifecta Approach with Virginia DARS

Manager Minute-brought to you by the VR Technical Assistance Center for Quality Management

Play Episode Listen Later Oct 2, 2023 38:34


In the studio today is David Leon, Director of Workforce Programs at the Virginia Department for Aging and Rehabilitative Services (DARS), and Kate Kaegi, Project Manager for the DIF. In recognition of Disability Awareness Month, the second podcast of our DIF series includes David and Kate explaining how Virginia's DIF grant was initiated, implemented, and adjusted to best reach their initiatives of placing 750 individuals with disabilities in STEM and healthcare careers, registered apprenticeships, and State, County, and City jobs. Learn about the challenges they navigated and what they recommend when applying for a DIF grant.   Listen Here   Full Transcript:   {Music} David: Don't be afraid to apply for a diff grant. It is an amazing opportunity to infuse energy and enthusiasm into your workforce. It is a chance to stretch, learn new skills, try new programs. You get to see staff flourish and more importantly, get some really cool outcomes for the clients we serve.   Kate: I was a little intimidated with the idea of RSA, but what I have found is this RSA is there to help us. They want us to succeed.   David: You can accomplish some great things.   Speaker1: Manager Minute brought to you by the VRTAC for Quality Management, Conversations powered by VR, one manager at a time, one minute at a time. Here is your host Carol Pankow.   Carol: Well, welcome to the Manager Minute. Joining me in the studio today is David Leon, director for workforce programs at the Virginia Department for Aging and Rehabilitative Services, or DARS, and Kate Kaegi, project manager for the DEP. So David, how are things going at DARS?   David: They are great. We are plugging along, working on our grant. A colleague has a SWITZI grant, so it's been neat to really try a bunch of new things here in Virginia.   Carol: Very cool. So how are you Kate?   Kate: I am doing spectacular. Thank you for having me here today.   Carol: You bet. So, David, you and I had a chance to visit in a podcast on work incentives counseling in April of 22. And just so you know, you were one of my top five downloads. And when I think of Virginia, I always think of you and all the amazing things that have been cooking all the time. You guys always have something in the hopper and this is no different. So I started a series of podcasts focused on the diff grants and career advancement, and you are the second in my series and happened to fall in October with a nod to Disability Employment Awareness Month. So I want to just give our listeners a little snippet again about the diff grant. And so this particular round, the grant activities are geared to support innovative activities aimed at improving the outcomes of individuals with disabilities. And the Career Advancement Initiative model. Demonstrations were funded in federal fiscal year 2021. They were intended to identify and demonstrate practices supported by evidence to assist eligible individuals with disabilities, including previous served participants in employment who reenter the program to do the following. They were looking at advancing in high demand, high quality careers like science, technology, engineering and math, or those Stem careers to enter career pathways in industry driven sectors through pre apprenticeships, registered apprenticeships and industry recognized apprenticeship programs to improve and maximize competitive integrated employment outcomes, economic self-sufficiency, independence and inclusion in society, and to reduce reliance on public benefits like SSI, SSDI, or Temporary Assistance for Needy Families and State or local benefits. Now, I remember reading in the announcement some of that sort of I thought it was disturbing data that provided the base for why RSA picked this particular area and chose to fund it. And they based it on the program year 2019, RSA 911 data. And some of the things that they said were participants that were exiting the program in competitive integrated employment reported a median wage of 12 bucks an hour and working like 30 hours a week. And the top ten most common occupations were reported. They were like stock clerks and they were order fillers, customer service reps, janitors, cleaners. I call it the whole Food, Filth and Flowers. So I know through this initiative they were trying to do more. So let's dig into what you guys have cooking in Virginia. David, tell our listeners a little bit about yourself. How did you get to VR?   David: Thanks, Carol. Started as a job coach years ago. We won't say when. It'll make me feel old, and I worked for a private nonprofit. I then assisted in Virginia, working with individuals, exiting a training center and moving towards community living. From there, I came back to the Richmond area to work for a community service board and again was a job coach and then worked within a sheltered work and day services program before coming to DARS, where I started with the Ticket to Work program and now have that the work incentives and a few grants and the workforce programs.   Carol: You and I have very similar backgrounds. I too was a job coach. I did work in a sheltered workshop for a while as well and all of that. It's always interesting how people find their way to VR. Kate, how about you? Why don't you tell our listeners a little bit about yourself and how you got to VR?   Kate: I kind of fell into this. A lot of times, similar to other people. Unexpectedly, I found out about East Carolina's rehab program and that they had a scholarship for people who wanted to get their master's. And I'm like, Oh, free money. So I jumped into that. Absolutely loved it. I did my internship at the Wilson Workforce and Rehabilitative Center. It was called something or a different title when I started back in the day. As I tell my kids, when dinosaurs roamed the Earth, I was there, started off there as an evaluator and then kind of moved across the state, became a rehab counselor in the field, have done transition counseling, substance abuse counseling, went back to Boca Vale for a little bit, even dipped my toes into the world of job coaching and worked with David for a period of time at the CSV, came back to DARS, worked with the Department for the Blind and Visually Impaired, and also, as an aside, also had joined the military during that timeframe on the reserve side. So I'm out of that at this point. So I have quite an eclectic background. As a supervisor once said that I couldn't make up my mind what I wanted to do, but it was all overall 24 years of work working with individuals with disabilities in a variety of areas. So it really kind of dovetailed well for me to work in the first dif grant that we received prior to this grant where I was a VMA or Virginia Manufacturing Association liaison for our grant. And when we were working on this Phase two grant, it was just pulling from what we've learned previously and growing from there. And so here I am.   Carol: I love it, it positions you really well for the work under this new grant. Very cool. Thanks for sharing that. So, David, why don't you paint us a picture of Virginia DARS How many staff do you have? About how many people are you all serving?   David: Okay, DARS comprises the Division of Rehabilitative Services, the Disability Determination Services, Aging Services. We have roughly 28 to 30 offices around the state and are currently serving just around 18,000 clients. If you include Pre-ETS in those totals.   Carol: that's a bunch., holy cow. I didn't realize you guys were that big.   David: Yeah, and that doesn't include however many cases DDS is handling or our aging or the other units. But that's a little bit about DARS, and I like to say we stretch from the Atlantic Ocean all the way to almost as far west as Detroit. If you go down to Bristol, Virginia, which is technically a little further than Detroit. So lots of types of environments and communities and very unique challenges in different areas.   Carol: Yeah, so you're definitely facing different geographical issues and I'm sure probably even economic differences. You know, if you're talking the coast versus maybe more of a rural area. So I'm sure there's probably some challenges there with even getting providers or how you're providing services.   David: It's interesting. One of the things we've been able to see in, for instance, Southwest Virginia, there is an economic center that's only 16 miles away from an office. But to get there, you go over three mountains and it could take two hours. So are those jobs really accessible to someone without a vehicle? On paper from Richmond, it might look like, why aren't we placing folks in this community out of that office? Well, it's a two hour drive each way, and that's the only way to do it. You mentioned at the beginning those top ten job areas. And one of the things we're really trying to challenge ourselves with now is giving people the information to make an informed decision about a career choice. But if they choose a career that might not look as great, what is the best potential version of that job? What is the job within that sector that actually could become a career? So at the beginning when we were starting to work on this, our agency had been in order of selection for years with categories closed and with the pandemic. That all changed. But the clients we were seeing didn't change and their goals didn't change. I think that's going to be a longer term conversation. But if we can do things to promote the best version of a position. And so I'll just give you one example. And our commissioner, other folks would probably say, why do we have so many folks who want jobs in food service or in this? Because typically they're low paying. Typically there's a lot of turnover. It's hard to become stable. One of the first projects we worked on in this grant was a partnership with a school nutrition program, and we've been able to help a few individuals enter into work in a kitchen at a school where they have the same hours. Monday through Friday. They have the opportunity for benefits. In one case, we couldn't find transportation. That school system was allowing the individual to take the school bus for that person. That's a really stable job and it's somewhere they can grow and thrive for years. So I do want to just say we have to think a little bit differently about what Kate or I or others might think of as a career. How do we find that best option for someone where there is room for growth, but equally important room for that time for stability to get to mastery, to then look at other skills and hopefully down the road they'd come back, not because they lost that job and need it again, but because they've learned so much that they want to go on to the next thing of their own accord.   Carol: Yeah, I like that you said that because I remember that when we visited before talking about that best version of that job. So not to mean that no one can work in kind of food, filth and flowers. I know I say that and it sounds sort of condescending and it's not meant to be. But we typically relied on kind of those occupations, really entry level. But I like that you're taking a spin on that and really looking deeper because we need folks to work in those occupations too. And there's people that love doing that work. But how like you say, can you do the best version of that? So you have benefits and you're looking at those long term like working in a school district, you can get retirement and all these different really awesome things that go with that. So, Kate, I'm going to switch to you. So big picture, break it down for us on your grant proposal and what you're hoping to accomplish with I know you had said you have three core components. Talk a little bit about that.   Kate: Sure. I do want to make a caveat that I love about this grant is it is a demonstration grant, meaning we have the opportunity to try out innovative products and projects across the state. I just want to put a caveat on that to keep that in your mind as I'm going forward here. So our main goal is to place 750 individuals with disabilities in federal, state, county, city jobs and or registered apprenticeships or also Stem and health careers. So we have those three main components on that. And when we looked at this grant and David worked on the development and the proposal for this, we really wanted to touch individuals that had been kind of missed in the first grant. And this I think, is something as we're doing a grant, you're learning all the time. And we wanted to make sure that we were hitting those unserved and underserved across the state. So individuals that aren't as plentiful in different areas. So say like Winchester has a large Hispanic population, does that reflect the number served in the actual DARS office? How do we get Spanish speaking individuals more involved in DARS? How do we get women who may only recognize those areas that you talked about that flower filth? And because that's what they're aware of, that's the work they've done in the past. So I just need another job in that area. How can we open up some possibilities? Have you thought about the IT field? Have you thought about advanced manufacturing and can you see yourself doing that? So providing those opportunities, it's a way for us to look at those unserved and underserved across the state. And we're defining that as we're going and we're looking at the census data, we're looking at who we're serving within each state. And then we're also looking at our plans, the plans that the rehab counselors are creating. What are those plans? What is the main goal? Overall we see a lot of customer service because it's kind of a catch all. What does that mean? Is that customer service as a helpdesk technician as opposed to just somebody as a receptionist? So we're really helping both the VRC, the counselor, and the candidate explore possibilities like that.   Carol: I like that. I just love what you guys are doing and really fundamentally getting down, digging in and really focusing on those folks that have been underserved or unserved and just taking that twist on the occupation because there's a wide range like within customer service, you have the job from here to here.   Kate: Exactly.   Carol: Yeah, that is very cool. Now, I know you all had some really weird hiccups in the beginning when you were starting out with this particular grant. So what were some of those kind of hiccups and how did you overcome that? And Kate, I'll probably shoot to you first on this.   Kate: So part of the thing that I didn't mention was is that the roles that our team players have. So we have a liaison with Department of Labor and Industry, specifically the registered apprenticeship side. So they have their foot in the DOLI world and the foot in the DARS world. We also have a team member who has their foot in the Department of Human Resource Management Liaison, and then also her toes are also dipping in the DARS. So we've had some different team members on that. We also have a quick response, counselor, somebody who can go in and respond to immediate needs of employers, of an individual that might be working with them, that has a disability, that might need some help, whether that's in a registered apprenticeship or on that particular job. During the first year we hired and we had everybody up and running and we had two team members, one had a medical emergency and had to move away from the position because there was some driving involved. And then unfortunately, we had Lisa Hanky, who passed away unexpectedly on us. So, you know, you get all getting that hiring going and then all of a sudden we lost two individuals, so we had to restart that process.   David: But Kate, if I can add to that, and I believe this is true for everyone in our round of this DIF funding, I believe we were told two days before the beginning of the project, it was about a day after that that, you know, many agencies coming out of the pandemic have had challenges with staffing and we had those challenges in our procurement division. So getting contracts signed, getting those staff replaced. But the other thing that has been a challenge and we're finally coming out of. We created three positions that this agency has never had, and it had meant that we had to learn how to provide quality support to two other state agencies in the context of working with DARS and similarly with our quick response counselors. So we created these positions that we had an idea of how they could work. But once someone got into those roles and was learning the other agency, we've had to be flexible in understanding how they can actually benefit our clients and our agency. And that has been a learning process.   Carol: You guys bring up a really good point because I think sometimes when folks are applying for the DIF grant, you're not recognizing off the get-go That first year can be a struggle because like you said, you found out two days before and then you get the money. And then as we know with any state government, it takes time to hire and like to get through all those processes. And so RSA may be on one hand going like spend the money and you're like, we're trying, but we've got to get through all our HR processes and all this crazy stuff. So it takes a little bit to get rolling in that first year. And I know we often on the TA world are talking with people as they're applying for grants going just know as you're going into it that first year, you're probably not going to spend the amount of funds you projected originally because there's just is a time factor and getting through all of that.   Kate: Absolutely. That was the one thought that David and I, if you know, we apply for another one down the road, maybe making that first year a little bit less intensive and spreading it out from year 2 to 5 because that's where the major work will be done.   Carol: Yeah, that's smart. Very smart. So I know you guys were talking about some challenges. What are some other particular challenges that you're experiencing right now?   Kate: Well, I'll get started on that piece. One of the things we have found similar to the staffing, the challenge that we had when we first started of hiring individuals, we're finding a turnover in staff in DARS. And so we are having a lot of younger counselors that have, in some cases don't have a rehab background. They might have a social work background. So we have a lot of training that we're doing and then redoing on that. We're having a training coming up in October for the VOC rehab counselors and we're getting kind of back to basics. What makes a good referral for our Pathways Grant, looking at those possibilities of not just that receptionist job, let's look at helpdesk. What are the opportunities that are out there? And so that has been kind of a challenge, is just retraining. And I think this is kind of normal across the board. But these rehab counselors are busy. They have a lot more documentation they have to put in Aware. There's a lot more individuals coming through their door because we have the rapid engagements, so they are overwhelmed. And how can we dovetail our services to best support them, how to make the referral process as easy as possible for them, what supports make the most sense for them? So that's been one of the interesting challenges.   Carol: So, Kate, have you guys done anything around just the way in which your staff or the support of those counselors, do you have like other staff that are kind of wrapped around them, whether you call them maybe a rehab tech or some sort of a case aide or whatever it might be that can help the counselors with sort of all the documentation requirements and that kind of thing. Have you done some work in that?   Kate: Actually, here in Virginia, we do have support. We have vocational evaluators, placement counselors and what they call employment service specialists that run the job club and things like that. And they can help support with some of the paperwork. But similar to other states that actually have like a rehab tech that would do some of the counseling or the that kind of thing, not as much. And each office is run a little bit different. That's part of the appeal. And what I mean by that is, is some of the offices might not have a vocational evaluator, some might have a placement counselor that might be covering more than one office so that there is enough differences on that piece. But yeah, that has been a struggle for keeping all of that work and getting it done for them.   Carol: Yeah, You're definitely joined by your colleagues across the country on that. I keep hearing that over and over. David did you have anything else you wanted to add to that about any of the particular challenges?   David: Yeah, I think we wrote this knowing we needed to do some things better and serve certain populations differently to get to where people had the same outcome regardless of gender, race, ethnicity. And that is still a challenge. We are learning that we have a long way to go to effectively serve those folks who have English as a second language. And when we started the project, we started with like a counselor advisory board to help not only create buy in, but inform us what the counselors needed. We have now shifted to an advisory board geared towards helping us do better with the Hispanic Latino population, and that English is a second language. So we're hoping over this next year, working with members of our state who are representative of those groups will actually help us figure out what services are going to be most likely to bring people in for help. What supports we will need to think about providing for those individuals to be successful. And again, it goes back to how do we help people see for themselves greater opportunities and careers than they might have.   Carol: So are you linked in then with your like your WIOA partners on your adult basic ed side? Like under that, you know, the English as a second language, Like they're more expert than us in working with that group?   Kate: Absolutely. One of our key partners is the Virginia Adult Learning Resource Center, who teach the adult ed, they help support them across the state when we get further along I'll talk about some of the projects that we're working with with them.   Carol: Yeah, that's excellent. I love that. So I know you guys are seeing some exciting results. What kind of exciting results are percolating up?   Kate: So one of the things that we found as we're moving forward is we actually had working with adult Ed, we had a program that we were doing Intro to IT, where we're starting a basic starting platform for accounting fundamentals, and we were ready to go. We had seven individuals in this first cohort, and one of the things we found was the individuals that we met, even though we just came through Covid with all of the tech training, we had individuals they knew enough to get on to Zoom and to do some items, but we really needed to step back and do some basic tech training. So, they had enough gaps in their knowledge that they couldn't move forward without some major help. So what happened on this is, is we stepped back and started to do some digital literacy training and they moved forward with that. And each of those individuals are now moving forward with the accounting fundamentals this summer. So stepping back, we're actually looking at what we're calling digital work skills training, which is really exciting opportunity for individuals to get started with North Star digital literacy. We're working on goal setting some soft skill development just to get them started on that end. So we have individuals that would typically not be able to go to a virtual training actually get started there. And what we're finding with that end is, is that we have some individuals, you know, those customer service people who just want to do clerical, they're getting introduced to IT. And so we've had a few individuals that have moved on to our next training, which we call the Max Career Lab. And Max Potential is an employer here in Virginia. And I think they go into other states as well, several other states. And what they are, they're a temp agency for IT employment. So they hire individuals to work with Dominion, to work with, you know, with all these employers doing various IT. But they have a unique hiring model. They actually have an opportunity where individuals come in and they go through a career lab five day, three hours a day, 15 hours of a career lab. Then they do an interview. During those five days, they do an overview of data analytics, networking, all these different career areas. So they'll do an hour and a half of overview of the career, and then they do an actual interactive activity that they break out in groups for. So it's a great way to explore the IT field. So we've hired them to actually run career labs for us. They do the 15 hours, then they get homework and then they have an interview assessment. So the interview is just like a typical interview that they run, but they follow up with what activities that they're interested in. So this has been a wonderful way for us to explore different IT areas and to help individuals determine what area of IT they want to do. Here in Virginia, we're blessed. We've got Nova, we've got a lot of IT careers, but counselors and vocal evaluators don't always know how to direct somebody into the right avenue because technology is always changing. You know, cybersecurity, cybersecurity, that's always a great one, right? Because we're right here in Nova. However, not everybody wants to do cyber. Have you thought of data analytics? Have you thought of the different networking positions? Have you thought of machine learning? You know what, all is out there? And so it's an opportunity for us to do a hands on career exploration and next steps with an actual employer running the sessions for us.   Carol: That's cool. Yeah, I hadn't heard about a career lab before like that. That is very intriguing because so many people learn much better, you know, by actually experiencing seeing what that's about because it can sound cool. You read about something like the cybersecurity was the big deal, but then you get into it and you're like, Oh, I don't really want to do that, you know? So giving them that opportunity, I think that's fabulous.   Kate: Yes, and we have had our first cohort. We had 25 people sign up. We had 22 complete the whole piece. That includes the interview.  Of that group we had six individuals. So they compare the group together, but they also compare them to the other public groups that they have across the board. So of those individuals, six are encouraged to look at direct work experience. The rest have been encouraged to do a few other activities, like maybe develop more professional skills or develop more tech training, possibly, you know, accounting fundamentals. We had one that decided they did not want to do IT training. And I'm thinking, what a great opportunity you now know what you don't want to do. And for us, that can be great, right? So we're looking at some other options for that young man. It has been a wonderful opportunity. We're now in our second cohort and our hope is, is to keep continuing this as we're going through this grant and to see how we can set this up once the grant is over.   Carol: Very cool. Have you had any surprises kind of as you've started this. I know you're in year two. Are there any surprises?   David: I think there are always surprises. This is right. Staff and surprises some of the opportunities that have come up. I don't think we anticipated. So we've shifted to take advantage. One of the big pieces of this grant is our focus on state hiring and the individual we hired for that aspect worked diligently during the first six months with them on an alternative hiring process through the legislation, had a go live date, whether we were ready or not. And what we didn't understand is during the first year, this process, it wasn't available to current state employees who may be disabled. That created a lot of issues for folks who were upset that they couldn't access this to move up within state government. We weren't able to change that ourselves, but it was changed in legislation. And starting in July of this year, we were allowed to offer a certificate of disability to someone who was currently employed and that has seen an increase. We've had roughly 1500 people request certificates of disabilities. I think part of what was surprising is what a great opportunity that has become as a referral source for DAR's. Roughly 300 individuals have chosen to get more information and receive VR services, and we are seeing that as a really nice piece of the process. Additionally, I think we finally had our first individual who went from what we call part time wage employment to full time classified, which was one of the intents of the process we developed. So it's nice to begin to see that work. But for Kate and I, we have to remind ourselves some of this might take two, three, four years before we really actually see these things that could be possible in action. And I think the other big surprise there is just how great of a partner our Department of Human Resource Management has been. They recently allowed us to present to 120 hiring managers and we will be a regular part of their monthly recruitment network action meetings. They've bought into our use of windmills training. They advertise it every month and we are co-sponsoring a job accommodation network training in October for them that they will heavily market to state hiring managers. So I think that's been really great. And then the other surprise, it turns out that our division of registered apprenticeship within the Department of Labor and Industry is moving to a new state agency. So we will see what that does. You know, you think things are pretty stable and static in certain ways, but they can change. That's been a surprise. But it's not a good or bad. It just, you know, might be a chance to actually work with more of our partners more directly.   Kate: And David, another surprise that we had was the use of data. We have been doing some trainings with the field and they you know, when you bring numbers involved, people get a little, oh, I don't know if I want to touch this, but what we found was the counselors, the evaluators, the placement, they enjoyed looking at this data. They ate it up. So the use of data as a tool to look at who we're serving, how are we serving them, has been an eye opener. At least it was a surprise for me. Now I'm a vocational evaluator, so I love data and I thought I was, you know, unique. But I'm not you know, everybody is, you know, surprisingly likes that data.   Carol: Yeah.. Well, and definitely how you present it to the field, you know, if you're just like blah, blah, blah, whatever, they really are interested because it's the culmination of their work, you know, so they see what's happening. It really helps to paint that picture and then they can react and respond and do things in a different way in response to that data. So I think that's smart that you guys are doing that. Now. I know you both had talked about shifting the conversation around employment and shifting that whole narrative on barriers to advancement and employment. Talk a little bit about that.   Kate: So one of the things that the counselors are really good at is, is when somebody comes in the door and they say, hey, you know, I need help finding work. But when we look at the definition of what we do, it's getting and but it's also keeping or advancing in your career. So what is that advancement look like? So if you have somebody coming in who I need a job right away, maybe this is where somebody is going to go for a stock clerk. But what about the idea of doing a quick training so that they can get a credential in the Certified logistics associate and then moving from there, maybe when they do that interview, now that they have that credential, maybe they can ask for a little bit of a raise. And what is the next step on that piece? So we've definitely looked at that. How do we make, as David said, the most of the career that you're looking at or the other areas that we've already talked about? Let's look at other areas.   David: One of the things that actually came from one of our offices that they wanted was we've heard more and more about attrition and attrition from application to plan, but also attrition from plan before employment or before successful closure. And we have created a group called Work Wise, which is designed for individuals who have just become employed to meet once a week in the evening, talk about their jobs, have an opportunity with a staff person to talk through issues, challenges. It's been really a powerful group, and I've been pleasantly surprised at how the individuals who choose to participate in a couple of cases did not want to stop going when their case was closed because of how valuable it was to in close to real time talk through things that were happening at work with someone with a VR counseling background. And that has been a really powerful group because it's also given folks to learn from each other and get to that stability and confidence to maybe also look for future opportunities. I know we're getting ready to also hold a salary negotiation training for folks. So again, let's help people think through and have those skills now that they may use now or they may use later when an opportunity to move up comes around. And similarly, we've started a group that we're calling money wise where we've partnered with a local credit union with that hope of how can we help make sure folks maximize their the benefits they choose to take advantage of from an employer. How do we help someone make sure that if there's a 401 match and it's X amount, that they do that much at the very least, Right. Those things that everyone is told, Well, if there's free money from an employer, you take it or if there's tuition assistance or some other thing, maybe there are things to plant some seeds. So someone would continue to move forward.   Carol: I can see how so much of this work that you are doing is so foundational and will be of benefit to, you know, your other colleagues across the country with the things you've uncovered and the things that you are working on, these different classes and groups and all of that. I'm sure other people are going, Gosh, I want to do that too. I think this will be amazing to help plant the seeds across the country. Now, David, I know you were concerned about implementing something that could withstand the test of time. And I know DIF grants are meant it's a demonstration grant. You're trying something out, but you want to also be able to carry forward these ideas into the future. So how are you guys structuring this to make that happen?   David: We really are thinking about sustainability and to Commissioner Hayfield's credit, that's been one of the things that she and Dale Batten have really stressed to us. It's great to do great work in a period of time, but how can we make sure that the things that have the potential to be value add or transformative continue and don't just end the day the funding stops? And we've really thought through many of the activities that we are creating, we are working on from at the beginning. What would this look like when there's no funding? How will we continue these? It's part of our partnership with Valray. We're working to get some of these pieces put into Canvas and set up through that learning management system. But within some of the positions, you know, one of our hopes is that the DHRM VR liaison could become its own full time non restricted position at the end. Similarly, we would hope that for the others, or at least those activities become a part of multiple staff strategically throughout the state. And that's one way we're looking at it.   Kate: And yeah, we're looking at the train, the trainers, also the tools that we're using. One of the pieces for vocational evaluators would be English language acquisition and knowledge. So there are assessments that are out there that can test somebody's English language, which is important for us to know if we're working with individuals and we're trying to place them on the job. So how do we get the tools necessary into the hands of the individuals and trained up for that so that that can be moving forward? So we're being proactive for these individuals that we hope to come into our doors a little bit more often.   Carol: That's excellent. So what do you guys see as your next steps? Where are you going from here? The point you're at right now, what are the next steps?   Kate: So a lot of our programming that we're doing right now is in partnership with adult ed. We see a great marriage between DARS and Adult Ed because Adult Ed works with a lot of individuals with disabilities already. They're adult educators. They can provide a little bit more support for our learners for credential training. They've got different things that are across the state. I'm working with our rehab center, Wilson Workforce and Rehabilitation to really figure out how can we marry these? Right now I'm coordinating all these trainings. Is there a way that the center can provide this? And this gives the center an opportunity to look at a virtual environment? What does this look like? We're not sure what it looks like, but we're giving a try to see for that next piece so that max potential with the employer, can that be run through Wilson so that it is open and able to run after the grant is over.   Carol: So for our listeners that would want to apply for a grant, but they've been afraid to do so. What advice would you give to other people?   David: Don't be afraid to apply for a grant. It is an amazing opportunity to infuse energy and enthusiasm into your workforce. It is a chance to stretch, learn new skills, try new programs and get some great outcomes. If there are things you've wanted to try and you don't necessarily have the budget to do or don't seem to fit a demonstration grant is a phenomenal opportunity, and when I came into this agency under grants and special programs, usually we had to worry about things like a match component. And if you have the chance to apply for a grant where there isn't a match and you are willing to be patient with that work, you can accomplish some great things. You get to know your partners better. You get to see staff flourish and stretch and more importantly, get some really cool outcomes for the clients we serve.   Carol: Love that infuse that energy and enthusiasm. I wrote that down. That was a great. You're like giving a commercial for the RSA DIF Grants, that's awesome.   Kate: One thing I would add on this too is when I first came in eight years ago on the other grant, I was pretty much kind of a newbie in the grant world, and I was a little intimidated with the idea of RSA. But what I have found is, is RSA is there to help us. They want us to succeed. And if you have a solid grant application and know what you want to do, they will help you give you some ideas. They invited other states to meet with you to kind of talk about different things. So they have been very good about sharing knowledge and they want to see us succeed.   Carol: That sounds so great. Well, I am going to definitely tell our listeners like they should reach out to you too, if they've got some questions to reach out to David and Kate, because you all have a lot of very cool stuff cooking, and I'm sure you're willing to talk to others about what you've been doing as they're thinking about maybe applying some of this, even though they may not have a DIF grant, but applying some of the things that you're learning into their own work in their states?   Kate: Absolutely. We're here.   Carol: Excellent. Well, I appreciate you both. Thanks for spending time with us. And I look forward to circling back with you a little bit in a couple more years as time flies on this grant and see where you're coming in at and those good results. So have a great day.   David: Thank you very much.   Kate: Thank you.   {Music} Speaker1: Conversations powered by VR, one manager at a time, one minute at a time, brought to you by the VR TAC for Quality Management. Catch all of our podcast episodes by subscribing on Apple Podcasts, Google Podcasts or wherever you listen to podcasts. Thanks for listening!  

Top Secrets
How to Avoid Being a Pest in Sales

Top Secrets

Play Episode Listen Later Sep 5, 2023 11:18


Jay: I'm not lying when I tell you that I struggle with this idea that I'm being a pest in sales. So I think it'll help my sales, I think it'll help my daily attitude towards what I do. David: Well, I'll tell you something, Jay, many of the most conscientious human beings feel this way. I mean, if you're one of those sales guys who, "Hey, everybody loves me," you're not even going to think of that. It's never even going to occur to you. So the people who are most likely to struggle with this are people who just want to help. They're there to provide a service. Jay: Yeah. David: They don't want to be a pest. And so really, most of the people who feel this way are the ones who are least likely to be a pest because they're not arrogant to begin with. David: Hi, and welcome to the podcast in today's episode, co-host Jay McFarland, and I'll be discussing the topic of how to avoid being a pest in sales. Welcome back, Jay. Jay: Oh, thank you for having me, Dave. This is a real problem for me. I always feel like a pest in sales, whether it's an email, whether it's a text, I always feel like they don't want to hear from me. And. it's been an ongoing problem. I'll just be honest with you when it comes time, okay? I got to sit down and reach out to people. I'm like, oh, do they really want to hear from me? Am I going to bug them? How do I get over that? David: Yeah, it's a great question. A number of years ago, I was doing a speaking presentation and Mary Lou Retton, the gymnast, was also speaking at the same event, and she told this story. It was just so great. I don't know if somebody asked the question, but it came up in her presentation where people were saying to her, when she was doing her routine, the person who went on before her did a really, really good routine. And so at that point, the pressure would really be on her to deliver a flawless performance if she wanted to be able to get the score that she needed. Jay: Mm-hmm. David: And so the question was how do you deal with that when this person delivers a great performance and you have to go on next? Don't you feel nervous after that? And her response, I'll never forget it. And this was easily 10 or 12 years ago this happened. Jay: Yeah. David: Her response was, "you know, I watched her performance and it was great. And I looked at it and I thought to myself, wait till they get a load of me!" Jay: Mmmm. David: And I was like, "wow, how much does that apply in sales?" Jay: Yeah, David: I mean, I think it applies every bit as much in sales as it does in gymnastics. If you go in with the idea of, oh, that person's better than I am, or they're not going to like me, or they're going to think that I'm annoying, or I'm rude, or I'm obnoxious, or I'm a pest, or whatever. If you go in with that mindset, then what you are likely to say, the way that you're likely to position yourself, all of those things are going to reflect that. But if you're able to go into a situation with the idea of "wait 'til they get a load of me," or at least "I have something valuable to offer." Now, any salesperson who doesn't feel like they have something valuable to offer should be either in another line of work or selling a different line of product. Right? Jay: Yeah. David: You need to be able to feel good about what it is that you're selling. And if you know that what you're selling is, ideally, better than the competition. If you know that you're going to deliver better than your competition, you know that you're going to be more responsive, you're going to be more concerned, you're going to be more caring. If you know all those things, then you owe it to the client to convey all that. And if you don't convey it to them, then you're doing them more harm than good, and you're doing yourself and them more harm than good. So, If you look at it from the standpoint of, "I'm here to provide a solution, I'm here to help,

Top Secrets
The Power of Storytelling to Increase Sales

Top Secrets

Play Episode Listen Later Jun 20, 2023 13:50


If our storytelling allows us to build trust, build credibility, build a bond, and increase sales, then we're telling the right stories. If it's just designed to be manipulative, then save your breath. David: Hi, and welcome to the podcast. In today's episode, co-host Jay McFarland and I will be discussing the power of storytelling in sales. Jay, tell me a story. Jay: Listen, I am a storyteller. I love to tell stories and I like to build when I tell stories, right? And so this is something that I use on a regular basis when I'm talking to people and it's not just telling a story. I think it's putting people in a story and what character are they in that story? And I think most people want to be the hero in their own story, right? David: They do. which gets to the whole idea of the hero's journey and all that kind of stuff for anybody who follows that sort of storyline or that Jay: mm-hmm. David: type of story arc, The Hero's Journey by Campbell, I can't think of his first name. But it's a book and it describes essentially the plot of most of the most popular movies of all time. Jay: Yeah, David: Right. Star Wars, Rocky, anything where you've got this person who is initially kind of beaten down and not winning, and then they come in contact with a mentor and then they learn new things and they have a confrontation and it might not go well, and then they learn some more things and then eventually they come out triumphant. There's a whole arc. And you're right, a lot of people want to be the hero, and the challenge as a salesperson is, in our storytelling, we can't be the hero. Mm. Right. We need to make sure that the person we're talking to is the hero and that we are the mentor or guide. We're not Luke Skywalker. We have to be Yoda. We have to be the one who's helping Luke to destroy the Death Star. Jay: Yeah. This is a really hard thing, I think for a lot of people. Because we want to go in and think we're the hero, right? I'm coming into your business. I'm going to provide something that is going to save the day, and then I'm going to walk away and you're going to praise me and you're going to pay me. But that's not what really is supposed to be happening, right? It's that I have the tools and the resources that you need to be the hero. David: Yes, and it's easy to forget that, particularly when we're trying to read ourselves in as the hero to each story. But one of the things that I've noticed in sales is that many, if not most of the very best salespeople are also the best storytellers. You can say. "Hi, do you know what time it is?" And instead of getting the time, you will get a fantastic story that might weave the time into it. Jay: Mm. David: But you're going off in all kinds of directions, and when they do it right, it's captivating enough that you sit there and pay attention. Jay: Yeah. But you pointed out "when you do it right." David: Yes. Jay: Right. so let's talk about that a little bit. Let's talk about your feedback on doing it right. David: Well, number one, as we already touched on, it can't just be all about you. You can't make the story about yourself. You need to make it about them, and a lot of that upfront comes from finding out about them, which means you're asking more questions, then you're answering, hopefully in the early stages. Jay: Yes David: Because customers always just want to know what it's going to cost upfront, and you don't generally want to lead off with that. So a lot of our storytelling will actually have to come from the conversations that ensue after we've gathered enough information. Jay: Yeah. David: To know what those stories need to be about. If we just go in and we meet somebody for the first time and we start telling them stories, that's probably not ideal. We need to still initially do some sort of diagnostic upfront to find out what their interests are. Now, of course,

Marketing The Invisible
How to Attract and Enroll the Clients You Love to Serve – In Just 7 Minutes with David Fagan

Marketing The Invisible

Play Episode Listen Later Jun 8, 2022 6:59


 Learn how you can craft the perfect pitch that will make people want you and what you have to offer Find out why having a proof of concept is crucial before investing in different advertisements Discover the importance of understanding your services' worth to ensure that you get the most out of your marketing and that your audience gets the most out of you Resources/Links: To find out how to craft the marketing that will cut through and get your ideal clients to want to know more about you and what you do, click here: Toptalentjv.com and Davidtfagan.com Summary Do you know that you have great service to give but just end up feeling like you're the world's best-kept secret? Have you been trying to pitch yourself to prospects but end up not being wanted? Are you ready to find out how you can gain more exposure and credibility and become one of the most influential in your field? David T. Fagan is the former CEO of Guerrilla Marketing, which sold over 23 million books in 62 languages. He is also the former owner of LCO Communications, a PR firm that has represented 58 Academy Award Winners, 34 Grammy Winners, and 43 New York Times Best Sellers. In this episode, David talks about how you can attract your ideal clients through the right words, the best strategy, and the perfect pitch! He also shares why you need to have proof of concept first before investing in different marketing strategies such as ads. Check out these episode highlights: 01:36 - David's ideal client: People in the advice business, you know. People that make money off the advice they give. You know, speakers, authors, coaches, trainers, but also real estate agents and attorneys and plastic surgeons and dentists. 02:07 - The problem he helps solve: There are a lot of people out there that are really the world's best-kept secret. And so, the challenge is for them to become more influential, to become more credible, and to get more exposure. 02:47 - The symptom of the problem: These are the people that are realizing that they're not standing out, you know. They're not attention-getting. They're not creating what we call "want". 03:49 - Clients' common mistakes before consulting David: They'll spend a lot of money on advertising, maybe Facebook ads, maybe SEO without really having their business model created, without really having proof of concept. 05:05 - David's Valuable Free Action (VFA): Every week, every Wednesday, we do what we call a top talent JV mastermind. And for the first 30 to 60 minutes, I help people learn how to talk about themselves. How do you talk about yourself? 05:50 - David's Valuable Free Resource (VFR): To learn how to craft the marketing that will cut through and get you clients: Toptalentjv.com and Davidtfagan.com 07:02 - Q: What's the big difference maker behind us and everybody else that kind of acts like us? A: we're really in the talent management business. You know, we manage talent. You know, we represent talent. We manage talent. Tweetable Takeaways from this Episode: “We want you to be the pursuee, not the pursuer.” -David FaganClick To Tweet Transcript (Note, this was transcribed using a transcription software and may not reflect the exact words used in the podcast) Tom Poland 00:10 Greetings, everyone, and a very warm welcome to another edition of Marketing the Invisible. I'm Tom Poland beaming out to you from the Sunshine Coast here in Australia, joined today by David Fagan. David, a very warm good day from Down Under. Whereabouts are you hanging out? David Fagan 00:24 I'm in that Arizona, United States! Tom Poland 00:27 Arizona! I bet you got sunshine right now. David Fagan 00:30 It was actually raining today, but we do have sun now. Tom Poland 00:33 OMG, it was raining in Arizona! All right.

Marketing The Invisible
How to Attract and Enroll the Clients You Love to Serve – In Just 7 Minutes with David Fagan

Marketing The Invisible

Play Episode Listen Later Jun 8, 2022 6:59


 Learn how you can craft the perfect pitch that will make people want you and what you have to offer Find out why having a proof of concept is crucial before investing in different advertisements Discover the importance of understanding your services' worth to ensure that you get the most out of your marketing and that your audience gets the most out of you Resources/Links: To find out how to craft the marketing that will cut through and get your ideal clients to want to know more about you and what you do, click here: Toptalentjv.com and Davidtfagan.com Summary Do you know that you have great service to give but just end up feeling like you're the world's best-kept secret? Have you been trying to pitch yourself to prospects but end up not being wanted? Are you ready to find out how you can gain more exposure and credibility and become one of the most influential in your field? David T. Fagan is the former CEO of Guerrilla Marketing, which sold over 23 million books in 62 languages. He is also the former owner of LCO Communications, a PR firm that has represented 58 Academy Award Winners, 34 Grammy Winners, and 43 New York Times Best Sellers. In this episode, David talks about how you can attract your ideal clients through the right words, the best strategy, and the perfect pitch! He also shares why you need to have proof of concept first before investing in different marketing strategies such as ads. Check out these episode highlights: 01:36 – David's ideal client: People in the advice business, you know. People that make money off the advice they give. You know, speakers, authors, coaches, trainers, but also real estate agents and attorneys and plastic surgeons and dentists. 02:07 – The problem he helps solve: There are a lot of people out there that are really the world's best-kept secret. And so, the challenge is for them to become more influential, to become more credible, and to get more exposure. 02:47 – The symptom of the problem: These are the people that are realizing that they're not standing out, you know. They're not attention-getting. They're not creating what we call “want”. 03:49 – Clients' common mistakes before consulting David: They'll spend a lot of money on advertising, maybe Facebook ads, maybe SEO without really having their business model created, without really having proof of concept. 05:05 – David's Valuable Free Action (VFA): Every week, every Wednesday, we do what we call a top talent JV mastermind. And for the first 30 to 60 minutes, I help people learn how to talk about themselves. How do you talk about yourself? 05:50 – David's Valuable Free Resource (VFR): To learn how to craft the marketing that will cut through and get you clients: Toptalentjv.com and Davidtfagan.com 07:02 – Q: What's the big difference maker behind us and everybody else that kind of acts like us? A: we're really in the talent management business. You know, we manage talent. You know, we represent talent. We manage talent. Tweetable Takeaways from this Episode: “We want you to be the pursuee, not the pursuer.” -David FaganClick To TweetTranscript (Note, this was transcribed using a transcription software and may not reflect the exact words used in the podcast) Tom Poland 00:10 Greetings, everyone, and a very warm welcome to another edition of Marketing the Invisible. I'm Tom Poland beaming out to you from the Sunshine Coast here in Australia, joined today by David Fagan. David, a very warm good day from Down Under. Whereabouts are you hanging out? David Fagan 00:24 I'm in that Arizona, United States! Tom Poland 00:27 Arizona! I bet you got sunshine right now. David Fagan 00:30 It was actually raining today, but we do have sun now. Tom Poland 00:33 OMG, it was raining in Arizona! All right. David Fagan 00:37 A rare day! It was a rare day. Made the news. Tom Poland 00:39 Amazing weather there. Okay, folks, David is a pretty amazing guy. He was the former CEO of Guerrilla Marketing. And I don't know if you've heard of that book, Guerrilla Marketing, but if you haven't, you should get it. It sold 23 million copies. It was in 62 different languages. He's also the former owner of LCO Communications, which was a PR firm that represented 58 Academy Award Winners, 34 Grammy Winners, and 43 New York Times Best Time Sellers. So, David knows a thing or two about marketing, about client attraction, which is really great because our title today, David, is, “How to Attract and Enroll the Clients that You Love to Serve”. The big difference between working with people that you think are dipsticks and people that, you know, you'd have for Sunday barbecue. So, let's get into it, David! Our seven minutes start now, sir. Question number one, who is your ideal client? David Fagan 01:36 People in the advice business, you know. People that make money off the advice they give. You know, speakers, authors, coaches, trainers, but also real estate agents and attorneys and plastic surgeons and dentists. And, you know, all of these people are paid experts in the advice business, and that's our ideal person. Tom Poland 01:56 Perfect! Similar wheelhouse to our listeners which is great. So, listen up, folks. There's going to be some gold in here. David, what's the problem you solve? That's question two, six and a half minutes left. David Fagan 02:07 There are a lot of people out there that are really the world's best-kept secret. And so, the challenge is for them to become more influential, to become more credible, and to get more exposure. And that's an “ice” acronym that we use that's really been changing people's lives and making them a lot of money. Tom Poland 02:25 Perfect! Thank you. Question three, I'm sure a lot of people relate to, you know, the world's best-kept secret. They've got like a 10 out of 10 in service, but they feel like they've got 2 out of 10 in marketing. Six minutes left. What would you say are the typical symptoms that people listening to this are going to be experiencing in their business? It kind of gives them a heads up that they need to find out more about what you do? David Fagan 02:47 Sure. Yeah, these are the people that are realizing that they're not standing out, you know. They're not attention-getting. They're not creating what we call “want”. You know, when they talk, people don't “want”. If you're going to attract and enroll, you need to create that “want”. And so, you know, they find themselves with not a lot of opportunities to shine, not a lot of opportunities to talk to the right people. And when they do talk to people, it's usually the wrong people. And they're negotiating and, you know, they're people who maybe can't afford what they're really worth. And so, it all kind of goes downhill from there. Tom Poland 03:24 Right. So, question four, you know, people that you've mentioned, the coaches or consultants or realtors, and so on, they're growth orientated, and they want to grow, and they want client demand. But they're probably going to try some stuff that doesn't work before they find your solution. So, what would you say are some of the most common mistakes that people are making before they find your solution? Four and a half minutes left. David Fagan 03:49 They'll spend a lot of money on advertising, maybe Facebook ads, maybe SEO without really having their business model created, without really having proof of concept. And you know, the other thing that they'll do too is they'll start to brag about themselves knowing that they need to stand out. And that's just not the key thing to do. I mean, I'll get into that more later on. But the bragging and talking about themselves a lot, if they do it wrong, it's just going to really turn a lot of people off. Tom Poland 04:24 And when you say the proof of concept, your business model hasn't yet been proven. And they've started doing a lot of marketing. Can you give us an example of what you mean by proof of concept? David Fagan 04:32 Yeah, if I have a very specific definition. It's three things. One, you have a product or service to sell. Two, you're selling that product or service at a profit. And three, people are so happy with that product or service that you're getting referrals and testimonials. If you have all three of those, you got to work on the business model. Tom Poland 04:50 A proof of concept and a business model. Thank you for that! So, question five, three and a half minutes left, what's one valuable free action that someone listening to this feels like they're the World's Best Kept Secret.? What's one thing they can do that'll make them a step in the right direction, a top tip if you like? David Fagan 05:05 Every week, every Wednesday, we do what we call a Top Talent JV Mastermind. And for the first 30 to 60 minutes, I help people learn how to talk about themselves. How do you talk about yourself? What's your elevator pitch? How do you quantify what you do? And so, if you go to toptalentjv.com, you could come to one of these weekly Wednesday workshops. They go for about four or five hours, and you can introduce yourself and talk about yourself, and be put in breakout groups. Tom Poland 05:33 And they're going to learn how to articulate their marketing message in such a way that people are going to get it. David Fagan 05:40 We have scripts that we use. We have different formulas that we use. And you get not just to learn those things, but practice those things– talking to other people. And we do it every week. Tom Poland 05:50 So, folks, the URL there and this was the answer to question number six, but because David's amount ahead of his time, we've already answered it. It's www.toptalentjv.com. Go to one of his meetings and learn how to craft marketing that's going to get cut through. It's going to motivate your ideal clients to want to know more. The other place you should go because we've got a little bit of time left, is davidtfagan.com, F-A-G-A-N, and T for Thomas, Terry, and Terrific. Davidtfagan.com. Because at the bottom, there's an opt-in there for a fabulous little book, which is all about the words that you can put into email subject lines, is good at conversations, is the word “genius”. Thank you, there it is, David T. Fagan. Get a copy of that as well. So, there are two resources for you. Toptalentjv.com and Davidtfagan.com. David Fagan 06:41 In both of those places, you can download this book for free. Tom Poland 06:46 Both of those places? David Fagan 06:47 Both of those places. Yeah. Tom Poland 06:47 So go to toptalentjv.com. And we are not an affiliate, not associated in a profit way directly with David. We just do this because we think he's got great stuff. Go get it! Question number seven, sir, 90 seconds left. What's the one question I should have asked you, but didn't? David Fagan 07:02 Probably what's the big difference maker behind us and everybody else that kind of acts like us? And the answer to that really is we're really in the talent management business. You know, we manage talent. You know, we represent talent. We manage talent. And we do that in three ways publishing, publicity, and show production. So, if you're in the advice business. You're a speaker, author, and expert. If you want more influence, credibility, or exposure, you might start looking at yourself as, “Hey, look, I'm a talent. I'm a starter. I need a finisher. I need someone who's going to finish what I'm starting. I need someone that's going to publicize me and promote me and publish me and market me.” And you know, that's really what we do. And it's actually a unique language or unique explanation that you're just not going to hear very much. And what we want to do is we want to get people chasing you instead of you chasing them. And so, there's this conversation shift. And we help create your message and your brand and the things that you're putting out so that people are going to be coming after you. We want you to be the pursuee, not the pursuer. Tom Poland 08:17 Thanks, David. Terrific! Tom Poland 08:20 Thanks for checking out our Marketing The Invisible podcast. If you like what we're doing here please head over to iTunes to subscribe, rate us, and leave us a review. It's very much appreciated. And if you want to generate five fresh leads in just five hours then check out www.fivehourchallenge.com.

Woodland Walks - The Woodland Trust Podcast
8. Queen Elizabeth Diamond Jubilee Wood, Leicestershire

Woodland Walks - The Woodland Trust Podcast

Play Episode Listen Later May 27, 2022 31:25


Join us at Queen Elizabeth Diamond Jubilee Wood, Leics to discover a thriving 10-year-old wood, chat royal trees and celebrate the Platinum Jubilee. We meet with site manager David Logan to explore the site's connections with the royal family, its special art features and some of the wildlife, sights and sounds you might encounter on a visit.  Don't forget to rate us and subscribe! Learn more about the Woodland Trust at woodlandtrust.org.uk. Transcript Voiceover: You are listening to Woodland Walks, a podcast for the Woodland Trust presented by Adam Shaw. We protect and plant trees for people to enjoy, to fight climate change and to help wildlife thrive. Adam: Well, like all good podcasts let's start with a story and this one obviously is about a tree. It stands in a quiet part of central London called Lincoln's Inn Fields – the centre of the legal profession. It sits, well, just outside of a gated 11-acres of parkland in one of the otherwise busiest and noisiest parts of the country. It was planted in 1953 and since then the well-heeled men and women of the legal profession, who worked there, often sheltered under its branches, passed it by, both ignoring it and perhaps enjoying it. In the 70 years that tree has been growing, there have been many monumental events and world figures who have both entered and left the stage. When it was first planted, Winston Churchill was Prime Minister. Since then, entering and often leaving the limelight – Elvis Presley, Martin Luther King, Yuri Gagarin, The Beatles, Marilyn Monroe, John F Kennedy, video players were invented, personal computers and mobile phones were created, and there have been 15 prime ministers. But in all that time, as a living witness to that history of the new Elizabethan Age, there has been only one monarch – Queen Elizabeth II. No one has played such a long-lived part in the nation's history as the Queen. The tree that still stands by Lincoln's Inn Fields is one of literally millions that have been planted in the name of the Queen. Trees, of course, have an even longer perspective on time than Her Majesty but both stand as witnesses and part of history stretching back and reaching forward far beyond the timescales most of us live by. It's very fitting, therefore, that on this Platinum Jubilee the Woodland Trust has partnered with the Queen's Green Canopy Project to invite everyone across the UK to plant a network of trees, avenues, copse, and whole woodlands, in honour of the Queen's service and legacy From a single sapling in a garden to a whole wood, the aim is to create 70 Platinum Jubilee Woods of 70 acres each – every tree bringing benefits for people, wildlife and climate – now and for the future. And so, I took this opportunity to visit the Trust's Diamond Jubilee Wood in Leicestershire, where I met the man responsible for looking after the woodland, David Logan. David: So, this is Queen Elizabeth Diamond Jubilee Woods and it's a flagship site of a scheme that the Woodland Trust has to celebrate the Queen's Diamond Jubilee. So, what we endeavoured to do, and we've successfully done. We created 75+ woods of 60 acres or more and they were the Queen's Diamond Jubilee Woods. And, this is the flagship one of those woods, making it the largest single-owned block of native broadleaf woodland in the National Forest area. Adam: What immediate, I mean, we've not really gone in yet, but what immediately surprises me is this is really quite, well, it's a very young wood. Yet, it already but quite mature I mean, were these species, was this all planted? David: You're looking at a hedgerow and beyond that are the trees at the same height as the hedgerow. So yeah no, it is to me, you know, a refute to people who say 'why bother planting woods because you never get to walk under the bows of the trees' but these, only ten years ago this was planted and when you get into the site, you're definitely in a wood now 10 years later. Adam: those trees are all on the quite tall… David: They must be 10-12 feet tall. Adam: Yeah, looks even taller to me but then I'm unsure. Okay, go on, lead on. Tell me a bit about then what this site sort of is, why it's special, you know, biologically special? David: Because of, it's big! You get that really wild feeling when you're here. So, you know, 267 hectares are completely devoted to nature. There's not, well, I don't think there's anywhere else particularly like that in this part of the country. And, so yeah, it does stand out. We get lots of different wildlife: lots of birds, lots of invertebrates, butterflies and a really good show of wildflowers as well. We will see some of them. Adam: And what was here before? Was it just an empty field? David: No. So, it was an open cast coal mine. So, the whole lot was owned by UK Coal and then the central part of it where the lake is was the largest hole in Europe! When it was done 750,000 tonnes of coal came out. Adam: Wow! So, I mean, there's no sign of that at all, because open cast mining can be a real scar on the land, can't it? I mean, it doesn't look pretty and then yet is there still a hole, was that all backfilled? David: That's all backfilled yeah so all of the substrate that wasn't coal will have been stored around the site and then all put back in the hole. Adam: How long have you been here then? David: So, I've been site manager for three years now, so.... Adam: Right. David: Yeah, seen it develop.  Adam: So, what sort of, I mean, three years is not a long time, especially in the life span of trees, but what sort of changes have you seen over that period? David: I think the biggest one recently is we took away all of the tree tubes and the fencing that the original kind of planting scheme relied on to protect it from deer and rabbits. Yeah, which has completely changed the way the site feels. So, no more sea of plastic tubes and no more fences to get in the way. So, you can get to walk where you like now, as well as the wildlife can get around the site a bit easier, and it really has changed the way it all feels Adam: In terms of the local community engagement and their use of this wood, what's that like? David: It's been great. Yeah, been great right from the outset, so, we had a lot of community involvement with the original planting and then again with extensions, voluntarily. Adam: And how well used is it by the locals then? David: Yeah, yeah, very well used, very rarely do you ever come to the car park and there's less than five cars in it. Adam: We're coming to, I can see... what's that building over there? That looks very pretty! David: So, that is what we call the welcome barn. So, I've got two buildings I've got on this site. I've got the welcome barn and I've got bird hide as well. Adam: Wow! So, what happens? Is there someone with tea and crumpets in the welcome barn for us? David: Unfortunately not no, but there are some interpretation panels that tell you the story of the site and a nice mosaic that was made by the volunteers as well, at the beginning of the site. And then a little compost toilet round the back! Adam: Laughs Okay that's good, good to know, good to know! And tell me about the bird hide then. David: So, the bird hide is yet another lovely building overlooking a lake. So, the lake was kind of formed by the sinking of the coal mine and the soil around it, and yeah, so just a nice bird hide, we'll go and look at it. Adam: What sort of birds do you get? David: The most exciting bird that we've had here is a hen harrier.  Adam: Right! Wow! And look, and this welcome barn, this also seems to be unusual for a Woodland Trust site? You don't normally see these things. David: Don't normally get a building no, I'm lucky to have two! Adam: And look at... really, really lovely sort of mosaic on the floor – Woodland Trust mosaic which sort of looks quite 1950s like... Do you know how long this…? This can't be that...? David: No no, that was built when the barn was built and the site was created in 2012 and it's meant to, kind of, reflect the Roman history of the site. So, we've got a Roman road that we just crossed over there, and then we've got two areas of our underlining archaeology which we know are Roman on the site. And so, we know there's certainly a lot of Roman activity, hence a Romanesque kind of mosaic. Adam: So, just explain a bit about where we are. David: So, these are called the groves – The Royal Groves – as part of Royal Groves Walk, and as part of the creation of the site. There was a royal Grove created for each year of the Queen's reign, so, they're in a series of circles and each one has a post and people can sponsor the grove and the post and then they get their little plaque added to the grove post for their year. I believe that certain years become more popular than others for various reasons and, but yeah, you'll see all these names. My favourite one, I think, is just this one. This grove is dedicated to the dahlia. Adam: That's fantastic laugh dahlia appreciation society sponsors. So, tell me a bit about the trees we're seeing here, there's clearly a whole mixture. David: Yes. So, they're all native broadleaf trees. We have got birch and oak going round. There is no ash in this part of the wood because ash dieback was kind of discovered just as the planting was going ahead and so we're lucky. There is a compartment in the north which got ash put into it. You might see the occasional ash tree that's self-set. So, we've got a Jubilee Grove Trail going on at the weekend for the... to celebrate the Platinum Jubilee that's coming up, encouraging people to, kind of, wander around the trails, and we're going to have these tree rings, sections of a tree... one per decade of the Queen's reign and with various large events that happen within that decade there will be a tree ring. Adam: Will that be permanent? David: No, it'll just be for the month of June and there will be a large wicker crown somewhere onsite as well. Adam: That's all happening next weekend? David: Well, late this week, next weekend. Adam: You've got a lot of work to do. I'm amazed you've got the time spare to wander around with me. David: Yeah well. Yeah, yeah there's always... it's always a rare commodity time I'm afraid Adam. Adam: Now you didn't design this here? You're a new boy! David: I am a new boy here! Adam: So, who actually designed it? David: So, it was a lady called Kerrie who is here, here now. She knows lots more about the groves than me as the designer and helped put it all in. Adam: Brilliant, hi Kerrie! Kerrie: Hi Adam. I think I don't think I want to say that I designed the wood but... Adam: I was building you up! Kerrie: You were, thank you, but the layout of the groves and... I was certainly involved in the design of the concept and then how we spoke to individuals about whether they would like to be involved in this. So, it was an opportunity for families to dedicate their own acre of woodland and help us develop this wood, as well as being part of a feature that enables you to walk through the Queen's reign. Kind of, physically walk through every year of the Queen's reign, so it's really special. Adam: Which is amazing, isn't it?  Kerrie: Yes, it is.  Adam: Tell me a bit about this royal connection because this wasn't, sort of, just a random, sort of, marketing idea. There's a really good basis for this royal connection isn't there? Kerrie: Absolutely, yeah so, at the Woodland Trust in 2011 we started a project to celebrate the Queen's Diamond Jubilee – so, sixty years of the Queen's reign – and we wanted to enable people across the country to plant trees and create woodland. We did that in a number of ways. So, we had this aspiration to create sixty Diamond Woods each of 60-acres in size, which is a big, really big commitment! And we also encourage people to create Jubilee Woods which were much smaller copses of trees in community spaces. And we distributed trees to schools and communities all across the country. Actually, it was hugely successful so the wood we are here at today is the Woodland Trust's flagship Diamond Wood. And then we had landowners and organisations and local authorities who also wanted to be involved. We needed to create 60-acre woods, we didn't know if we'd get to sixty actually inaudible we did get to sixty, we surpassed that, we had seventy-five woods at that scale created! Adam: So, seventy-five 60-acre wood Kerrie: Plus woods yeah, amazing, so, it's the first sixty of the Diamond Woods and then we have fifteen woods that we call the Princess Woods. Adam: Amazing, and so this was to commemorate that reign, and this is a lovely theme though! You can wander through the years of the Queen's reign. But the royal connection to woods is long and deep, isn't it? Kerrie: It is yeah. So, we were really fortunate that Her Royal Highness the Princess Royal was patron of that project. But there's a long and well-established connection between the royal family and tree planting, and as part of the project that we did we wanted to map all the woods that were created, and the trees that were planted. So, we copied... Adam: So, for the, for the queen? Kerrie: For the Queen's Diamond Jubilee. So actually, we took inspiration and sort of copied the Royal Record that had been done previously to mark a coronation. So, we actually have physically created and produced, published a Royal Record which is a huge red tome and that charts where all those trees are. And this is something that had already been done before the Queen's father. It's actually very heavy and so we have a copy at our office in Grantham, there is a copy in the British Library, and we gave a copy both to the Princess Royal and to the Queen.  Adam: There are lots of royal connections to trees and tree planting even beyond Queen Elizabeth. So, tell me a bit about that. Kerrie: That's right, yes. So, in the 1660s Charles II commissioned several avenues of sweet chestnut and elm in Greenwich Park and in 1651 he hid from pursuers inside an ancient oak during the English Civil War. and I think that's one of the reasons actually that you see so many pubs called the Royal Oak. Adam: Right okay because he hid in one? Kerrie: He hid in one yeah. Adam: Now you came... when did you see the hole in the ground? This was an open cast mine? Kerrie: Yes. Adam: You saw that? Kerrie: Yes, before any trees were here. So, I can't believe it's been several years since I've been here today, and it is now it's a wood! Adam: Yeah, there is no sign of that is there? Kerrie: No absolutely not, a complete transformation. Adam: It is amazing, isn't it? How quickly really that the natural world can recover. I mean, it needs a bit of help obviously and certainly in this circumstance. But no sign of what must have been really quite horrific bit of landscaping. Kerrie: Yeah. I think given how stark it felt at the beginning and when we first saw all trees grow in the ground here. It is genuinely remarkable for the transformation in a ten-year period of time! You can hear the birds, the trees are overhead, you know, we've seen butterflies, caterpillars... It really feels like nature has reclaimed this space it's really really exciting Adam: And when you start, I mean, look it's already done! It's a success! It looks fantastic, but when you started was this always a ‘this is gonna work' or at that stage did you think ‘this looks horrible, this might be a disaster, no one might come, no one might get on board with this project'? Kerrie: Well. I think we all had the vision, we all had hope. There are colleagues of mine that have been working at the Trust for longer than me who knew how this would look. I just didn't know that. This is one of the first projects I worked on so, to see it within ten years, the change that's the thing that I find you know really amazing! I thought I would have to wait much longer, and I'd be coming back with grandchildren to say look at this, but actually, here we are within a decade and it is transformed. Adam: Brilliant! Alright, well let's move on, let's find David again. Kerrie: Well, David on a previous visit has actually shown the Princess Royal around this wood. So, in terms of royal connections David has been a royal tour guide. Adam: Okay, so we have a living royal connection here? Kerrie: We do. Adam: Look here's a little bench, I might just sit here for a while. Brilliant, ah there's a dedication, what does it say? 'In honour of Sally Whittaker who believed in the beauty of wildlife and protecting it'. I have to say I always do like stopping at a bench and reading those dedications. Brief pause So, David, I'm not the only super important person you've taken around this woodland, am I? David: You're not the only super important person maybe, you are charming Adam! Adam: Ahhh thank you that's very sweet, very sweet laughs come on tell me about the even more important people you've taken around! David: So, yeah well, the most important person I guess would be Princess Anne, the Princess Royal, alongside Darren [Moorcroft] the CEO of the Woodland Trust. So, I was pretty nervous that morning, to be honest. The CEO, I'd never met him before and obviously a member of the royal family! But yeah no, I remember being nervous at the beginning, and then by the end of the day when I finally said goodbye to Princess Anne I was longing to spend a bit more time with her. She is incredibly charming, yes. Adam: Yeah. So, we come to a waymark, which? It's left, is it? David: Follow the blue and white arrows. Adam: Right so, if there are... there two different paths? Does blue and white mean anything or? David: Yeah. So, there's three waymarked trails around the site and we just happen to be happening on a little bit that's on two of those. So, there's the woodland walk which is the longest walk around the whole of the wood, and then there's the Royal Groves Walk. And then there's the lake walk as well Adam: Right so, explain a bit about where we're heading off to. You're taking me into the centre of the woods, it feels like? David: Yeah. So, we're continuing along the groves and eventually, we will get to a broad open vista, and you will be able to see most of the features of the site. Adam: So, we are already walking out to what looks like a less wooded area. David: Yes, we're kind of skirting the western edge of the site now and then... Adam: It's a big site, isn't it? how long will it take to walk over the whole thing do you think? How long are these paths? David: Like a good tour of every feature of the site here's looking at half a day really, probably, and that's with a bit of pace on. Adam: I've only got short legs laugh so I'd add a few hours. So, there's another one of these posts. Shall we just have a look? 1985 were through to, anyway so... David: Green woodpecker there, did you hear? Adam: Oh no wow! I missed out, I've been looking out for posts, I missed the green woodpecker. So, we're just coming out of a rather wooded area into – it suddenly opens up very dramatically – and look at that it's a very different view! So I can see a lovely wildflower meadow almost and then at the bottom a huge lake! A huge lake. So, this is where the old open cast mining just sunk down a bit and has since got naturally filled? David: Yeah. So, what you're looking at now is the epicentre of the open cast coal mine and obviously the wider landscape around it. So, yeah that's our lake and the end of the groves walk. So, you can just see the final three or four grove posts just heading off down the hill. And then this was an open area left to retain the view and then on the other side of the lake we've got a 5-hectare exclusion zone so there's no paths in that area. Just, no paths in the area, just to allow nature to completely have five hectares for resting birds et cetera. Adam: Let's go down because I think... David: We've got something else to show you. Adam: Sorry go on, rushing ahead, what is it? David: So, we got this piece of land sculpture that was created by an artist called Rosie Levitan and there are calls every now and again. We get somebody asking if we can put some kind of panel up to explain what it's all about, but the artist herself expressly asked that not to happen. So, I think she is more inclined to allow you to kind of figure it out for yourself or come to your own conclusions as to what it's all about. So, it was created with money from the Arts Council at the inception of the site. So, no money that could have gone into conservation went into creating this piece of art. But yeah, I'll leave you to... Adam: Sorry, this is it? This is it? David: This is it; I'll leave you to come to your own conclusions. Adam: So, when you said a piece of art, I thought you meant like a large statue of something out of wood, but actually, this is a sort of an earth tiered... almost like amphitheatre going downwards counts I think 5 tiers there. David: It's in a spiral so you can walk around the outside which takes a lot longer than you think! Adam: Laughs Yeah right I think I might take the direct route down, but to be honest, it seems like a brilliant place to put on a play! David: Yes! That's my thoughts as well, yeah I'd love to get a play here. Adam: Yeah! Have you ever gone down then done a soliloquy? David: Errr not, well, do you want me to? Adam: Yes, if you if you've got a piece ready laughing David: Unfortunately, I haven't. I mean I could maybe do a jaunty jig or something like that? Adam: Yes, well look, we're recording. David: Yes, well, no let's not! Adam: That's a shame laughing I think you probably come down when there are not many people around. So, if you ever do see a man in Woodland Trust clothing doing a jaunty jig at the bottom of this amphitheatre-like piece of art you know who it is and that he just wouldn't do it for us laughter very nice, very nice. Adam: So, you're gonna take me down to the lake now? David: Yeah, take you down to the lake. Adam: And it's there that we are going to meet one of your volunteers, is that right? David: That is right yep, a chap called Gerald. So, he's been volunteering with us on the site since the site was created and in various different roles Adam: And I've just gotta say it is beautiful walking down here because there are just huge numbers of buttercups aren't there? David: Yes, it is stunning, isn't it? Adam: It is stunning, it's like a sort of it's like a painting! It's like a painting, brilliant! David: This is our pond dipping platform. Adam: There's a cuckoo Bird song Adam: That's very good, so Gerald, sorry, we're distracting you. I can see you distracted by some swans coming over with their little babies. They're coming over to investigate you think? Gerald: I think they are yes! It's good to see it, I, they must be relatively young because a few weeks ago they were they weren't about so it's... Adam: Right. We'll let these swans investigate us as I chat to you so tell me. I'm told you do tonnes on this site. What was the local community's feeling when the trust took over this site and sort of explained what it wanted to do? Gerald: Generally, really good because you can imagine if you've got an open cast colliery on your doorstep a wood is a big improvement! Adam: Well, that's what I was going to say, because sometimes there is, sort of you know, some resistance or sort of misunderstanding about what is trying to happen. But here you go ‘surely this is going to be better for everybody'? Gerald: Yeah, so I think, overall, the mood was very good. There will be people who say yes but why don't you do this because this is better? We had some debates about whether we could put in some fruit trees, for example, and because we're in a sort of prime growing area in Leicestershire here. And there were debates about whether that was acceptable, whether they were native trees or not. But it was all good healthy discussion and it's interesting to see how the trees have grown and they have particularly grown well on this area here which was the open-cast. When you think – this all was disturbed ground that was put back – the trees have grown probably better here than they have in parts of what was the agricultural land. Adam: I have to stop because the swans have properly come up to us now. There they are! How involved do you get now, now it's well established what do you actually end doing? Do you come down here most weeks or? Gerald: It's a couple of times a month at least now. During the pandemic, it was sort of very limited of course, and well before that time, I used to do a monthly walk which was really... Adam: This is your guided monthly walk? Gerald: Yes guided, with a series of friends and colleagues. Adam: Do you have a favourite part of the wood? Gerald: Actually, probably near the bird hide just along from there. Adam: Why? Gerald: I don't know really. It's gotta mix, you got a mix with the water, you got the mix of the trees, a bit of the open meadowland here, and yes, the bird hide does add a bit of character to the place. I think we're lucky to have that there. Adam: I think David's waiting for me there. Shall we go over and have a chat with him? We've paused for a moment because we're just passing a black Poplar and a little plaque next to it saying it was planted by BBC Breakfast on 1 June 2012 in celebration of Her Majesty the Queen's Diamond Jubilee. Gerald: Yes, we have the two black poplars here. Adam: There's another one here. Was that planted by ITV for balance? Laughter Gerald: Oh no much more prestigious. Adam: Oh sorry, yes it was planted by Her Royal Highness the Princess Royal who is patron of the Jubilee Wood Project on the 1 of June 2012. And doing very nicely! Gerald: Yes, they are indeed! They've both grown quite a bit in the last year, I think. Adam: Very nice! So, what's the way to the bird hide? Is it round here? Gerald: Just go up to post on turn left. It's at the moment, hidden by a willow screen. It's a piece of willow art, although it's not particularly obvious Adam: You can see they've been bent over at the bottom haven't they to form a sort of willow fence. Gerald: If you were to look down on it from a drone it will be an outline of a skylark. It's a little bit overgrown and that's on our task list for next winter to prune that and try and weave in the lower bit. So, it's going to task our skills! Laughter Adam: We're going into the bird hunt now. We're in the bird hide. David, ironically having seen lots of birds the moment I get in here actually I can't – oh I think there is one over there – but do people, is this a good actual spot to be watching birds from? David: Yeah, yeah because it gives you that cover so the birds don't necessarily know you're here. It is quite a light bird hide though but it was created in conjunction with the Leicestershire Wildlife Trust, so they must have built a few bird hides, but yes. Adam: To be honest it's lovely weather today. But if it was raining a little bit this would be a fantastic place just to sit down for a while, wouldn't it? David: Yes, it would yeah. Just get out of the rain, I've done that a couple of times! Adam: Right, fantastic, alright well where are we going to next? David: So, there's just one last thing I would like to show you onsite which is just a short walk back up the hill. Adam: Okay, what is that? David: It is called the photographic plinth and so it's basically some encouragement for people to keep on visiting the site year after year. So, what we've got is we've got a plinth that you put your camera on and then a brick area that you supposedly stand on so you can get exactly the same photograph every year. You can visit the site and you can watch your family grow as the wood grows around you Adam: What a brilliant idea! What a brilliant idea. Okay, okay so David so there is a plinth. David: Yes, this is our photographic plinth. What it needs is updating, because obviously when this was made smartphones didn't exist and now you wouldn't really get a smartphone balanced on that! Adam: Yes, that's true David: It needs a little block bit putting on so you can rest a phone on it. Adam: So, it's not only the trees which have changed, it's the technology that it's referring to. I'll tell you what, I mean, obviously I'm going to have my photo taken aren't I? Can I give you my, I haven't got a camera, I do have my smartphone, so I'll go stand... I'll go stand here, and in a couple of years I'll come back and I'll have even less hair. Hold on a second – do I look better with my hat off or on? Pause Neither. I feel that was an undiplomatic pause I felt. David: What I was thinking is that I need to see both to answer correctly, that's why I was thinking. So, I'm gonna take it from the correct position. Click There you go Adam: I'm not confident that looked any good from the look on your face. I'm not going to look at it now I'll check it when I'm home. There is clearly a lot more to it than I've managed to explore today but what a wonderful treat, on a lovely, beautiful Monday, in this very special royal year! To come and celebrate that here! thank you very much David. David: that's quite alright Adam it's been a pleasure Footsteps Adam: Well, that was a great walk and thanks of course to everyone who arranged that. It's a fantastic place to visit especially in this Royal Jubilee year. If you know about these things, you can find it at grid reference SK 390132. The nearest train stations are Burton, Tamworth and Loughborough, although they're all a bit of a car journey, I have gotta say, from each of those stations. But if you're looking for a woodland perhaps nearer to you do have a look at the Woodland Trust website which has a special site to find a wood near you it is woodlandtrust.org.uk/findawood. I do recommend you do that until next time happy wandering. Voiceover: Thank you for listening to the Woodland Trust Woodland Walks. Join us next month when Adam will be taking another walk in the company of Woodland Trust staff, partners and volunteers. And don't forget to subscribe to the series on iTunes or wherever you're listening to us and do give us a review and a rating. Why not send us a recording of your favourite woodland walk to be included in a future podcast. Keep it to a maximum of 5 minutes and please tell us what makes your woodland walk special, or send us an email with details of your favourite walk and what makes it special to you. Send any audio files to podcast@woodlandtrust.org.uk and we look forward to hearing from you.

Screaming in the Cloud
Hard Charging Software onto the AWS Marketplace with David Gatti

Screaming in the Cloud

Play Episode Listen Later Mar 15, 2022 35:53


About DavidDavid is an AWS expert who likes to design and build scalable solutions that are fully automated and take care of themselves. Now he is focusing on selling his own products on the AWS Marketplace.Links: 0x4447: https://0x4447.com/ Products page: https://products.0x4447.com 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: Today's episode is brought to you in part by our friends at MinIO the high-performance Kubernetes native object store that's built for the multi-cloud, creating a consistent data storage layer for your public cloud instances, your private cloud instances, and even your edge instances, depending upon what the heck you're defining those as, which depends probably on where you work. It's getting that unified is one of the greatest challenges facing developers and architects today. It requires S3 compatibility, enterprise-grade security and resiliency, the speed to run any workload, and the footprint to run anywhere, and that's exactly what MinIO offers. With superb read speeds in excess of 360 gigs and 100 megabyte binary that doesn't eat all the data you've gotten on the system, it's exactly what you've been looking for. Check it out today at min.io/download, and see for yourself. That's min.io/download, and be sure to tell them that I sent you.Corey: This episode is sponsored in part by our friends at Sysdig. Sysdig is the solution for securing DevOps. They have a blog post that went up recently about how an insecure AWS Lambda function could be used as a pivot point to get access into your environment. They've also gone deep in-depth with a bunch of other approaches to how DevOps and security are inextricably linked. To learn more, visit sysdig.com and tell them I sent you. That's S-Y-S-D-I-G dot com. My thanks to them for their continued support of this ridiculous nonsense.Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. Today's promoted episode is brought to us by 0x4447. And my guest today is David Gatti, their CEO. David, thank you for taking the time to speak with me today.David: Thank you for getting me on the show.Corey: One of the things that I find fascinating about what you do and where you come from is that for the last five years, you've been running an independent company that I would classify based upon our conversations as pretty close to a consultancy. However, you've gone down the path that I didn't when I set up my own consultancy, and started actually selling software—not just software: Solutions—as a packaged thing that you can wind up doling out to various customers, whereas I just went with the very high touch approach of, “Oh, let me come in and have a whole series of conversations with people.” Your scale is a heck of a lot more. So, do you view yourself these days as a software company, as a consultancy, or something else entirely?David: So, right now, I did put aside the consultancy because yeah, one thing that I realized, it's possible but it's very hard to scale, it's also hard to find people at the same level. So yeah, the scalability of the business is quite hard, whereas with software sold on the AWS Marketplace, that is much easier to scale than what I was doing before, and that's why I decided to take a break from consulting and focusing one hundred percent on the products that I sell on the AWS Marketplace to see how this goes and how it actually works, and can a business be built around it.Corey: The common wisdom that I've encountered is that consulting, especially when you're doing it yourself, is one of those things that is terrific when you find yourself in the position that I originally did of your employer showing up and, “Knock, knock,” “Who's there?” “Not you anymore. Get out.” And there's a somewhat, in my case, limited runway as far as how long I've got before I have to go find another job. With consulting, you can effectively go out and start talking to people, and provided that you can land a project, it starts throwing off revenue, basically immediately, whereas building software, building packages, things that you end up selling to people, it's almost like a real estate business on some level, where you have to take a lot of investment up front to wind up building the thing, where—because no one is, generally speaking, going to pay you spec work to go ahead and build something for 18 months and come back and hope that it works.David: Right.Corey: I also bias towards the services because I'm bad at writing code. You, on the other hand, write things that seem to actually work, which is another refreshing difference.David: Yes. So, I did that, but now I have a guy that is just a Linux expert. So, you were saying that there is a high investment in the beginning, but what actually—in my case what happened, I've been selling these products for the past three years basically as a hobby. So, when I was doing AWS consulting, I was seeing, like, a company has a problem, a repeating problem, so I was just creating a product, putting it on the Marketplace, and then sending it to them. So basically, they had a situation where I can manage those projects to update when there's a need to do an update, and there was always a standardization behind that, right?So, if they had, you know, five SFTP servers, and there was a need to make an update, I was making the update on my image, putting it on the Marketplace, and then updating all those servers in one go in a much quicker fashion then managing them one by one, right? And so I had this thing for three years. So now, when I started doing this full-time, I have a little bit of a leap on what's going on. So, I already had a bunch of clients that are using their products, so that actually helped me not to have to wait three years before I saw any revenue coming in.Corey: I always thought that the challenge behind building something like this was that well, you needed to actually be conversant in a programming language; that was the thing that you needed to package and build these things. But I take a look at what you have on the AWS Marketplace—and I will throw a link to this in the [show notes 00:04:39]—but you offer right now four different offerings: A Rsyslog server, a Samba server, VPN server, and an SFTP server, and every one of those four things, back in my DevOps days, I built and implemented on AWS, generally either from scratch or from something in the Marketplace—and I'll get to that in a bit—that didn't really meet a variety of needs. And every single time I built these things, it drove me up a wall because I had to do this without, like, solving a global problem locally, myself, to meet some pile of needs, then I had to worry about the maintenance of the thing, making sure that the care and feeding continued to work. And it just wasn't—it didn't work for me in the way that I wanted it to. It never occurred to me that I really could have just solved this whole thing once, [unintelligible 00:05:28] it on the Marketplace, and then just gone and grabbed the thing.David: Exactly. So, that was my exact thinking here. Especially when your work with the client, this [unintelligible 00:05:38] was also great [idea 00:05:39] because when you work with clients, they want to do things as fast as possible, right? So, can they say, “I need an SFTP server?” Of course, it takes, you know, half a day to set up something, but then they scream at you and say, like, “Hey, do the next thing. Do the next thing. Do the next thing.” And you never end up configuring the server that you're making a reliable way, sometimes you misconfigure it because, oh I forgot this option, and now everybody on the internet can access the server itself.Corey: Wait, screw up a server config? That doesn't sound like something I would do.David: Well, of course not.Corey: Yeah, no one [unintelligible 00:06:08] they're going to until oops.David: Yes. You're amazing and you're perfect, of course, but I'm not. And I was seeing, like, oh, you know, in the middle of the night, oh, I forgot this option. I forgot this. I forgot that.And so there was never a, basically, one place when the configuration just correct, right? And that was something that sparked my idea when I realized the Marketplace exists. It's like, oh, wait a moment, I can spend few weeks to do it, right, put it there and never worry about it again. And so if when a client says like, “Hey, I need this,” I can deploy it literally, in less than one minute. You have any of those products that actually I'm selling up and running, right?And of course, the VPN is going to be a little bit slower because it needs to generate all the certificates at the beginning, but for example, the SFTP one is just poof, you're deployment with our CloudFormation file, provide username and password, and you're up and running. And I see, for example, this thing with clients, which sometimes it's funny, when there's two clients that they use the SFTP server only once a day for one hour. So, every day is like one new instance created, then one instance removed, and one instance created and one instance removed. And so it keeps on going like that.Corey: The thing that always drove me nuts about building these things out was first I had to go and find something on those rare occasions where I used the Marketplace. Again, I wasn't really working in the same modern Marketplace that we think of today when we talk about the AWS Marketplace. It was very early on, the only way that it would deliver software was via, “Here's an AMI, grab the thing, and go ahead and deploy it, and it's going to have an additional hourly cost on. It the end.” And more or less the whole Henry Ford approach of, “Oh, you can get it in any color you want, as long as it's black.”So, back in those days, I would spin up an OpenVPN server—and I did this at several companies—I would go and find the thing on the Marketplace from I think it was the OpenVPN company behind the project. Great, I grabbed the thing, it had no additional cost through the Marketplace. I then had to go and get a custom license file from the vendor themselves, load the thing in, then start provisioning users. And this had no integration that I could discern with anything else we had going on, so all of this stuff was built through the web config on this thing, there was no facility for backing the thing up—certificate, material, et cetera, et cetera—so if something happened to that instance or that image, or we had to go through a DR exercise, well, time to reprovision everyone by hand again. And it was annoying because the money didn't matter. At a company scale, it really doesn't for something like this unless you're into the usurious ranges. It does not matter.It's the, I want to manage this simply and effectively in a way that makes sense, and in many cases in a way that is congruent with our on-prem environment. So, “Oh, there's a custom AWS service that offers something kind of like this. Use that instead.” It's, yeah, I don't like the idea, personally, of having to use a higher-level managed service that I'm very often going to need the most, right when things are getting wonky during an outage scenario. I want something that I understand and can work with.And I've always liked, even if I have all the latest whiz-bang accesses into an environment, in production environments, I spin up something like this anyway, just to give myself a backdoor in the event that everything else breaks. And I really like how you've structured your VPN server as far as backing up its config, sharing its configs, you can scale it to more than one instance—what a ridiculous concept that is—and so on and so forth.David: So, it's not more than one—I mean, yes, you can deploy to more than one time, but the thing that—because again, when you were saying, like, companies don't care about the cost, right? It's more about how annoying it is to use and set up, right? And so I'm one of those people that when I, for example, see things like I've been playing with servers since the '90s, right, and I was keeping rebuilding and recreating everything every single time from scratch.And, yeah, it was always painful. It took always a lot of time. For example, our server took six months to set up the right way. And also the pricing [unintelligible 00:10:11] the competition has is quite aggravating, I will say. Like, it's very hard to scale above a certain point, especially for the midsize companies.And the goal with the Marketplace is also, like, make it as simple as possible. Because AWS itself doesn't make it easy to be on the Marketplace, and it's almost, like, crazy how hard it is. So, for anybody who will like to—who might think, like, “Oh, I would like to try this AWS Marketplace thing,” I would say should do it, but be super patient. You cannot rush it because it's going to take you on average six months to understand how even the process of uploading anything and updating it and managing it is going to take it because their website that they've built has nothing to do with the console and it's a completely custom solution that is very clunky and still very old-fashioned, how you have to manage it.Corey: Tell me more about that. I've never gone through the process of putting something up on the Marketplace. To my understanding, you need to be an AWS partner in order to use the Marketplace, correct?David: No you don't have to.Corey: Okay.David: No. Thankfully not. I hope it's not going to do this thing is not going to change. [crosstalk 00:11:20]—Corey: Yeah. I wound up manifesting it into existence by saying that. Yeah. If you're on the Marketplace team listening to this, don't do that, please. I really don't want to get yelled at and have made things worse for people.David: Don't give them ideas. [laugh]. Okay?Corey: Exactly.David: No, it's anybody can do it. But yeah, how to add a new product. So, the process is you have to build an AMI first. And then you have to submit the AMI to AWS by first creating a special AMI role—sorry, I always get confused AMI, [IAM 00:11:51], I never—IAM is users. Okay.Corey: I think we have a few more acronyms that use most of the same letters. I think that's the right answer here.David: [laugh]. So, either IAM or AMI, whichever is responsible for roles, you have to create a special role to give AWS access to your AMI. Then you submit the image to AWS providing the role that they have to use. They scan it and they do simple checks to make sure that you don't for example, have SSH enabled with regular users, do some regular scanning to make sure that you're not using an image from ten years ago, right, of Linux. And once you pass that, you are able to actually create your first product.Then you have to write your title, description provide, for example, the ports that needs to be open, the URLs to separate resources, the pricing page, which takes on average one hour to fill up because let's say that you have 20 instances that you support, and for every instance, you have to write the price for that instance per one hour. Then if you want to have a discount of let's say 20%—because you can set it by the hour, or someone can pay you for the full year. And so for the full year, you might have a discount. So, you have to have also the price per hour discounted by the amount of percentage that you want, and then you have to repeat it 40 times. Because there is no way to upload that.Corey: That feels like the internal AWS billing system in some respects. “Well, if it's good enough for us it good enough for our customers.” And—David: [laugh]. Exactly.Corey: —now, I have empathy for the folks in the billing system internally; their job is very hard, but that doesn't mean that it's okay to wind up exposing those sharp edges to folks who are, you know, paying customers of these things.David: Right. And it'd be a simple thing like being able to import the CSV file with just two columns and that would be perfect. But no, you have to do it by hand. There is no other way. So hopefully—Corey: Or someone has to. Welcome to the crappiest internship of your life.David: Exactly.Corey: It feels like bringing people into data entry for stuff like that is cheating.David: Exactly. So, you do that and then I don't remember exactly what the other steps are to a new creating a completely new product because I did that three years ago, and so now, I'm been just updating those products, but yeah, then they have to review your submission, and once everything is okay, then your product is on the Marketplace, and you can—are already accept everything. If you, for example, want to have the image also available in some specific regions that are not the default ones, you have to enable this by hand. I don't remember anymore how, but it's not obvious.Corey: And you have to keep redoing this every time they launch a new region as well, I would imagine.David: So, they say that you can have enabled the option to automatically add it, but it still won't work. Well, it will work, but… let's say, so in my case, I'm using CloudFormation. I gave a complimentary CloudFormation file where if you want to deploy my product, you go to the documentation page, you click the orange button, and you basically provide the parameters, and you click next, next, next and the product is deployed within a few minutes.And in that CloudFormation file, I have a map of every AMI in every region. Okay? So, if they add a new region and they automatically add the AMI there, then if you don't get notified that there is a new region, you don't know that you have to update the CloudFormation file, and then someone might say, like, “Hey, David, why this product is not deployed in this region.” It's like, “Oops. I didn't know that they have to update the CloudFormation file with a new region.” Right?Corey: Yeah, I'm a big believer in ClickOps, the idea of doing things in the console, but everything you're talking about sounds like a fraught enough process that I'm guessing you have some form of automation that helps you with a lot of this.David: Yeah. So, I hate repeating anything more than once, so everything in my book is automated as much as possible. The documentation, for example, how I structure it, there is a section that tells you how to deploy it by just using CloudFormation file and clicking next, next, next, next until you have it. And then there's also the option if you want to deploy manually because you don't trust what the CloudFormation file is doing, right? Of course, you can see the source file if you wanted to, but sometimes people are a little bit wary about big CloudFormation files.In any case, I have this option, but they have this option as a separate thing. So, AWS has an option where you could add a CloudFormation file that goes with your product. The problem is to be able to submit a CloudFormation file natively so they will take care of it requires you to get Microsoft Office 365. Because they give you an Excel file that has, I think, a few thousand columns. And for example, numbers under [unintelligible 00:16:40], when you export, you save the final—or sorry, you export it, it will cut around 500 columns. So, you miss, like, two-thirds of what AWS will likely to send you. And why they do that, I have no idea. I don't know if they still do it after three years, but when I was doing it, they told me like, “Hey, this is the file. Fill it by hand.”Corey: About that time period, that was exactly how they did large-scale corporate discounts on custom contracts is that they would edit the AWS bill in Excel, or if not, the next closest thing to it because there were periodically errors that looked an awful lot like someone typo-ing something by hand.David: What—Corey: Computers are generally bad doing that, and it took an extra couple of weeks to get those bills, which is right around the speed of human.David: Wow.Corey: I see none of those problems anymore, which tells me, that's right, someone finally upgraded off of Microsoft Excel to the new level. Probably Airtable.David: [laugh]. Maybe. So, I don't know if that process is still there, but what they did, like, then I realized, oh, wait a moment, I can just have a CloudFormation file in S3 bucket publicly available and just use that instead of going through that process. Because I didn't want to pay on a yearly basis for a product that I'm going to use literally once a year. That didn't make any sense to me and so I decided I'm going to do it this way. That's why, yeah, if they add on a new region, I have to go out and update my own CloudFormation file because I maintain that myself, whereas they would maintain it for me, I guess.Corey: The way that I see all of the nuts and bolts of the engineering parts of getting all these things up and running on the Marketplace, it feels like it is finicky; it is sharp edges that AWS is basically known for in many respects, but without the impetus of making that meaningfully better, just because there's such an overriding business reason, that—it's not like there's a good competitor for something like this. So, if you want to sell things to AWS people in most frictionless way possible, it reflects on the AWS bill, causes discounting, counts for their spend commitments, and the rest, it's really the AWS Marketplace is the only game in town for a lot of that.David: Right. So, I don't know if they don't do it because they don't have enough competition or pressure because to me when I first started doing this AWS Marketplace, it felt to me like more Amazon than AWS, right? It feels more like an Amazon team was behind it and not people from AWS itself. It felt like completely something different. Not to mention, yeah, the console that they provide is something completely custom that has nothing to do with the typical AWS console.Corey: I've heard stories about the underpants store division's seller tools as well; very similar to the experience you're describing.David: Mmm. And also the support is different. So, it's not connected to the AWS console one. The good thing about it, it's free, but it's also only by email. And so yeah, it's a very weird, clunky situation where I mean, I'm someone that, I guess, loves the pain of AWS. [laugh].I don't know if that's a good thing or a bad thing. But when I started, I decided, you know what, I'm going to figure it out, and once I do, I'm going to feel happy that I was able to. Maybe that's their goal: It's to give us purpose in life. So, maybe that's the goal of AWS. I don't know.Corey: There are times I really wonder about that where it feels like it could be so much more than it is, but it's not. And, again, my experience with it is very similar to what you've described, where it's buying an AMI, the end. But now they're talking about selling SaaS subscriptions on it, they're talking about selling professional services—in some cases—on it. And effectively, it almost feels like it's trying to become the Marketplace through which all IT transacting starts to happen. And the tailwind that sort of is giving energy to a lot of those efforts is, if you have a multimillion-dollar spend commitment with AWS in return for discounting, you have to make sure you spend enough within the timeframe, 50% of all spend on the AWS Marketplace counts toward that.Now, other cloud providers, it's 100% of spend, but you know, AWS is nothing if not very tight with the dollar. So okay, fine, whatever. There's a reason for companies to go down that path. Talk to me a little bit about the business aspect of it because for me, it seems like the clear win, in the absence of anything else is—especially at larger companies—they already have a business relationship with AWS. The value to someone selling software on the Marketplace feels like it would be, first and foremost, an end-run around companies procurement departments.It's just oh, someone has to click a button and they're up and running, as opposed to going through the entire onboarding and contracting and all the rest, manual way. Other than the technical challenges of getting things up and running on it, how have you found that it works as far as getting in front of additional customers, as far as driving adoption? You could theoretically have—I imagine—have not gone down the Marketplace route at all and just sold this directly on your website, click here to buy a license file the way that a lot of stuff I used to as well, and would have cut out a lot of the painful building an AMI and putting it into the Marketplace story. What's the value to being in the Marketplace?David: Yeah, so in the beginning, the value was basically that it's on the Marketplace, as I was saying, I was using it with pre-existing clients, so it was easy for me because I knew AWS images were there. So, it was easy to just click my own CloudFormation file and tell the client after one minute, “Hey, it's up and running. You have a bunch of profiles for your VPN. Enjoy and have fun.” Right?That experience, once you have it on the Marketplace, it's nice because it just works. And you don't have to do much work. Then I realized that AWS, in the search bar in the console, when you were typing, for example, you know, you type EC2, S3, CloudFormation, to find the service, what they were doing originally is when you were typing in the search bar, you were getting the services of AWS, and then when there was nothing left, they were showing the results of the Marketplace, which was basically amazing because you have primetime in the console with your product, you had to do zero marketing, and you get every week, took new clients that are using our product. And the trend was growing pretty, pretty well.And that was a proposition that is just amazing. Like, nobody has that because you can have Fortune 500 companies using our product without doing anything. It just—is it simple to deploy? Yes. Does it provide value? Is the price great? And people were just using them. Fast forward now; what happened is AWS changed the console. And instead of showing, after the services, the Marketplace, like, now they show the sub-section of the services, they show the results from the blog, the articles, videos, whatever, I don't even know what they've put there—Corey: Originally, you could search my name in that search bar, and it would pop up a profile of me they did for re:Inforce in the security blog.David: [laugh]. There you go.Corey: “Meet Corey Quinn. A ‘cloud economist'—scare quotes and all—who does not work here. And it was glorious. Now, they've changed the algorithm so it pops up. “Oh, you want Corey Quinn, you must mean IoT Core.” So, that blog post is still there, but it's below the fold because of course they give precedence to a service that they have that nobody uses or understands. Because, Amazon.David: Yeah, of course. And so that was awful because suddenly I realized that, oh, I'm getting less and less new clients because you know, after six months, one year, people are shutting off their things because they're finished using them, and I will not getting new ones. But at that time, I was doing [AWS 00:24:06] consulting, so it's like, oh, maybe it was a glitch in the Matrix, whatever. I got lucky.But then after a few months, I realized, wait a moment. When I was working in AWS, I realized that the console results changed, and I went like, oh, that's what happened and that's why I'm getting less clients, right? So, in the beginning, that was a great thing and that's why I'm actually paying you to promote my business and my products because now there is no way to put the products in front of customers because AWS took it away. And so that's why I decided to actually go full-force on this to make sure that I promote as much as possible because that one cool feature that AWS was providing, they took it away for whatever reason because blog posts are more important than their partners, [laugh] I guess.Corey: Well, it depends on the partner and the tier of partner, and it feels like it's a matter—to be clear, full disclosure: I am not an AWS partner; I'm not partnered with any vendor in this space, for either real or perceived conflict of interest issues, so I don't have a particular horse in the race. But back when there were a small number of partners, the network really worked. Now, there are tens of thousands of partners, and well, what winds up being surfaced? Customers, as a result seem to be caring less about various partner statuses, unless they're trying to check a box on some contractual requirement. Instead, they just want the problem solved, and it's becoming increasingly challenging to differentiate just by the nature of how this works.I don't believe, in 2022, that you could build almost anything, and put it on the AWS Marketplace in isolation and expect that to suddenly drive adoption by the fact that you're there. It feels, to me, at least on the other side of the fence, that the Marketplace experience is all about, you go there and you look for the name of the thing that you already know that you want because you've heard about it from other means, and then you just click it and you go, and that's the end of it. It's a procurement story; it's not a discoverability story.David: Right. And yeah, so that's sort of a bit disappointing, and I even made a post on Reddit about it to just bring this up to AWS itself to say, like, “Hey, UI change is pretty severe.” Because I mean, they get a percentage of every hour, the products are running, so basically they shoot themselves in the foot by making less money because now they're getting less products are being shown to potential customers. So, yeah, that's a disappointing thing.When it comes to also you ask what other way there is to show their products to potential customers, so there is an option where AWS can help you out. And when I talked to them, I think last year, they said that if you reach $2 million in sales a year, then they will basically show you around other potential customers, right? Which is a little bit disappointing because especially if you're a small company like mine, it's pretty hard to get to that $2 million in a meaningful time. And if once you reach that point, you might go like, “Hmm, how is this going to help me if you now show me in front of other people?” So yeah.And of course, I understand them in a sense that if they show a product from the Marketplace to a big company and the product turns out to be of poor quality, then of course the client is going to tell AWS like, “Why you're showing us something that just doesn't do its job?” Right? But it'd be nice to have a [unintelligible 00:27:24] when you say, “Okay, you're starting out. After a few years, so we can show you to this midsize clients.” You don't have to go to, immediately, Fortune 500 companies. That doesn't make any sense, right?Corey: And I still—even the companies that are at that level, I've talked to them about how they've grown their business, and not a single one has ever credited anything AWS did to help them grow. Other than, “Well, they threw re:Invent, so we spent extortionate piles of money and set up a booth there, and the fact that we were allowed in the building to talk to people was helpful, I guess.” But it's all through their own works on this, I'm not convinced, to be very direct with you, that AWS knows how to effectively drive sales and adoption of things on their own Marketplace. That is an increasing source of concern.David: Right. And then there's no plan of what to do with a company that is starting on the Marketplace, once it's a few—or it's already a few years and established in the Marketplace and a big one. Yeah, they don't have any way to go about it, which is a bit disappointing. But again, I like a challenge. I like the misery of AWS, so I'm just doing it. [laugh].Corey: No, I hear you. Would you recommend other people in your position explore selling on the Marketplace, given the challenges and advantages both that you've experienced?David: So, if you were to start from scratch, it will take you, like, three years—maybe not three years, but it's not something that should be the primary revenue source of the business if you want to go into the AWS Marketplace situation because you have to have enough capital to do enough marketing to see if you can get in front of people. If you already do some consulting like me, where I did some stuff on the side, and then realized, oh, people are using it, people like it, they get some feedback, the want new features, like, “Oh, maybe I can start growing this bigger and bigger, right?” It's not something that's going to happen immediately. And especially the updating process that happens, it can get quite stressful because when you make an update—so you have a version of a product that's working and running, right? Now, you make an update and you have to spend at least a week or even sometimes two weeks to test that out to make sure that you didn't miss anything because you don't want people to update something and it stops working right?Corey: You can't break customer experiences on these things.David: Yeah. No.Corey: It becomes a nightmare.David: Because especially you don't know if, literally, a Fortune 500 company is using your product or, like, a tiny company that has only ten employees, right?Corey: Your update broke the file server with a VPN means it's unlikely that they're going to come back anytime soon, too.David: Right.Corey: You're also depending on AWS, in some respects, to steward the relationship because you're you don't have direct contact with your buyers.David: No. So, that's important thing. They don't give you access to the contacts; they give you access to the company information. So, I actually do have Fortune 500 companies using my products, but yeah, there's no way to get in touch with them. The only thing that you get is the company name, the address, the domain that they used to create an email. So, at least you can get a sense of, like, who this company is.But yeah, there is no way to get in touch if there is a problem. So, the only way that you can notify the customer that there's a new update is when you make an update, there is a text area that you can say what's new, what did you change, right? And that's the only communication that you get with the client. So if, for example, you do a big mistake, [laugh], you basically have that just little text box, and hopefully, someone reads it. But you know, AWS is known for sending 20 emails a week for every account that you open. Good luck getting through that noise.Corey: Hope that you don't miss the important ones as you go through. No—David: Exactly.Corey: —I hear you. These are problems that I think are on AWS's plate to solve. Hopefully, someone over there is listening to this and will at least reach out with a bit of a better story. I really want to thank you for taking the time to speak with me today. We'll include links, of course, to this in the [show notes 00:31:09]. Where else can people find you?David: They can find us basically on the product page of what we sell. So, we have products.0x4447.com/. That's where, basically, we keep all our products. We keep updating the page to provide more information about those products, how to get in touch with us, we provide training, demos, anything that you want. It's very easy to get in touch with us instead of—sometimes when it comes to AWS. So yeah, we are out there, pretty easy to find us. The domain—the company name is so unique that you either get our website or—Corey: Easy to find on Google.David: Yeah, so we're basically—the hex editor. And that's basically it. [laugh].Corey: Excellent. Well, we'll definitely put links to that in the show [notes 00:31:50]. Thank you so much for taking the time to speak with me today. I really appreciate it.David: Thank you very much.Corey: David Gatti, CEO of 0x4447. 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 podcast, please leave a five-star review on your podcast platform of choice along with an angry comment that makes sure to mention exactly how long you've been working on the AWS Marketplace team.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.Announcer: This has been a HumblePod production. Stay humble.

Sinocism
Sinocism Podcast #4: The Economist's David Rennie on online nationalism, discourse power, reporting from China, US-China relations

Sinocism

Play Episode Listen Later Feb 10, 2022 54:44


Episode Notes:This episode's guest is David Rennie, the Beijing bureau chief for The Economist and author of the weekly Chaguan column. Our topic is online discourse, nationalism, the intensifying contest for global discourse power and US-China relations.Excerpts:I spoke to some very serious NGO people who've been in China a long time, Chinese and foreigners who said that this was the worst time for NGOs since 1989, and the kind of mentions of espionage and national security was a very serious thing. So then I had to make a decision, was I going to try and speak to someone like Sai Lei. Clearly he is an extremely aggressive nationalist, some would call him a troll and there are risks involved in talking to someone like him. But I felt, I'm one of the few English language media still in China, if I'm going to add value, I need to speak to these people.I had a very interesting conversation with a CGTN commentator…He said, I can't tell you how many Western diplomats, or Western journalists they whine. And they moan. And they say, how aggressive China is now and how upset all this Wolf warrior stuff is and how China is doing itself damage. And he goes, we're not, it's working. You in the Western media, used to routinely say that the national people's Congress was a rubber stamp parliament. And because we went after you again and again, you see news organizations no longer as quick to use that. Because we went after you calling us a dictatorship, you're now slower to use that term because we went after you about human rights and how it has different meanings in different countries. We think it's having an effect…One of the things I think is a value of being here is you have these conversations where the fact that we in the West think that China is inevitably making a mistake by being much more aggressive. I don't think that's how a big part of the machine here sees it. I think they think it worked….To simplify and exaggerate a bit, I think that China, and this is not just a guess, this is based on off the record conversations with some pretty senior Chinese figures, they believe that the Western world, but in particular, the United States is too ignorant and unimaginative and Western centric, and probably too racist to understand that China is going to succeed, that China is winning and that the West is in really decadent decline…I think that what they believe they are doing is delivering an educational dose of pain and I'm quoting a Chinese official with the word pain. And it is to shock us because we are too mule headed and thick to understand that China is winning and we are losing. And so they're going to keep delivering educational doses of pain until we get it…The fundamental message and I'm quoting a smart friend of mine in Beijing here is China's rise is inevitable. Resistance is futile…And if you accommodate us, we'll make it worth your while. It's the key message. And they think that some people are proving dimmer and slower and more reluctant to pick that message up and above all Americans and Anglo-Saxons.On US-China relations:The general trend of U.S. China relations. to be of optimistic about the trend of U.S. China relations I'd have to be more optimistic than I currently am about the state of U.S. Politics. And there's a kind of general observation, which is that I think that American democracy is in very bad shape right now. And I wish that some of the China hawks in Congress, particularly on the Republican side, who are also willing to imply, for example, that the 2020 election was stolen, that there was massive fraud every time they say that stuff, they're making an in-kind contribution to the budget of the Chinese propaganda department…You cannot be a patriotic American political leader and tell lies about the state of American democracy. And then say that you are concerned about China's rise…..their message about Joe Biden is that he is weak and old and lacks control of Congress. And that he is, this is from scholars rather than officials, I should say, but their view is, why would China spend political capital on the guy who's going to lose the next election?…The one thing that I will say about the U.S. China relationship, and I'm very, very pessimistic about the fact that the two sides, they don't share a vision of how this ends well.Links:China’s online nationalists turn paranoia into clickbait | The Economist 赛雷:我接受了英国《经济学人》采访,切身体验了深深的恶意 David Rennie on Twitter @DSORennieTranscript:You may notice a couple of choppy spots. We had some Beijing-VPN issues and so had to restart the discussion three times. Bill:Hi, everyone. Welcome back to the `Sinocism podcast. It's been a bit of a break, but we are back and we will continue going forward on a fairly regular schedule today. For the fourth episode, I'm really happy to be able to chat with David Rennie, the Beijing bureau chief for The Economist and author of the weekly Chaguan column. Our topic today is online discourse, nationalism, and the intensifying contest for global discourse power.Bill:I've long been a fan of David's work and the approximate cause for inviting him to join the podcast today was an article on the January 8th issue of The Economist on online nationalism. Welcome David.David:Hello.Bill:So just to start, could you tell us how you got to where you are today?David:I've been a foreign correspondent for frighteningly long time, 24 years. And it's my second China posting. I've been out there so long. I've done two Chinas, two Washingtons, five years in Brussels. I was here in the '90s and then I went off, spent a total of nine years in Washington, DC. And then I came back here in 2018 and I was asked to launch a new column about China called Chaguan, because previously I wrote our Lexington column and our Bagehot column about Britain and our Charlemagne column about Europe. They all have strange names, but that's what we do. And so this is my fourth column for The Economist.Bill:We last met, I think in 2018 in Beijing in what seems like before times in many ways at The Opposite House, I believe.David:And the days when we had visitors, people came from the outside world, all of those things.Bill:Yes. You are quite the survivor, as they say. Although there are advantages to not worry about walking outside and getting sick all the time. Although it's better here in DC now.David:It's a very safe bubble. It's a very large bubble, but it's a bubble.Bill:So let's talk about your article, the January 8th issue. It was titled “China's online nationalist turned paranoia into click bait”. And I thought it was a very good distillation of the surge in nationalists and anti foreign content that is really flooding or was flooded the internet in China. And you interviewed one of the people who's profiting from it because it turns out that not only is it good from a sort of a sentiment perspective, but it's also good from a business perspective.Bill:And that person Sai Lei, interestingly enough, then recorded your conversation and turned it into a whole new post and video about the whole experience of talking to a foreign correspondent. Can you tell us a little about the story and why you chose to write it and just to add the links to David's article and the Sai Lei article will be in the podcast notes.David:So I heard from friends and colleagues, a couple of things in two directions. One was that in the world of private sector media, a couple of reasonably well known explainer sites, popular science video companies had been taken out of business by nationalist attacks. One was called Paperclip, the other called Elephant Union. And their crime in the eyes of online nationalists had been to talk about things which are fairly uncontroversial in Western media, that eating beef from the Amazon or eating beef that is fed soy grown in the Amazon is potentially bad for the rainforest and maybe we should eat less meat.David:But because this was in the Chinese context, that China is the biggest buyer of soybeans, this explainer video was attacked as a plot to deny the Chinese people the protein that they need to be strong, that this was a race traitor attack on the Chinese. And it was outrageous because the West eats so much more meat than China. And so that was one element of it. And I heard that these companies had been shut down. The other was that I'd been picking up that this was an extremely bad time for NGOs, particularly Chinese NGOs that get money from overseas. And we'd seen some really nasty attacks, not just on the idea that they were getting money from overseas, but that they were somehow guilty of espionage.David:And there was an NGO that did incredibly benign work. Tracking maritime and Marine trash, as it floats around the coasts of China based in Shanghai, Rendu Ocean. I'd done a column on them the year before I'd been out with their volunteers. It was a bunch of pensioners and retirees and school kids picking up styrofoam and trash off beaches, weighing it, tracking where it came from and then uploading this data to try and track the fact that China is a big generator of the plastic and other trash in the oceans. They were accused of espionage and taking foreign money to track ocean currents that would help foreign militaries, attack China, that they were guilty of grave national security crimes.David:And they were attacked in a press conference, including at the national defense ministry. And they're basically now in a world of pain. They're still just about clinging on. And so these two things, you have these NGOs under really serious attack, and you also have this attack on online explainer videos. The common theme was that the nationalist attack, they were somehow portraying the country and its national security was a weird combination of not just the security forces, but also private sector, Chinese online nationalists. And in particularly I was told there was a guy called Sai Lei. That's his non to plume who was one of the people making videos taking on these people. He went after celebrities who talked about China should be more careful about eating seafood.David:This was again, sort of race traitors. And he was using this really horrible language about these celebrities who talked about eating more sustainable seafood that they were ‘er guizi”, which is this time about the collaborationist police officers who worked with the Japanese during the World War II. He calls them Hanjian, the s-called traitors to the Chinese race. Very, very loaded language. Went after a group that’s working with Africans down in the south of China, talking about how they faced discrimination. This got them attacked. They had talked also about the role of Chinese merchants in the illegal ivory trade that got them attacked by the nationalists.David:So I thought this question of whether the government is behind this or whether this is a private sector attack on that. There's the profits to be made from this online nationalism struck me something I should write about. So I talked to some of the people whose organizations and companies had been taken down, they were very clear that they thought that was a unholy nexus of profit, clickbait and things like the communist youth league really liking the way that they can turbocharge some of these attacks-Bill:Especially on bilibili, they use that a lot.David:Especially on... Yeah. And so there's this weird sort of sense that, and I spoke to some very serious NGO people who've been in China a long time, Chinese and foreigners who said that this was the worst time for NGOs since 1989, and the kind of mentions of espionage and national security was a very serious thing. So then I had to make a decision, was I going to try and speak to someone like Sai Lei. Clearly he is an extremely aggressive nationalist, some would call him a troll and there are risks involved in talking to someone like him. But I felt, I'm one of the few English language media still in China, if I'm going to add value, I need to speak to these people.David:Yes. And so I reached out to the founder of a big, well known nationalist website who I happen to know. And I said, do you know this guy Sai Lei? And he said, I do, I'll get in touch with him. Sai Lei was very, very anxious about speaking to the Western media. Thought I was going to misquote him. And so eventually we did this deal that he was going to record the whole thing. And that if he thought I had misquoted him, that he was going to run the entire transcript on full on this other very well known nationalist website that had made the introduction. So I said, okay, fine. I have nothing to hide. That's all good. I wrote the column. I quoted Sai Lei. I didn't quote a tremendous amount of Sai Lei because what he said was not especially revealing.David:He was just an extremely paranoid guy. And there was a lot of whataboutism and he was saying, well, how would the American public react if they were told that what they eat damages the Amazon rainforest? And I said, well, they're told that all the time-Bill:All the time.David:It was an incredibly familiar argument. It's on the front page of America newspapers all the time. And so he wasn't willing to engage. And so, I ran this. He then put out this attack on me. It's fair. Look, I make a living handing out my opinions. I knew he was recording me, was it a bit disappointing that he cut and edited it to make me sound as bad as possible rather than running the full transcript. I mean, I interviewed a troll and that was the thing. He attacked me on the basis of my family, which then triggered a whole bunch of stuff that was pretty familiar to me, a lot of wet and journalists get a lot of attacks and it was an unpleasant experience, but I feel that the added value of being here is to talk to people, who The Economist does not agree with.David:And his fundamental problem was that I was using online as a disapproving time. But my line with people like him, or with some of the very prominent nationalists online academics, media entrepreneurs, also with the Chinese foreign ministry, when I'm called in is my job in China is to try to explain how China sees the world. To speak to people in China to let their voices be heard in The Economist. And I absolutely undertake to try and reflect their views faithfully, but I do not promise to agree with them, because The Economist does not hide the fact that we are a Western liberal newspaper. We're not anti-China, we are liberal. And so, if we see illiberall things happening in Abu Ghraib or in Guantanamo Bay or-Bill:DC.David:Being done by Donald Trump or being done by Boris Johnson or Brexit, or Viktor Orbán or in China, we will criticize them because we are what we say we are. We are a liberal newspaper. We have been since 1843. And what's interesting is that online, the reaction was... For a while, I was trending on Bilibili. And that was new. And I take that on the chin. I mean, I'm here, I'm attacking nationalists. They're going to attack back. I think what's interesting is that the online of nationalist attacks were, I hope that the ministry of state security arrest this guy, he should be thrown out of China. Why is he in China? They should be expelled. This guy has no right to be in China.David:I think that at some level, some parts of the central government machinery do still see a value to having newspapers like The Economist, reasonably well read Western media in China. And it's this conversation I've had a lot with the foreign ministry, with the State Council Information Office, which is as you know, it's the front name plate for the propaganda bureau. And I say to them, we are liberals.David:We are not anti-China any more than we're anti-American because we criticize Donald Trump, but you know where we're coming from, but I do believe that if China is concerned about how it's covered, if they throw all of us out, they're not going to get better coverage. I mean, some of the most aggressive coverage about China in the states comes from journalists who never go to China and economists who never go to China. And I think that, that argument resonates with some parts of the machine, to the people whose job is to deal with people like me.David:What I worry about is that there are other parts of the machine, whether it's the Communist Youth League or whether it's the ministry of state security or some other elements in the machine who do also see a tremendous value in delegitimizing Western media full stop, because if you're being criticized and you don't enjoy it. Tactic number one, whether you are Donald Trump talking about fake news, or Vladimir Putin talking about hostile foreign forces, or the Chinese is to delegitimize your critics.David:And I do think that that is going on in a way that in the four years that I've been here this time. And if, I think back to my time here 20 years ago, I do think the attempts to go after and intimidate and delegitimize the Western media they're getting more aggressive and they're trying new tactics, which are pretty concerning.Bill:So that's a great segue into the next question. But first, I just want to ask the nationalist website that you said ran Sai Lei's piece that was Guancha.cn?David:Yeah. And so it's probably not secret, but so I know a bit, Eric Li, Li Shimo, the co-founder Guancha.Bill:Eric actually famous for his TED Talk, went to Stanford business school, venture capitalist. And now, I guess he's affiliated with Fudan, And is quite an active funder of all sorts of online discourse it seems among other things.David:That's right. And I would point out that The Economist, we have this by invitation online debate platform and we invite people to contribute. And we did in fact, run a piece by Eric Li, the co-founder of Guancha, the nationalist website a couple of weeks before this attack, that Guancha ran. And I actually had debate with some colleagues about this, about whether as liberals, we're the suckers that allow people who attack us to write, he wrote a very cogent, but fairly familiar argument about the performance legitimacy, the communist party and how that was superior to Western liberal democracy.David:And I think that it's the price of being a liberal newspaper. If we take that seriously, then we occasionally have to give a platform to people who will then turn around and attack us. And if I'm going to live in China and not see of my family for a very long period of time, and it's a privilege to live in China, but there are costs. If you are an expert, then I'm not ready to give up on the idea of talking to people who we strongly disagree with. If I'm going to commit to living here to me the only reason to do that is so you talk to people, not just liberals who we agree with, but people who strongly disagree with us.Bill:No. And I think that's right. And I think that also ties in for many years, predating Xi Jinping there's been this long stated goal for China to increase its global discourse power as they call it. And to spread more the tell the truth, tell the real story, spread more positive energy about China globally instead of having foreign and especially Western, or I think, and this ties into some of the national stuff increasing what we hear is called the Anglo-Saxons media dominate the global discourse about China. And to be fair, China has a point. I mean, there should be more Chinese voices talking about China globally.Bill:That's not an unreasonable desire, or request from a country as big and powerful as China is. One thing that seems like a problem is on the one hand you've got, the policy makers are pushing to improve and better control discourse about China globally. At the same time, they're increasing their control over the domestic discourse inside the PRC about the rest of the world. And so in some ways, yes, there's an imbalance globally, but there's also a massive imbalance domestically, which seems to fit into what you just went through with Sai Lei and where the trends are. I don't know. I mean, how does China tell a more convincing story to the world in a way that isn't just a constant struggle to use the term they actually use, but more of an actual fact based honest discussion, or is that something that we're just not going to see anytime soon?David:I think there's a couple of elements to that. I mean, you are absolutely right that China like any country has the right to want to draw the attention of the world to stuff that China does. That's impressive. And I do think, one of my arguments when I talk to Chinese officials as to why they should keep giving out visas to people like me is, when I think back to the beginning of the COVID pandemic, I've not left China for more than two years. I've not left since the pandemic began, you had a lot of media writing that this incredibly ferocious crackdown was going to be very unpopular with the Chinese public. And that's because of the very beginning you had people, there lots of stuff on Chinese social media, little videos of people being beaten up by some [inaudible 00:16:26] in a village or tied to a tree, or their doors being welded shot.David:And it did look unbelievably thuggish. And people playing Majiang being arrested. But actually about three weeks into the pandemic, and I was traveling outside Beijing and going to villages and then coming back and doing the quarantine, you'd go into these villages in the middle of Henan or Hunan. And you'd have the earth bomb at the entrance to the village and all the old guys in the red arm bands. And the pitchforks and the school desk, or the entrance to the village with a piece of paper, because you got to have paperwork as well. And you've realized that this incredibly strict grassroots control system that they'd put in motion, the grid management, the fact that the village loud speakers were back up and running and broadcasting propaganda was actually a source of comfort.David:That it gave people a sense that they could do something to keep this frightening disease at bay. And I think to me, that's an absolute example that it's in China's interest to have Western journalists in China because it was only being in China that made me realize that this strictness was actually welcomed by a lot of Chinese people. It made them feel safe and it made them feel that they were contributing to a national course by locking themselves indoors and obeying these sometimes very strange and arbitrary rules. In addition, I think you are absolutely right, China has the right to want the foreign media to report that stuff.David:Instead of looking at China through a Western lens and saying, this is draconian, this is ferocious, this is abuse of human rights. It's absolutely appropriate for China to say no, if you're doing your job properly, you will try and understand this place on China's own terms. You will allow Chinese voices into your reporting and let them tell the world that they're actually comforted by this extremely strict zero COVID policy, which is tremendously popular with the majority of the Chinese public. That is a completely legitimate ambition. And I never failed to take the chance to tell officials that's why they should give visas to have journalists in the country, because if you're not in the country, you can't think that stuff up.David:What I think is much more problematic is that there is alongside that legitimate desire to have China understood on China's own terms, there is a very conscious strategy underway, which is talked about by some of the academics at Fudan who work for Eric Li at Guancha as a discourse war, a narrative war, or to redefine certain key terms.Bill:And the term and the term is really is like struggle. I mean, they see it as a public opinion war globally. I mean, that the language is very martial in Chinese.David:Absolutely. Yeah. And do not say that we are not a democracy. If you say that we are not a democracy, you are ignoring our tremendous success in handling COVID. We are a whole society democracy, which it's basically a performance legitimacy argument, or a collective utilitarian, the maximizing the benefits for the largest number of argument. It's not particularly new, but the aggression with which it's being pushed is new and the extraordinary resources they put into going after Western media for the language that we use of our China. And I had a very interesting conversation with a CGTN commentator who attacked me online, on Twitter and said that I was a... It was sort of like you scratch an English when you'll find a drug dealer or a pirate.David:Now there's a lot of Opium War rhetoric around if you're a British journalist in China. You're never too far from Opium War reference. And for the record, I don't approve of the war, but it was also before my time. So I actually, the guy attacked me fairly aggressively on Twitter. So I said, can you try and be professional? I'm being professional here why won't you be professional. He invited me with coffee. So we had coffee. And we talked about his work for CGTN and for Chaguan and his view of his interactions to Western media. And he said, this very revealing thing. He said, the reason we do this stuff is because it works.David:He said, I can't tell you how many Western diplomats, or Western journalists they whine. And they moan. And they say, how aggressive China is now and how upset all this Wolf warrior stuff is and how China is doing itself damage. And he goes, we're not, it's working. You in the Western media, used to routinely say that the national people's Congress was a rubber stamp parliament. And because we went after you again and again, you see news organizations no longer as quick to use that. Because we went after you calling us a dictatorship, you're now slower to use that term because we went after you about human rights and how it has different meanings in different countries. We think it's having an effect.David:And so I think that this attempt to grind us down is working, although in their view, it's working. And I think that, that ties in with a broader conversation that I have a lot in Beijing with foreign ambassadors or foreign diplomats who they get called into the foreign ministry, treated politically aggressively and shouted at and humiliated. And they say, how does the Chinese side not see that this causes them problems? And I think that in this moment of, as you say, an era of struggle, this phrase that we see from speeches, from leaders, including Xi, about an era of change, not seen in 100 years.David:They really do feel that as the West, particularly America is in decline and as China is rising, that it's almost like there's a turbulence in the sky where these two the two axis are crossing. And that China has to just push through that turbulence. To use a story that I had kept secret for a long time, that I put in a column when Michael Kovrig was released. So, listeners will remember Michael Kovrig was one of the two Canadians who was held cover couple of years, basically as a hostage by the Chinese state security. And fairly early on, I had heard from some diplomats in Beijing from another Western embassy, not the UK, I should say, that the fact that Michael Kovrig in detention was being questioned, not just about his work for an NGO, the international crisis group that he was doing when he was picked up.David:But he was also being questioned about work he'd been doing for the Canadian embassy when he had diplomatic immunity. The fact that that was going on was frightening to Western diplomats in Beijing. And soon after that conversation, I was sitting there talking to this guy, reasonably senior official. And I said to him, I explained this conversation to him. And I said, I've just been having a conversation with these diplomats. And they said, the word that they used was frightened about what you are doing to Michael Kovrig. And I said, how does it help China to frighten people from that country?David:And he'd been pretty cheerful up till then. He switched to English so that he could be sure that I understood everything he wanted to say to me. And he said, this absolute glacial tone. He said, Canada needs to feel pain. So that the next time America asks an ally to help attack China, that ally will think twice. And that's it.Bill:That's it. And it probably works.David:It works. And yeah. So I think that, again, one of the things I think is a value of being here is you have these conversations where the fact that we in the West think that China is inevitably making a mistake by being much more aggressive. I don't think that's how a big part of the machine here sees it. I think they think it worked.Bill:No. I agree. And I'm not actually sure that they're making a mistake because if you look at so far, what have the cost been? As you said, I mean, behavior is shift, but I think it's definitely open for question. I mean, it's like the assumptions you still see this week, multiple columns about how China's COVID policy is inevitably going to fail. And I'm sitting here in DC, we're about to cross a million people dead in this country, and I'm thinking what's failure. It's a very interesting time.Bill:I mean, to that point about this attitude and the way that there seem to be prosecuting a very top down or top level design communication strategy, Zhang Weiwei, who's at Fudan University. And also I think Eric Li is a closer associate of his, he actually was the, discussant at a Politburo study session. One of the monthly study sessions a few months ago, where I think the theme was on improving international communication. And talking about, again, how to better tell China's story, how to increase the global discourse power.Bill:Some people saw that as, oh, they're going to be nicer because they want to have a more lovable China image. I’m very skeptical because I think that this more aggressive tone, the shorthand is “Wolf warriors. wolf-warriorism”, I think really that seems to me to be more of a fundamental tenant of Xi Jinping being thought on diplomacy, about how China communicates to the world. I mean, how do you see it and how does this get better, or does it not get better for a while?David:It's a really important question. So I think, what do they think they're up to? To simplify and exaggerate a bit, I think that China, and this is not just a guess, this is based on off the record conversations with some pretty senior Chinese figures, they believe that the Western world, but in particular, the United States is too ignorant and unimaginative and Western centric, and probably too racist to understand that China is going to succeed, that China is winning and that the West is in really decadent decline.David:And so I think that these aggressive acts like detaining the two Michaels or their diplomatic an economic coercion of countries like Australia or Lithuania. They hear all the Pearl clutching dismay from high officials in Brussels, or in Washington DC-Bill:And the op-eds in big papers about how awful this is and-David:And the op-eds and yeah, self-defeating, and all those things. But I think that what they believe they are doing is delivering an educational dose of pain and I'm quoting a Chinese official with the word pain. And it is to shock us because we are too mule headed and thick to understand that China is winning and we are losing. And so they're going to keep delivering educational doses of pain until we get it. I think they think that's what they're up to-Bill:And by getting it basically stepping a side in certain areas and letting the Chinese pursue some of their key goals, the core interests, whatever you want to call it, that we, yeah.David:That we accommodate. Yeah. The fundamental message I'm quoting a smart friend of mine in Beijing here is China's rise is inevitable. Resistance is futile.Bill:Right. Resistance is futile.David:And if you accommodate us, we'll make it worth your while. It's the key message. And they think that some people are proving dimer and slower and more reluctant to pick that message up and above all Americans and Anglo Saxons. And so they're giving us the touch, the whip. Now, do I think that, that is inevitably going to be great for them? And you ask how does this end well? I mean, I guess my reason for thinking that they may yet pay some price, not a total price, is that they are engaged in a giant experiment. The Chinese government and party are engaged in a giant experiment, that it didn't matter that much, that the Western world was permissive and open to engagement with China.David:That, That wasn't really integral to their economic rise for the last 40 years that China basically did it by itself. And that if the Western world becomes more suspicious and more hostile, that China will not pay a very substantial price because its market power and its own manufacturing, industrial strength, we'll push on through. And so there'll be a period of turbulence and then we'll realized that we have to accommodate. And I think that in many cases they will be right. There will be sectors where industries don't leave China. They in fact, double down and reinvest and we're seeing that right now, but I do worry that there are going to be real costs paid.David:I mean, when I think back to... I did a special report for The Economists in May, 2019 about us generations. And one of the parts of that was the extraordinary number of Chinese students in us colleges. And I went to the University of Iowa and I spoke to Chinese students and you know that now, the levels of nationalism and hostility on both sides and the fear in American campuses, that's a real cost. I mean, I think if you imagine China's relationship with the Western world, particularly the U.S. as a fork in the road with two forks, one total engagement, one total decoupling, then absolutely China is right. There's not going to be total decoupling because we are as dependent as we were on China's, it's just-Bill:Right. Not realistic.David:China is an enormous market and also the best place to get a lot of stuff made. But I wonder, and it's an image I've used in a column, I think. I think that the relationship is not a fork in the road with two forks. It's a tree with a million branches. And each of those branches is a decision. Does this Western university sign a partnership with that Chinese university? Does this Western company get bought by a Chinese company? Does the government approve of that? Does this Western media organization sign a partnership with a Chinese media organization?David:Does this Western country buy a 5g network or an airline or a data cloud service or autonomous vehicles from China that are products and services with very high value added where China wants to be a dominant player. And that's an entirely reasonable ambition, because China's a big high tech power now. But a lot of these very high value added services or these relationships between universities, or businesses, or governments in the absence of trust, they don't make a bunch of sense because if you don't trust the company, who's cloud is holding your data or the company who's made you the autonomous car, which is filled with microphones and sensors and knows where you were last night and what you said in your car last night, if you don't trust that company or the country that made that, none of that makes sense.David:And I think that China's willingness to show its teeth and to use economic coercion and to go to European governments and say, if you don't take a fine Chinese 5g network we're going to hurt you. If you boil that down to a bumper sticker, that's China saying to the world, or certainly to the Western world stay open to China, or China will hurt you. Trust China or China will hurt you. That's the core message for a lot of these Wolf warrior ambassadors. And that's the core message to people like me, a guy who writes a column living in Beijing. And a lot of the time China's market power will make that okay. But I think that's, if you look at that tree with a million decisions, maybe more of those than China was expecting will click from a yes to a no.David:If you're a Western university, do you now open that campus in Shanghai? Do you trust your local Chinese partner when they say that your academics are going to have freedom of speech? And what's heartbreaking about that is that the victims of that are not going to be the politic bureau it's going to be people on the ground, it's going to be researchers and students and consumers and-Bill:On both sides. I mean, that's-David:On both sides. Yeah.Bill:Yeah. That's the problem.David:Yeah.Bill:So that's uplifting. No, I mean, I-David:I've got worse.Bill:Wait until the next question. I think I really appreciate your time and it'd be respective but I just have two more questions. One is really about just being a foreign correspondent in China and the Foreign correspondents' Club of China put out its annual report, I think earlier this week. And it's depressing you read as it's been in years and every year is extremely depressing, but one of the backdrops is really the first foreign ministry press conference of the last year of 2021. It really struck me that Hua Chunying, who is... She's now I think assistant foreign minister, vice foreign minister at the time, she was the head of the information office in I think the one of the spokespeople, she made a statement about how it was kicking off the 100th anniversary year.Bill:And I'm just going to read her couple sentences to get a sense of the language. So she said, and this was on the, I think it was January 4th, 2021, "In the 1930s and 1940s when the Guangdong government sealed off Yunnan and spared, no efforts to demonize the CPC foreign journalists like Americans, Edgar Snow, Anna Louise Strong and Agnes Smedley, curious about who and what the CPC is, chose to blend in with the CPC members in Yunnan and wrote many objective reports as well as works like the famous Red star over China, giving the world, the first clip of the CPC and its endeavor in uniting and leading the Chinese people in pursuing national independence and liberation."Bill:And then went on with more stuff about how basically wanting foreign correspondents to be like Snow, Strong or Smedley. How did that go over? And I mean, is that just part of the, your welcome as long as you're telling the right story message?David:So there was a certain amount of... Yeah. I mean, we also got this from our handlers at the MFA, why couldn't it be more like Edgar Snow? And I fear the first time I had that line in the meeting, I was like, well, he was a communist, if that's the bar, then I'm probably going to meet that one. Edgar Snow went to Yan’an he spent a tremendous amount of time in Mao hours interviewing Mao. If Xi Jinping wants to let me interview him for hours, I'd be up for that. But I would point out that Edgar Snow, after interviewing Mao for hours, then handed the transcripts over to Mao and had them edited and then handed back to him. And that probably would not be-Bill:But doesn't work at The Economist.David:That wouldn't fly with my editors. No. So I think we may have an inseparable problem there. Look, isn't it the phrase that Trump people used to talk about working the refs? I mean, what government doesn't want to work the refs. So, that's part of it. And I'm a big boy, I've been at Trump rallies and had people scream at me and tell me, I'm fake news. And it was still a good thing to meet. I've interviewed Afghan warlords who had happily killed me, but at that precise moment, they wanted the Americans to drop a bomb on the mountain opposite.David:And so they were willing to have me in their encampment. So, the worker of being a journalist, you need to go and talk to people who don't necessarily agree with you or like you and that's the deal. So I'm not particularly upset by that. What is worrying and I think this is shown in the FCC annual server, which is based on asking journalists in China how their job goes at the moment is there is a sense that the Chinese machine and in particular things like the communist youth league have been very effective at whipping up low public opinion.David:So when we saw the floods in Hunan Province in the summer of 2021, where in fact, we recently just found out that central government punished a whole bunch of officials who had covered up the death doll there, journalists who went down there to report this perfectly legitimate, large news story, the communist youth league among other organizations put out notices on their social media feeds telling people they're a hostile foreign journalists trying to make China look bad, to not talk to them, if you see them, tell us where they are. And you've got these very angry crowds chasing journalists around Hunan in a fairly worry way.David:And again, if you're a foreign correspondent in another country, we are guests in China. So, the Chinese people, they don't have to love me. I hope that they will answer my questions, because I think I'm trying to report this place fairly, but I'm not demanding red carpet treatment, but there is a sense that the very powerful propaganda machine here is whipping up very deliberately something that goes beyond just be careful about talking to foreign journalists. And I think in particular, one thing that I should say is that as a middle aged English guy with gray hair, I still have an easier time of it by far because some of the nastiest attacks, including from  the nastiest online nationalist trolls.David:They're not just nationalists, but they're also sexist and chauvinist and the people who I think really deserve far more sympathy than some like me is Chinese American, or Chinese Australian, or Chinese Canadian journalists, particularly young women journalists.Bill:I know Emily Feng at NPR was just the subject of a really nasty spate of attacks online about some of her reporting.David:And it's not just Emily, there's a whole-Bill:Right. There's a whole bunch.David:There's a whole bunch of them. And they get called you know er guizi all sorts of [crosstalk 00:37:15]. And this idea and all this horrible stuff about being race traitors and again, one of the conversations I've had with Chinese officials is, if you keep this up, someone is going to get physically hurt. And I don't think that's what you want. David:And again, I fall back on the fact that I'm a Western liberal. What I say to them is if you tell me that a Chinese-British journalist is not as British as me, then you are to my mind, that's racial prejudice. And if some right wing Western white politician said to me that a Chinese immigrant wasn't fully American, or wasn't fully British, that's racism, right?Bill:That's racism. Yeah.David:And I think that is the really troubling element to this level of nationalism. China is a very big country that does some very impressive things that does some less impressive things and does some very wicked things, but we have every reason to give it credit for the things it does well. And it is not that surprising when any government tries to work the refs.David:And get the best coverage they can by intimidating us and calling us out. I've interviewed Donald Trump and he asked me, when are you going to write something nice about me? I mean, we're grownups, this is how it works, but if they are making it toxic for young women journalists to work in China, or if they are driving foreign correspondent out of China, because their families they're under such intimidation that they can't even go on holiday without their children being followed around by secret police. I think there will be a cost.Bill:But that may be a what the Chinese side sees as a benefit, because then it opens the field for them controlling how the story's told. And then you can bring in a bunch of people or pull a bunch of people out of the foreigners working for state media, hey, the new Edgar Snow, the new Agnes Smedley. I mean, that is one of the things that I think potentially is what they're trying to do, which seems self-defeating, but as we've been discussing, what we think is self-defeating the policy makers, or some of them may see as a success.David:So what I think they're confident of is that being aggressive and making us much more jumpy is a win, but throwing all of us out, I think the people at the top get that, that's not a win because the New York times and the BBC and the Washington post, they're still going to cover China, even if they can't have people in China. And a bunch of that coverage is not going to be stuff that China likes, North Korea doesn't have any resident foreign correspondent, but it doesn't get a great press.Bill:And the other group, of course, but beyond the foreign journalists is all the PRC national journalists working for the foreign correspondent as researchers and, I mean, many of them journalists in all but name because they can't legally be that I've certainly, been hearing some pretty distressing stories about how much pressure they're under. And I think they're in almost an impossible situation it seems like right now.David:Now they're amazingly brave people. They're completely integral to our coverage. And many of them, as you say, they're journalists who in any other country, we would be getting to write stuff with their own bylines. I mean, in incredibly cautious about what we have our Chinese colleagues do now, because they are under tremendous pressure. I mean, not naming news organizations, but the just the level of harassment of them and their families and is really bad. And it's the most cynical attempt to make it difficult for us to do our jobs and to divide Chinese people from the Western media.David:But fundamentally at some level, this does not end well because, and this is not me just talking up the role of the Western media, because I think we're magnificently important people, but at some level there's a big problem under way with this level of nationalism in modern China. I was in China in the '90s, you were in China in the '90s, I think. We remember it was-Bill:'80s, '90s, 2000s. Yeah.David:Yeah. You were there before me, but it was not a Jeffersonian democracy. It was a dictatorship, but this level of nationalism is much more serious now. Why does that matter? Well, because I think that for a lot of particularly young Chinese, the gap between their self perception and the outside world's perception of China has become unbearably wide. They think this country has never been so impressive and admirable. And yet I keep seeing foreign media questioning us and criticizing us. And that just enrages them. They can't conceive of any sincere principle on our part that would make us criticize China that way.David:And going back to my conversation with the online nationalist Sai Lei, when he was saying, well, how would the Americans take it if they were told that eating avocados was bad for the environment? When I said to him, but they are told that. There are lots of environmental NGOs that talk about sustainable fisheries, or the cost, the carbon footprint of crops and things in the West. The two countries are pulling apart and the pandemic has just accelerated that process. And so if you are a Chinese nationalist, not only are you angry about being criticized, but you don't believe that the West is ever critical about itself. You think that the West is only bent on criticizing China. And that gap in perceptions is just really dangerously wide.Bill:And widening, it seems like. I mean, I'm not there now, but it certainly, from everything I can see outside of China, it feels like that's what's happening too.David:Yeah. We need to know more about China.Bill:I agree.David:And report more about China. And I don't just say that because that's how I earn my living. I think it's really, really dangerous for us to think that the solution is less reporting about China.Bill:Well, and certainly, I mean, and all sorts of avenues, not just media, but all sorts of avenues, we're seeing a constriction of information getting out of China. And on the one hand China's growing in importance globally and power globally. And on the other hand, our ability to understand the place seems to be getting harder. And it goes back to, I mean, we just, I think it'll be a mistake if we just get forced into accepting the official version of what China is. That's disseminated through the officially allowed and sanctioned outlets in China. Maybe that'll help China, but I'm not sure it helps the rest of the world.David:And it's not compatible with China's ambitions to be a high tech superpower. China wants to be a country that doesn't just-Bill:That's a very fundamental contradiction.David:Yeah. China wants to sell us vaccines and wants the Western world to buy Chinese vaccines and approve Chinese vaccines. Why has the FDA not yet approved Chinese vaccines? Well, one reason is because China hasn't released the data. You can't play this secretive defensive hermit state and be a global high tech superpower. And China is a very, very big country with a lot of good universities, a lot of smart people. It has every right to compete at the highest levels in global high tech. But you can't do that, if you are not willing to earn trust by sharing the data, or by letting your companies be audited, when they list overseas. They need to decide.Bill:Or being able to handle legitimate criticism. I mean, certainly there has been illegitimate criticism and the attacks on the Western media, I mean, I know the BBC was a frequent target last year. And I think they were able to pull out some errors of the reporting and then magnify it. I mean, it is a struggle. And I think one of the things I think is on the Chinese side, they're very much geared up for this ongoing global opinion struggle. And we're not and we're never going to be, because it's just not how our systems are structured. So it's going to be an interesting few years.David:It is. And it's a tremendous privilege to still be here. And as long as I'm allowed, I'm going to keep letting Chinese people, letting their voices be heard in my column. That's what I think I'm here for.Bill:Okay. Last question. Just given your experience in living in DC and writing for The Economist from here, where do you see us, China relations going? And there is a one direct connection to what we just talked about, the foreign journalists where there theoretically has been some sort of an improvement or a deal around allowing more journalists from each side to go to other country. Although what I've heard is that the Chinese side was been very clear that some of the folks who were forced to leave or were experienced are not going to be welcome back. It's going to have to be a whole new crop of people who go in for these places, which again, seems to be, we don't want people who have priors or longer time on the ground, potentially.David:We think that each of the big American news organizations just going to get at least one visa, initially. And that Is going to be this deal done and it's high time. And you're right, as far as we can tell the people who were expelled or forced to leave are not going to come back. And that's a real tragedy because I have Chinese officials say to me, we wish that the Western media sent people who speak good Chinese and who understand China. And I was like Ian Johnson and Chris Buckley, these people lived for, their depth of knowledge and their love for China was absolutely unrivaled. So, if you're going to throw those people out, you can't complain about journalists who don't like China.Bill:Exactly.David:The general trend of U.S. China relations. to be of optimistic about the trend of U.S. China relations I'd have to be more optimistic than I currently am about the state of U.S. Politics. And there's a kind of general observation, which is that I think that American democracy is in very bad shape right now. And I wish that some of the China hawks in Congress, particularly on the Republican side, who are also willing to imply, for example, that the 2020 election was stolen, that there was massive fraud every time they say that stuff, they're making an in-kind contribution to the budget of the Chinese propaganda department.Bill:I agree completely there. It's not a joke because it's too serious, but it's just ludicrous, hypocrisy and shortsightedness. It's disgusting.David:You cannot be a patriotic American political leader and tell lies about the state of American democracy. And then say that you are concerned about China's rise. So there's a general observation about, if dysfunction continues at this level, then-Bill:No wonder the Chinese are so confident.David:Yeah. I mean, the Chinese line on president Biden is interesting. One of the big things about my first couple of years here when president Trump was still in office was, I'd any number of people in the states saying confidently that Donald Trump was a tremendous China hawk. I never believed. And I've interviewed Trump a few times and spoken to him about China and spoken to his China people. I never believed that Donald Trump himself was a China hawk. If you define a China hawk, as someone who has principled objections to the way that China runs itself. I think that Donald Trump couldn't care less about the Uighurs and Xinjiang. In fact, we know he approved to what they were doing.David:Couldn't care less about Hong Kong couldn't care less frankly, about Taiwan. His objection to the China relationship was that I think he thinks the American economy is the big piece of real estate, and you should pay rent to access it. And he thought China wasn't paying enough rent. So he was having a rent review. I mean, that's what the guy. It was about, they needed to pay more and then he was going to be happy. So he was not a China hawk. What was really interesting was that here in China, officials would be pretty open by the end, took them time to get their heads around Trump. For a long time they thought he was New York business guy. Then they realized that was, he wasn't actually like the other New York business guy they knew.David:And then they thought he was like a super China hawk. And then they realized that that wasn't true. By the end, they had a nail. They thought he was a very transactional guy. And the deal that they could do with him was one that they were happy to do, because it didn't really involve structural change on the Chinese side. Then their message about Joe Biden is that he is weak and old and lacks control of Congress. And that he is, this is from scholars rather than officials, I should say, but their view is, why would China spend political capital on the guy who's going to lose the next election?Bill:And not only the next election but is probably going to lose control of the House, at least in nine, what is it? Nine months or 10 months. So why worry? And that they do and I think, I mean, one of the big milestones will be the national security strategy, the national defense strategy, which in the Trump administration they came out in the December of the first year and then January for the NDS. It's February, we still haven't seen those here. I think certainly as you said, but certainly from Chinese interlock is the sense of, is that they can't come to an agreement on what it should be, the U.S. China policy.David:Yeah. And China has some legitimate concerns. I mean, for example, if you are Xi Jinping and you're trying to work out how ambitious your climate change timetables going to be. How much pain are you going to ask co-producing provinces in the Northeast to take to get out to carbon neutrality as quickly as say, the Europeans are pushing you to do. And part of the equation is America going to take some pain too, or are we going to end up being uncompetitive? Because America's not actually going to do the right thing? Well, Joe Biden can talk a good game on climate as an area for cooperation with China. But if he loses the next election and Donald Trump or someone like Donald Trump wins the White House then if you're shooting pink, why would you kind of strike a painful deal with America if you don't think it's going to last beyond 2024?Bill:Right. You'll do what makes sense for your country and not offer anything up to America because we already have a record of backing out of these deals. That's the problem.David:So that has real world consequences. The one thing that I will say about the U.S. China relationship, and I'm very, very pessimistic about the fact that the two sides, they don't share a vision of how this ends well. There is no end game that I think makes both sides happy, because I think the Chinese vision is America sucks it up and accommodates.Bill:Right. Resistance is futile.David:Yeah, exactly. And the American vision, I think, is that China stumbles, that China is making mistakes, that the state is getting involved in the economy too much. That Xi Jinping is centralizing power too much. And that somehow China's going to make so many mistakes that it ends up to feed defeating itself. I think that's one of the arguments you here in DC.Bill:Yes. It's wishful thinking it's not necessarily based on a rigid rigorous analysis. It seems like it's much more wishful thinking.David:So, that is a reason to be pessimistic about the medium and the long-term. The one thing that I will say based here in China is that when I write really specific color about things like what does China think of the idea of Russia invading Ukraine? And I talk to really serious scholars who spent their lives studying things like Russia policy or foreign policy or international relations, or if I talk to really senior tech people, Chinese tech companies, they do take America's power very seriously. Even though there is absolutely sincere disdain for American political dysfunction.David:I think that America's innovation power, the areas of technology, whether it's semiconductors or some forms of AI algorithms where America just really is still ahead by a long way, the really serious people, when you talk to them off the record, they still take America seriously. And on that Ukraine example, what was really interesting, the prompt for that was seeing commentators in the U.S. saying that Xi Jinping would like Putin to invade Ukraine because this was going to be a test that Biden was going to fail and America was going to look weak. And maybe that would lead Xi Jinping to then invade Taiwan.David:And when I spoke to Chinese scholars, really serious Chinese scholars of Russia, their Irish, it's like, no, no, no. Russia is an economy, the size of Guangdong and they sell us oil and gas, which is nice. But our trade to them is not enough to sacrifice our relationship with America.Bill:Thank you, David Rennie. That was a really good conversation. I think very useful, very illuminating. The links, some of the articles we talked about, the links will be in the show notes. And just a note on the schedule for the sinocism podcast. It is not, I think going to be weekly or biweekly as I thought originally, I'm still working it out, but it will be every, at least once a month. I hope it's the plan, if not, a little more frequent depending on the guests.Bill:So thanks for your patience and look forward to hearing from you. I love your feedback. The transcript will be on the website when it goes live. So please let me know what you think. And as always, you can sign up for sinocism at sinocism.com, S-I-N-O-C-I-S-M.com. Thank you. Get full access to Sinocism at sinocism.com/subscribe

BG Ideas
Music and Community: Creating Connections During COVID-19

BG Ideas

Play Episode Listen Later Nov 3, 2021 27:46


In this episode, Jolie speaks with David Bixler, a composer, musician, and Director of Jazz Studies, about demystifying the process of music creation, composing through the pandemic, and the many hats he wears in the jazz scene.  Announcer:From Bowling Green State University and the Institute for the Study of Culture and Society. This is BG ideas.Musical Intro:I'm going to show you this with a wonderful experiment. Jolie:Hello and welcome back to the BiG Ideas podcast brought to you by the Institute for the Study of Culture and Society and the School of Media and Communication at Bowling Green State University. I'm Dr. Jolie Sheffer, Associate Professor of English and American Culture Studies and Director of ICS. Due to the ongoing pandemic, we are not recording in the studio but from home via phone and computer. As always, the opinions expressed on this podcast are those of the individuals involved and do not necessarily represent those of BGSU or its employees. Bowling Green State University, and its campuses are situated in the Great Black Swamp in the Lower Great Lakes Region. This land is the Homeland of the Wyandotte, Kickapoo, Miami, Pottawatomie, Ottawa, and multiple other Indigenous Tribal Nations, present and past, who were forcibly removed to and from the area. We recognize these historical and contemporary ties in our efforts towards de-colonizing history and we honor the indigenous individuals and communities who've been living and working on this land from time immemorial. Jolie:Today, I'm talking to composer, alto saxophonist and Director of Jazz Studies at BGSU David Bixler. In 2020, he released the album Blended Lineage with the David Bixler Bixtet and Inside The Grief with the David Bixler Trio Incognito. He is also the host of the podcast Liner Notes with David Bixler. In addition, David is a former ICS Faculty Fellow. David, thank you for joining us today to talk about making art during the pandemic. David, would you begin by talking a bit about your many different roles within the world of jazz? You're a performer, composer, educator and now a podcaster as well. How do you think about the relationship between these different positions?David:They definitely inform each other. And I think more and more, this is just kind of where we are right now, and everyone is doing it. And I think in the arts, being an educator, I believe, is part of it. There's always kind of a mentorship or giving back. And I think sometimes what that looks like is different. Going back to the history of jazz, it wasn't in an institutional setting. The way that the jazz scene has changed, academia for better or for worse has been a place where the community gathers, where some of this information is passed on. Because I think at one point like, "Why is jazz in the institution?" I think because as music becomes less popular in society, being able to gather at BGSU in the Northwest Ohio, we have a community there, we bring in people. And in this way is still incubated and passed on.David:With the podcast, this actually came about maybe five, no six, maybe seven years ago. I have a high school friend whose cousin used to work for PRI. They were looking for content. And so I met with him. And this is never anything I ever thought about. And I thought, "Well, I'll check it out." I have a friend, a former neighbor, that was a producer at 60 Minutes in 2020. So I reached out to her and asked her if she could help out, she's retired now. And she said, oh, she'd love to. And so I showed up at the place where we were going to interview the first person and she had hired a film crew and I walked in there and I said, "Man, there's no way I can do this." I just froze. I didn't know what to do. But anyhow, she put it together and made me look halfway articulate.David:It was cool. And then, since she had come from television, she was looking for a lot of money to try to get this going. We didn't get it. And then four years ago, I just tho

Sub Club
026: Eric Crowley, GP Bullhound - Optimizing Your Subscription App for Growth

Sub Club

Play Episode Listen Later Oct 27, 2021 54:12


Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails, Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in the Consumer Subscription Software space.On the podcast we talk with Eric about his 2021 report on Consumer Subscription Software, the truth about LTV calculations, and the new era of organic user acquisition.In this episode, you'll learn: Was 2020 just a “COVID Bump,” or a shift in consumer behavior? Are the Bumble & Duolingo IPO multiples justified? How savvy developers are adapting to Apple's App Tracking Transparency The truth about LTV The new era of customer acquisition Links & Resources Spotify Whoop AllTrails Pinkbike Lingoda Bumble Duolingo Instacart Match Group Netflix Noom Weight Watchers Tinder The Dyrt Day One Journal Automattic Tech Crunch Scribd Pandora Eric Crowley's Links Follow Eric on Twitter GP Bullhound GP Bullhound insights Eric's LinkedIn GP Bullhound 2021 CSS survey Follow us on Twitter: David Barnard Jacob Eiting RevenueCat Sub Club Episode Transcript00:00:00 David:Hello, I'm your host. David Bernard. And with me, as always, RevenueCat CEO, Jacob Eiting. Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in consumer subscription software.On the podcast, we talk with Eric about his 2021 report on consumer subscription software, the truth about LTV calculations, and the new era of organic user acquisition.Hey, Eric, welcome to the podcast.00:00:56 Eric:Hey, David, Jacob. Thanks for having me back. It's always a pleasure. 00:00:59 David:Yeah. Every year you release this report, so we had to get you back. This is the third annual Consumer Subscription Software Report, and I wanted to kick off just asking you a little bit about the motivation, and where your headspace is in thinking about creating this. Who the target is, and what kind of questions you're asking yourself as you prepare this report.00:01:24 Eric:Yeah. The report is the GP Bullhound Consumer Subscription Software Report. I call it CSS, which is kind of a playoff SaaS. This is the third year I've been writing it, and it started back in 2018. I worked with a company called AllTrails that was starting to monetize really well by selling subscriptions.It was like a light bulb went off in my head. I was like, this is a phenomenal way to provide a consistently improving product to consumers, where the margins are pretty good. It's easy to access a ton of different people globally through the app stores or through the web, and I just got really excited about it.I started putting some notes down on my own, and then GP Bullhound really supported me in saying like, “Hey, this is actually a pretty big trend. There's gonna be some amazing companies built around this space,” and companies like RevenueCat, that are supporting CSS companies, are just as exciting.So, we've been slowly educating ourselves. The goal behind the report is really just to force me to do some thinking about the space. What it looks like. What it will be. As a banker, you can quickly focus on transaction, transaction, transaction, and not really do any long-term thinking about where the world's going.It's putting myself in your guys's shoes. You guys are building RevenueCat not for what the world looks like today, but for what the world looks like in three to five years. I try to take the same approach with CSS, and think about where's the world going to go. So I talked to a lot of smart people as I put the report together. Entrepreneurs, investors, get their opinions.You guys can see their interviews in the report, and then ultimately we publish it. The audience I like to think about is entrepreneurs, people that are thinking about starting a CSS company, or already launched one, and they're looking to improve their metrics, or think about their target audience as entrepreneur-rich.By partnering with them, investing in their businesses, it takes them to the next level. The other way I like to think about it, it's my own personal scoreboard. I love to flip back two years ago and see, was I right about this company? You're publishing in public, so people can always come back to you and say, “Man, you were way off.” So, I look forward to that.00:03:26 Jacob:I remember the F finding the first one, the 2018, I guess, reporter 2019, whenever the first one you put out,00:03:33 Eric:2019, I think that's how we met actually.00:03:36 Jacob:Did you reach out to me or? I think I found it, or I don't remember what it was, but00:03:39 Eric:We've had a mutual friend, Nico introduced us and said, Hey, you guys should talk about this. and then I think we just went off on a two hour tangent.00:03:47 Jacob:But yeah, I remember being, it's still, there's still not a ton of like really focused research or writing on this space. and I think that, that, you know, this will probably won't be true for very long, right. As long as it continues to grow, but like going back to like who it's for. I mean, I imagine it as some, you know, end of the day, if you're employing.Pushing into some kind of lead gen. Right. But it does provide a lot of value for, you know, even if you're not interested in a transaction or whatever, just. Some like holistic data on a space. Cause like, I, the same, I mean, Eric, you said we're, we're thinking three and five years in the future. It's like, I wish like a lot of times I'm thinking like three to six weeks in the future.Right. and so it's even useful, I think, you know, even if you're, you know, I, you know, we're, we're in a bit of an interesting place as a infrastructure provider to be at kind of a bird's eye view, but it. Founder on one of these CSS apps, you know, like it is useful for you to know, like what's the meta environment, how's it evolving, you know?And if nothing else to like connect you with other people who have experimented with things and stuff like that. So, yeah, I think it provides beyond, beyond the, the, the lead gen aspect of it. It provides a lot of value for people. So I'm glad, I'm glad you're, you're still doing it. 00:05:04 Eric:Yeah. And just for any of the listeners, it is free. So you just go to the GP, bullhorn.com website. It's all easy to download and then you can see all our past reports as well. So 00:05:12 David:Yeah, and we'll drop it in the show notes. but, yeah. And, and, and speaking of all that, you know, it, it's something we as RevenueCat want to get more into as well. I mean, just seeing how much value you've created in producing these reports, and we're kind of sitting on a, you know, Processing over a billion dollars a year in, subscription revenue.We've got a lot of interesting data that, that we, that I'm very personally excited to share that we haven't, kind of had the infrastructure to, to do yet, but are, are getting there. And, so hopefully we'll, we'll have our own kind of, state of subscriptions that dives into the data and some of the trends and stuff in a different way than, than your kind of, strategy and higher level look at things.But when one thing that has happened, in the actually. It was announced before your last report, but actually implemented since your last report. And that's the app tracking transparency and iOS 14, which didn't actually ship till iOS. What was it? 14.4 or five or something. So, so we're kind of just now starting to see the impacts of it.And, and, you know, you took a couple of slides in your report to start discussing it. And it really is kind of one of the biggest topics and top of mind for subscription app developers, because it really is a huge shift in the landscape. So I want it to. Start with talking about that. And one of the things you shared in the, in the presentation is that you feel like it's a short-term pain, that's ultimately going to lead to a long-term gain.So I'd love to hear your thinking around what that pain is, but then also what you see the long-term game being.00:07:01 Eric:Yeah, it's a, it's a, great point. And, you know, anytime apple or Google make changes to their, their, their app stores, right. It's a seismic shift throughout the industry because it's something that impacts everyone. And so everyone has to be aware of these changes and then ultimately have a plan for them.And so I think that the change you're talking about David is really the. The implementation of, removing tracking for a lot of, a lot of these businesses specifically, like. And so what the change did with IDFA, is it, it really deprecated the ability for, for marketers within some of these CSS businesses to really accurately target people, specifically using Facebook or some of these other social networks.And so what it's doing is it. It's impacting the conversion rates on, CSS, CSS, businesses, marketing to consumers. And so if you just can't find that person that just is in love with, for example, biking, if you're a Strava marketer, it just takes you a lot longer to find that specific subscribers you might have to market to 10 people now to find two subscribers versus before you can market to five people and find two subscribers.And so it just means marketing efficiencies going down. And that can mean. Growth rates. It can impact conversion rates and ultimately impact just financials of these businesses. And so it's a pretty important consideration for any, CEO marketing team on how they go out and get their, their business in front of consumers.If Facebook's no longer as efficient, they have to find other ways. And so. So my, my thought is like, this is a short-term problem, right? It's something that's going to take people two to three months to adapt and find a new way to reach consumers. But ultimately my hope is for the space is you see the long-term game, which is what I was referencing.People really focus on organic ways of acquiring customers. Right? So instead of just pumping ads through Facebook and trying to find someone who fits a profile, you spend a lot more time really narrowly targeting your demographic, your niche, and then finding ways for them to find your product organically either.You know? So like a company that I work with, we sold a company called Pinkbike and so what they do is they partner with, the trade associations for mountain. And those trails associations now act almost as the marketing partner of pink bike to let consumers know about the fact that all the trail details.Is on, is on the pink bike app or it's called trail forks. And so that's, that's a really powerful, organic customer acquisition tool that they don't have to pay for. And so you're seeing, seeing the same thing happen with, like Strava is doing this, pre.com recently partnered with the NFL. So if your team's got a last fourth quarter fuel goal and you need to get something kicked, you can go to pray.com and submit a prayer for your kicker. I wish I was joking. It's a pretty brilliant idea. So I think this is really good for the sector overall, but yeah. Happy to dive into it. It's it's a fascinating00:09:37 Jacob:We it's a callback to a sub club podcast content, but, Greg, this, the plant app, this is something that they were doing, which is like, we're partnering with, plant nurseries. Yeah. To like, get their app into people's hands. And, yeah, I don't know if it's an earned media or. Bought media, but this is more like this is earned, right?This is like building an audience. You've seen it in the maker community, actually a lot, like in the indie SaaS community, more it's a different game when it has to be consumer scale. Right? Like there's a little bit different. You have to build maybe a bit more than you would in like, oh, just blog about.Built this thing and that's enough to get Indies, but you can apply the same thing, right? It's like produce content, produce something like low investment for users to get engaged with your brand because you're not building an app unless you have some, I mean, maybe you are, but you're not going to build something with very high, like multiples.Like if you're, if you don't have something unique to offer in the first place, but put that into like a more like lightly consumable format, start to build that audience and then make that an on-ramp and yeah, I agree. Like that's, that's something you own, right? Like your brand is. your brand doesn't exist on the app store, right?Like your brand can exist outside of these, like shifting sands and regulations and whatnot, and ultimately is like, you know, going to get reflected in your asset value if that's something you care about. Right. So, 00:10:53 Eric:Yeah, that's a key thing we talk about, right. If any business that we look at that's potentially selling or, or thinking about raising capital, right? It's like, how are you finding your. And if you're, if you're one channel is Facebook, and then consequently, like doing Facebook ads or apple ads on the, on the app store, that becomes pretty challenging.And so you want it to be such a good product, right? So it involves more work upfront. And just as you're talking about Jacob, the product's gotta be better. It's gotta be more efficient. It's got to reach consumers where they are with the problem they have. it becomes a lot more viral and a lot more sticky.So I think, I think it's going to be good for the sector.00:11:26 David:You wouldn't want to name names of course, but I am curious if. Had any clients, or just talks about anybody in the space where they were very reliant on Facebook specifically, and then, and have really struggled as things have changed. You know, I've been seeing some tweets around the, the consumer packaged goods space where some of these CPG companies are really struggling.And so I'm just curious. You know, without naming names, if, if there's any kind of high level things you could share around, apps that have struggled in this new paradigm. 00:12:02 Eric:Yeah. I mean, I definitely can't name names, you know, obviously I keep everything confidential with my clients, but even non-clients, you've seen CACs go up 20, 30%. you see, like, if you think about like conversion rates from installs to subs, That's a big metric of actual intent. Did you find the right user, right?Did someone just click on it and download it? Great. But if they're not actually subscribing that wasn't a successful transaction for you. And so the way I think about this, David is it's the app stores made tracking a lot harder, so it's harder to find your right consumer. So imagine if you're a CPG company, you walk into a grocery.And instead of stuff, being laid out perfectly across the shelves at the right height for you, they just tossed everything in the middle of the store and said, find what you want. Just go pick it out. Right. You're going to have much lower conversion. You're going to have much lower purchase rates because people aren't being targeted with the stuff they want to see.And so I think now you have to find, you know, it becomes more of a specialty situation where you're walking into a store that has stuff for just outdoor gear or very healthy granola. Right. And you're going specifically to that store for that. That's probably better in the long term, for a lot of these companies, 00:13:01 Jacob:Yeah, but there's, there's a lot of, there's a lot of folks that have benefited from this ease relative ease, right. And any sort of market disruption is going to be painful. I was like, anecdotally, I mean, David, we've heard on this podcast and elsewhere people who have just like straight up pause acquisition, who are like all re scrambling because yeah.You get it tuned to this very fine knife edge. And I imagine for like consumer physical goods, like DDC stuff, it's even worse because their margins are thinner than software. Right. 00:13:28 Eric:And you've got inventory and everything. Yeah. It's a totally different. 00:13:31 Jacob:But, you know, as you do like you, the market reshuffles and the people, I can figure it out, the fastest are gonna are going to come out the best.So. 00:13:39 Eric:There's going to be a shift though. So people under this is like that seismic shift that just shows how much of your reliance is on maybe one or two channels. Right? Two, two major tech companies sitting here in San Francisco. If you're super, truly relying on those and you're doing great, fine.But if a bump happens, right, how exposed are you? And so like, this will be a benefit. Right. I think it's going to be a huge benefit for Tik TOK. Right? I think people are finding really good ways to acquire customers through tic-tac. And so that's a very interesting channel. I think it'd be really good for influencers, right?If you have people that are very passionate about a certain space and then they go out and, you know, have a very core customer base that loves what they do specifically. It's going to be pretty powerful for them to.00:14:18 David:Yeah, and I was just gonna say, anecdotally, you know, we haven't done a super deep dive in our data, but at a, at a high level, I was. Bracing for our numbers to take a big dip. Like I, I mean, Jacob and I had talked about it in the spring about, you know, how, what is going to look like for RevenueCat, you know, are some of these subscription apps just going to completely unwind and people are apparently figuring it out because you know, it keeps going up until the right. 00:14:49 Jacob:I mean the consumer, the consumer need hasn't disappeared. Right. So maybe if they just weren't driven, you know, it's not going to, it can't just disappear overnight. Right? Like if you never, if you, if you are a Coke fan who never saw Coke out again, and it's like, you're still gonna buy it. Right. Like there's, there's, there's a certain amount of demand.That's just going to find the supply. But, but yeah, no, I mean, it's hard for us to, to definitively say looking at our data and aggregators. Cause there's so much, but they're definitely. Like this summer was definitely slower than we've had in the past. Like on my, as I'm writing my investor updates of the year and each month and stuff looking at it.But yeah, it wasn't like this catastrophic, you know, macro thing. And they were talking about a lot of like, you know, probably outliers that we hear about people who were affected, you know, more than others, but overall. I, I don't think our, I don't think our prediction last year of, of a potential recession was necessarily false.Like it doesn't, it definitely doesn't feel like it's sped up the ecosystem. Right. But it doesn't necessarily feel like a depression, right. Maybe, maybe a slight recession or just the normalization. 00:15:49 David:Looking at our data in aggregate that, some folks use this to their advantage and actually, and, and accelerated because they knew it was coming and they did focus more on product and organic and other things. And so for whatever, you know, losses, there were. Other folks more than made up for that.And that's it kind of the interesting thing about working with so many, I mean, we're closing in on 10,000 apps on revenue cat. And so, you know, you kind of have a pretty broad basket where you, you know, there are going to be winners and losers, but in aggregate subscription apps are just continuing to tick along and do really well. 00:16:26 Eric:David it's like you read directly from bullets on my report. I, I, I completely agree with you.00:16:34 David:Another thing I wanted to dive into was the, the COVID bump. Cause that's, that's another thing that's kind of been on everybody's mind is simultaneous to this. I was 14 and, and this is something we've talked about again internally, with revenue cat, is it. This summer was the, everybody who was vaccinated and, and Delta hadn't kind of bumped yet.And so, you know, may, June and July, there was a big shift socially. kind of it felt like it, especially in the U S that we were coming out of the pandemic. and, and so simultaneous to the app, tracking transparency, going into effect, we had these like societal shift. And then now we're kind of back into it a little bit with the Delta surge, but just curious what your thoughts are on how much of the boosts we saw in 2020 really was dependent DEMEC and then how much of that will actually linger as kind of shifting consumer preferences and shifting consumer spend.00:17:36 Eric:Yeah. I mean, there's, there's absolutely a companies that benefited from us is called the removal of inf in in-person conversations. Right? So like Bumble and DuoLingo, two companies that both went public, right. They both benefited because their, their business model is designed around, not meeting in person for the first couple of conversations.Right. And so. There's no way to say that they didn't benefit. the way I think about it, though, in this, in the CSS space, it's very similar to like the overall e-commerce space, right? Is consumers looked around to find a solution for a problem they're having right. Instacart you couldn't, you couldn't go to the grocery store or maybe you felt less comfortable going to the grocery store.So you tried an Instacart for the first time. Maybe you were, you know, thinking about meeting someone, you know, long-term but you never, you never wanted to try online dating or you couldn't go to the bar. So you tried online dating for the first time and sorry. What the pandemic did was it really opened up people's eyes to other options from what they'd been doing for the last 20 years, 50 years, whatever it was.And so they had to find other solutions to, you know, their demands, their needs. And so I don't, I think it's absolutely a COVID bump, but I still look at it as really as an accelerant of people adopting new products and services that they would have tried in three to four years. but the pandemic kind of pushed them to try something, to move out of their comfort zone and try something new.So, you know, I absolutely think you'll see a little bit of a downshift in, in some of these companies that had a really big boom, right? Like language learning. People had nothing to do for four to five months, especially over some of the winter times. So people tried new hobby, tried language learning, you know, that'll probably go down a little bit, but overall, if you look at it from like a five-year trend, It's going to be up substantially from where it was in 20 17, 20 18, 20 19, and 2020, you know, made it look like a little bit of bump, but eventually I think those companies will continue to grow and surpass what anything they did in 2020. 00:19:21 David:Yeah, that's really interesting.00:19:22 Jacob:I'll back that up as well with the, the unreleased, Jacob looks at graphs and then gives a, gives a hand wavy descriptions of them. But we, yeah, we, we were, I was kind of bracing for it as well. And then I would say this summer was slow and like, David was. We're not sure why. I think it was, I think it was a number of factors things have since picked up again.But I think generally summers are slow for software a and then B. Yeah, I think we were seeing kind of like a little bit of the payback for, for COVID perhaps it's a, it's a vial. I think it's a plausible theory. We don't, it's really hard to prove. but we have not seen, you know, we, we saw our COVID experience was really drastic.And we have not seen. Similar, like back off from that, like, it has been like, it has been like we just compressed six months and I'm saying partially, this is just revenue casts, individual story because of where we were last year. But then I think also it's, it's indicative of the system in general.It's like, I think, yeah, we just compressed a whole bunch of, like consumer behavior change into like a very short period of time. And yeah, we're not gonna be able to keep that up. Right. We're not gonna be able to continue. To, to crunch that in, or we'll run out of consumers eventually. But, but it doesn't look like everybody's, you know, because, you know, I think the story for CSS in general, it's like we've delivered value for people, right?Like it's, it's a good, it's a good product, right? The whole line, not every product is good, but in general it's like a it's, it's a decent deal. And so I, I think more people discovering that. Yeah, it can only get bigger, right.00:20:55 Eric:Yeah, I think we talked about it in our first year, our first time together, right on the last podcast, which is if these businesses are truly making consumers' lives better, this is going to be a very long-term.00:21:04 Jacob:Yeah. 00:21:05 David:And speaking of that, and the two companies you just mentioned, in the, Time since we last spoke, but Bumble and DuoLingo went public and some other consumer subscription, apps went public. so tell me a little bit about your, your perspective on the, the public investor. Excitement for CSS.I mean, we're seeing pretty high multiples in the both of those IPS did, did very well. so what are you seeing in the, in the public investor space?00:21:33 Eric:Yeah, I think, I think the public market has really woken up to this business model, the power of it and understanding, you know, it's public markets. They do a lot of pattern matching, right? If they've seen something be super successful, they look for something that looks similar to that. And so I think a lot of people are waking up to, how powerful Salesforce is not waking up.They're well awake, very aware of SAS businesses. But I think they're seeing that same pattern starts to take, hold on, CSS. It just has different metrics. Right? And so, you know, Bumble's now public, the match group's been public for quite some time. Once I spun out of IAC, you've got Netflix and Spotify, which are fantastic examples of the international global reach of Content, and how consumers are very sticky for something they love.And so. These businesses who can get to scale really quickly, like you nuMe, right, is a competitor to weight Watchers. Weight Watchers has been around for decades, but Newman built a better mouse trap and they acquired customers at a really quick rate. And, you know, they're well over 400 million in revenue and ready for the public market.So I expect them to go public. Pretty soon. And so I think there's going to be a lot of businesses that follow them that are using this, this metric. So, and then that'll cascade all the way through, from public market investors as, as exit opportunities all the way down to, you know, series a series B investors, seeing this business model work and scale.00:22:47 Jacob:Yeah. I mean, I guess my, like, what's your, like, I, I, when, when we started seeing these go public in the last, like couple of years, so, well, I mean, honestly, it's like, Since we started RevenueCat, like was actually the, kind of the first unicorns, even like, I guess Bumble might've been passing unicorn when we got started, but like there weren't a ton and now it's like every, every month there's a funding announcement for a CSS company.That's a, that's a university. I mean, partially that's just like valuations going up and stuff like this, but like, how do you see. The evolution of this market. Long-term, you know, so DuoLingo pops becomes the first, you know, are they going to be like Salesforce and just be dominant in that space forever?Or do you see it being maybe more dynamic than sasses?00:23:31 Eric:I think it's a little more dynamic than SAS for, for a couple of reasons. One, new consumers like to try stuff, right. And so if it's with like a Salesforce or something, right. That integrates into your day to day operations from a business model perspective, right. So if something breaks there, right.Your business. 00:23:47 Jacob:Is very high. 00:23:48 Eric:Yeah, it's a little higher, right. And it's not just you using it. It's your entire business. Right? So you've got 10 people using this product or 20 people or 5,000, depending on the size of your company. Right. In CSS. It's it's you, maybe you and your family. Right? So it's a little bit of a different switching cost.So that's, that's one. However, these companies can scale a lot of. and they can, they don't have like the heavy, heavy cost and, you know, on the sales and marketing side. So I think they have an ability to actually get to profitability a lot faster, especially if they have an organic customer acquisition engine.And so I think that's going to be a big difference between that, between CSS and SAS. 00:24:23 Jacob:So, yeah, you mentioned the metrics are different. What are, what are the metrics that folks are, public investors are looking at for these companies that it might be different from a SAS company?00:24:33 Eric:Yeah. I mean, a lot of them are the same metrics, but the numbers that are like good are different, right? So like on a SAS business model, right. Revenue growth is just as attractive as a CSS business model revenue growth. Right. Everyone wants to see high double digits, triple digit numbers on revenue growth.But like an interesting thing is net revenue retention. Now that's very different, right? In CSS, you typically don't upcharge people or have additional seats be filled because it's just one person. Right. So, you know, maybe you get an. 00:24:59 Jacob:It's not much expansion opportunity. 00:25:00 Eric:Yeah, you can, you can do maybe some, some packages, upgrades, and people are starting to experiment that you can pack it and you can experiment with bump, bundling 00:25:07 Jacob:But it's certainly never going to be greater. It's never going to be net positive, right? 00:25:11 Eric:No, you're never going to see a net positive number where a lot of the SAS businesses, right.People are looking for net revenue, retention, numbers of north of one, 20, 120% net revenue retention 00:25:18 Jacob:I mean the opposite of churn, right. Which if you have a CSS business with opposite, Congratulations. like 00:25:25 Eric:Yeah. You're doing something well, and I haven't found it yet, but yeah, 00:25:28 Jacob:You might be the only one 00:25:29 Eric:Yes, I think that's right. 00:25:31 David:Quick, point though, to counterpoint to what y'all were both just saying, of all the apps, dating app, it's totally slipping my mind. 00:25:40 Jacob:Tinder. partnership. David, look at us. We're like on a wavelength. 00:25:46 David:They, they have in-app purchase. They have consumable in-app purchases to boost your, profile. They're one of the few that I've seen that could potentially actually have a. A a positive, net revenue retention. whereas most subscription apps are just a subscription. it's going to be interesting to see if other subscription apps can pull off that sort of model that you could actually generate a, a net net revenue retention. 00:26:19 Eric:I think you nailed it, David. So that's coming from. Right. I think people first experimented with, Hey, how do I get someone to buy my product every year or every month? Right. And now is how do you make it even better? So they're starting to listen to their core users. And we talk about this a little bit on the LTVs.And what do these people want and what makes this experience even better for them. And I think you nailed it with Tinder, right? It's the most, it's the easiest thing to convince people to, to encourage more is more, you know, more relationships, right? People love more relationships and people are willing to pay for that.And so, you know, then what else, what else could this go down the path of, right. What other options could people pay for additional services? Or what we've seen is like marketplaces or transactions spinning on. Right. So if you have a really passionate user base and they're going out there doing, camping, for example, like on, on the dirt, it's a camping site, right?What about doing a marketplace to buy and sell use tents right now is not a subscription, but now if someone's paying, like, okay, now they bought something through your marketplace and you get 10% of that purchase price. So there's going to be a lot of stuff. I think that happens there, to encourage that, to encourage that LTV numbers start rising, I just haven't seen a ton yet, make it happen above 00:27:26 Jacob:It's a scale problem. I need to do that either be at such scale for that to make sense. So I was going to say for anybody, listening to this, that hasn't reached 20 million in ARR, probably north of that do not add a marketplace to your 00:27:37 Eric:I totally agree with that. Very, very much focused focus, focus. And so I would even say like closer to 50 00:27:43 Jacob:Yeah. I mean, until you're like, how do we get this thing public? Or how do we show, like, how do we show like N plus one revenue streams, right? Like it's kinda more what it's about than it is necessarily the revenue generated. 00:27:53 Eric:I'm just a dreamer though. You're just a realist. I'm here, I'm here. And you're just telling me all that stuff that could go wrong. 00:27:58 David:One of the things you just kinda touched on that I wanted to dive deeper into was, was a truth about LTVs. And I love this slide on the, on your presentation, kind of defining these two cohorts, which I've never heard, defined this way. And I really loved the analogy and I'm going to start sort of stealing it from you and use.And crediting you of course. but in the presentation you define, tourists and locals, and then talk about kind of the importance of identifying these different cohorts. So tell me about Who the locals are and why that matters and who the tourists are and how companies can start, analyzing their data to understand this and better target marketing, better, craft the experience in the app and, and those sorts of things. 00:28:46 Eric:Yeah. So we're going to geek out here guys, and, really go deep into STSS. Right? So this is where, this is where my brain goes sometimes on a Saturday night, which is just exciting. but so the way I've been thinking about CSS a lot, and so the LTV component of CSS, which is lifetime value, Which I'm sure all your listeners are very, very well aware of is kind of like how much money can you make from this consumer over time.Right. And it's a function of your pricing and it's an, a function of your turn rate. And so, a lot of people are very focused on this metric as investors or buyers, right? Because it's effectively, how valuable is your customer? So it's an extremely important metric. The problem with this metric and lots of other metrics is it's, it's derived from an app.Right. It's looking at all your users that come into your, in your ecosystem is paying customers. And then how do they perform over time? and it's, it's driven, it's driven off an average of all your users. And so when I've gone through some of my client's data and you look at their user base, right, we, we quickly discovered there's a, there's kind of two different profiles.And I won't use any names here, but let's just, let's just say it's, a walking company, right? So you're, you've got people that go out and they, they sign up, you have a hundred people that. And 20 of them start walking every day and they're, and they, this is what they love and they're tracking, they're walking and you've got another 40 that do it for like a month or two.And then they kind of drop off and then just like, I'm going to go do biking or skateboarding or something. And I switch and you've got another people that sign up. They subscribed to it because their friend pressured him into it and they hate walking and they're never going to walk again and they turn off immediately.Right. So you kind of have those three different groups, some that are just going to do whatever. Some that do it for two to three months and then leave. And then some that do it the first month. And then say, forget this. I'm never going to use this again. And so the problem is your LTV of each one of those three groups are very, very different.And so what, we've, what we've been guiding investors and entrepreneurs, as they think about their growing their businesses, really find out who those locals are, who those people that are going to come and use your app every day, every week, every summer, whatever, whatever the metric is that you're looking.And find ways to measure that, right? Because ultimately that's who you need to bring to your community. And one, those people make the community run more robust, right? Cause they're constantly contributing feedback into the. To, they're much more likely to stay around with you guys. And so you need to find those tools that they're looking for.Right? Like seeing around the corner and saying like, okay, this person loves walking. What else can I provide them? What about a weather forecast? So now that they are about to go out and walking, you know, what does the weather look like? And, oh my God, this is now, this is my one-stop stop for, for walking.And so I think w we've been guidinGP Bullhound's like if you use the averages as a broad metric and that's great, and you should, because investors are going to want to know that, but, but really dig deep into your, your cohort and understand like who's using this every day, all day and what do they need. And so if you can really identify that and show that LTV to, to invest in.I think you can get people a lot more excited than just like that average LTV, right? Cause this shows them potential of what it can be over three to five years, which is really important if you're two or three year old company. Right. And try to convince someone to invest in you showing them that lifetime value of the tour or the locals is going to be a lot more valuable than that average.00:31:46 Jacob:I mean, if you think about just as the, you know, I think it's one of the, you highlighted one of the hard parts of assessing these businesses early on, is that yeah. Your cohort, your total subscriber base is very heavily biased on like your most recent cohort, because often you're also growing, right?Like that's often, like your most recent cohort might be the size of your first five, you know? just because, and for that reason you can really have scurry looking data. but you know, if you think five years from now, mostly. Those other two groups you mentioned there they'll have turned out from most cohorts.Right? And then the only ones remaining for four years of cohorts will be these locals and these long-term retention. And then your total subscriber base is gonna look very different than it does today. Right. And yeah, I'll admit revenue. I've tried to solve this problem in the product. And we still are trying to solve this problem in the product.It's how do we like show people? Cause you're, you're dealing with a mixed population, right? And like you, you can also also run into a problem with begging the COO or like doing very, like, look, you got to invest in and say like, look, look how great my retention is. If I just ignore them. Bad users. Right?Like, let me just look at the good ones. Right. But there is something there in that. What you're talking about, Eric, that long, that very long-term view is that if these users really do retain for a long time, eventually they will be the lion's share of. Subscriber base. And that churn that we talk about, like, you know, if you're adding 1% of your total user base, the most you can experience off of that as like 1% of churn, right.Versus when you're adding half, you know, if you have 110,000 subscribers and you add 10,000 in a month, that's going to be a huge effect to your overall subscription subscription base. Right. so yeah, I think, I think, you know, we certainly have a lot to build on the tooling side. Right. And I think it goes to what you're talking about.Air. We're very early. Like, I think we've just kind of solved infrastructure, like infrastructure. I mean, I would even say kind of, cause there's a lot for us that we need to do yet. but as far as like data science and actually yeah. Being able to outside of a spreadsheet, understand this stuff. It's it's, it's not trivial.It's not trivial. All 00:33:51 Eric:It's extremely hard. And I think like, cause there's so much more you could do once you've broken those two cohorts into tourists and locals, right? Like how do you acquire the locals versus how do you acquire the tourists? Are tourists coming through like Facebook, apple store and the locals are coming from referrals.Okay. So maybe your Facebook spend, is that even worth doing the spending on right. If they're, if they're turning off after a month or two, you know, subscribers is a vanity metric, right. If they don't. All right. You can grow. We talked about this in our 2020 report. We have like this cheetah versus thoroughbred.Right. And it's really easy to show a ton of growth. And you've got all these subscribers and everything is fantastic. Right. But if those subscribers get tired and they turn off right away, you kind of probably wasted money on them. Right. Maybe you got paid back in a month, right. So you didn't lose like on the CAC spend right in here, but you're not building your business.Right. You're just gonna you're pinching pennies. 00:34:36 Jacob:But not a lot of work. Right? Like it's not actually getting translated into business 00:34:39 Eric:Exactly. So is it better to kind of focus on the product, right? Figure out what those, those, tourists are using and spend less time on the marketing side and really nailed the products like, Hey, you'll probably grow slower, right? And That's an issue. That's a risk you have to take, but maybe you can grow more efficiently, more capital efficiency.00:34:55 Jacob:Capital's free now, so that's not a 00:34:58 Eric:That's a fair point of half my fault, I'll take full responsibility for some of that. Right. 00:35:03 Jacob:I think it's interesting how this like feeds into, you know, kind of going back to targeting and ad targeting how often. Optimized Facebook campaigns on like trial conversion. And that doesn't even that doesn't, that's all your tourists and your locals. I mean, maybe some of those that never even start a trial would be cause, but there's a lot of tourists in that group that started trial right.Or convert a trial. And a lot of people are targeting off of that. Right. And so as these methods become less. Good. it will force it'll force developers to yeah. Maybe do one of these scary things actually talk to users, right? Like actually like find those locals, like go in your analytics. And I think just the thing as you were talking about, I just want to point out that, like, I don't think you necessarily need to define this off of monetization retention either could just be retention, like pure usage retention, but it could also be engagement.Yeah. I think about the way Facebook, Oriented their growth teams very early on, which was like findinGP Bullhound that connected, like that was a really key step for them in their product, was to get people to make like three or four. I forget there's some number of friends and they oriented all of their growth efforts around that.Find the thing that people do in your. Shows that they're engaged and give them opportunities to show that. And then, you know, you can use that as an indicator. Okay. Talk to those folks and actually talk to them, right? Like find out, always put something in your app that lets you reach out to them in some way.And like, have you can get on a zoom call. I've done. It's easier now in SaaS land because like, I, I, I, people I'm an app. People like I know how to talk to them, but when we were, when I was working in consumer. Phone calls were more awkward, right? It was different. You're not going to books like outside of computer land, but still like just incredibly valuable.And, and, and, and I think like, you know, if we want to talk about the way to build the way to fully realize how CSS is going to, I'm just going to go all in on your turmeric, by the way, I said, I'm going to, 00:36:57 Eric:That.00:36:57 Jacob:I'm going to push it. We're going to standardize. But 00:36:59 Eric:It's not trademark, but knock it out. 00:37:01 Jacob:All right. So to fully like, to fully realize the potential to like help problems for people.Like, I think we need to lean into this more of this model. Right. Rather than I've always kind of like had an uncomfortable relationship with how our RevenueCat fits into the like hyper fast monetization stuff. Right. I'm like, get users, check your CAC, put more money into Facebook. Right. And so, the more the industry gets away from that. The happier I am. I don't know. Like you said, maybe it doesn't go quite as fast, but I think the overall Tam will be larger. Right? If we take that approach,00:37:33 Eric:Think that's right. And, you know, I mean, I've talked to a bunch of founders that haven't raised capital. Right. And they build something that like their users love. Right. Like, so I don't know if you guys saw the deal with day one that got bought by automatic braised almost as your outside capital.Right. He built. 00:37:46 Jacob:Big fans that they won. 00:37:47 Eric:Yeah. Yeah. I was a big,I got it's an awesome business and he did that exact same thing. Right. He just listened to his users. He didn't care about vanity metrics grew really nicely. Right. And it wasn't like, you know, he's not getting tech crunch publishing, but that's fine. Right. You know, on an amazing business.And then, you know, I've got a fantastic exit out of it. So I think, I think people are really waking up to that's a very much a possibility here in the.00:38:08 David:Yeah, one thing I wanted to highlight too, in that graph that you made, and for people that are listening to this, you can go to the show notes. We'll have links to the, Eric's presentation and you can find this chart, but to visualize it00:38:25 Jacob:Page 18. it open right here. 00:38:27 David:Following along at home, the, line for the locals drops.So, you know, even, even for locals, you're going to have some turn early on, but then it essentially flat lines. and I'm sure you did that very purposely to kind of illustrate how. How long term some of these, these, this retention can end up being, and it's something we've actually been talking on the podcast about recently is that we're so early in the space.We don't even really know what, how to measure LTV. Cause you're going to have people who ended up subscribing for decades. and years and years and years, if not decades. And so, and, and then, you know, to your point about the cheetah versus thoroughbred, another great chart in the patient number, Jacob Page number00:39:16 Jacob:I 00:39:17 David:Cheetah versus thoroughbred but in that tuna versus thoroughbred, The other aspect to locals, and we're kind of touched on it earlier is that those cohorts start to stack. So when you identify this cohort, that is going to be a very long-term cohort. That's going to stay subscribed and have very low churn. You, you acquire a hundred thousand this year, and then they're still there next year.And you put a hundred thousand on top of that. And those are still there next year. And by year three, you know, you just continue to grow this pie of people who are very, very sticky in the product. And I think that's part of what. you know, what you're talking about with delinquent and Bumble and other companies is like, we're still just starting to understand even as different as this is from SaaS.We're starting to see similar dynamics as far as. Early on the churn is so high, but then you do have this really strong stickiness over the long-term that, that, that can build a really healthy business of people who really love your, your product and really are invested in it and are going to stay for a really long time.So yeah, I just wanted to point that out that, that I, I love that aspect of the chart of how flat that line is for the locals. 00:40:35 Eric:I mean, you, you can see it in your own spending patterns, right? Like how many of you guys have subscribed to Netflix or Spotify for more than five years? I bet it's a good chunk of your listeners. Right? So, I mean, if I look at my phone, right, I'm going to subscribe to all trails for the next decade, 00:40:47 Jacob:Yeah, I've got CSS. I I've started subscribing to in 20 13, 14, like as 00:40:52 Eric:Yeah. 00:40:52 Jacob:It was a thing, 00:40:53 Eric:I've, been a script user for four years and I still download audio books or download other books from like the San Francisco library. Cause I'm probably the cheapest banker of all time. but you know, I still use script 00:41:04 Jacob:It's finding margin, Eric you're finding margin. That's what that is. 00:41:07 Eric:Exactly. I've pinched counties all day.But yeah, so I mean, I, I think those tails David to your point are still being written. And so that's the whole point, right? If you use average LTV and you say, all right, well, we have 30% churn that math means you lose every user in three years, and that's just not how it works. And if with really good businesses that are delivering value, right?And so then once you convince people of that, right, the investment case becomes a very different company.00:41:30 David:And speaking of that, you, you had a great, slide on investor benchmarks. And so I wanted to get to that real quick, tell me about how you, how you thought. These different metrics. And what, and how investors think about these metrics? Because you know, we're talking about LTV and in there you have LTV to CAC of you, you know, for a really strong app, that investor would be super excited about.You're closest to. Six X versus less than three X, you start to cool off. So, yeah. Walk us through each of these metrics and kind of how you think about it, how you think investors think about it, And even how that's kind of maturing as we understand the space better. 00:42:10 Eric:Yeah. And just to note like these metrics are all different for different types of businesses, right? If you've been around for a year, these metrics are very different versus if you've been around for 10 years, right. If you're in high growth, you know, venture back, spending a lot of money, these metrics look very different than if you're a bootstrap business, you know, just trying to inch out.You know, 10% growth a year. Right. So they can be very different. And the important thing is how does the story of your business and what you're trying to accomplish tie to these metrics? Right. So that's what we spent a lot of time talking to founders about is, is what's good based on what you're trying to do.Right. So it's just how you, how do you tell your story through the metrics? but yeah, so a couple of your points on the S on the slide, we talk about like user growth rates, gross margins, LTV to CAC, churn rates, free to paid conversion rate, and then sales efficiency. and then, you know, just to talk about something different, we, we talked about LTV a little bit earlier, but maybe talking about, churn, right.And so like how quickly do people churn off? Right. And so that's, there's a couple different ways to interpret churn, right? It's one, they didn't find your product. Too. They thought it was really expensive. or if they're not turning, they really love something you've put together. Right. And they decided to pay you multiple times for that either monthly or annual.And so what we just try to do is try to tell the story of where the business is at and where it's going by looking at these metrics. And so, you know, that's why it's so important to truly understand these metrics, because if you don't understand the metrics, it's hard to tie that to the story. so we spent a lot of time with any client or even non-clients just talking about this stuff to truly understand, you know, what investors care about.And it's, you know, if someone's buying the business, they may care a very good. They may care about very different metrics for someone who's investing your business for growth, right? So someone's going to put 40%, $40 million on your balance sheet to go grow. They may be focused less on LTV to CAC now because your LTV is not formally formed, right.They don't know how good it is, but they will focus very heavily on churn, which is a reflection of how good your product is and how good you're finding consumers that love your product. Right. So those, those are metrics that they may focus. They made me more comfortable spending a lot of money in the next two years.Right. So your CACs going to look a lot worse because they watched, you acquire a lot of users to make the platform a lot better. Right. And a lot of CSS businesses, right. UGC is a, is a, is a spinoff of user activity on the post. Beautiful uploading photos reviews. They're adding new new items on, on the platform for other users to use.And so it's worth spending more money to get those people in the first two to three years because your platform becomes that much better and that much more valuable, right? So you may be willing to burn down to a, an LTV to CAC of three X or something like that in the near term, or sometimes even two extra one X, because it's a land grab for those.Once you're on their platform right now. You want to see that LTV to CAC, start to move up a little bit, right? So you start to put it to four or five, six X, LTV to CAC. So it's all about where your business is. It's each different stage, but it's important to have a story and a message around why your numbers are, what they are.00:45:03 Jacob:Of the, I have the slides up in third slide, 37 for anybody who's following along at home. all of these as a veteran SAS CSS person, every annual user growth rate, gross margin to be cash I'll clear me, sales efficiency ratio. Can you talk about that one? Cause that one's, that one's, not as a little foreign to me. 00:45:22 Eric:Yeah. It's, it's a, it's more of a metric that's come out of SAS just to be honest. So it's thinking about like, it involves like how, how many users are you gaining? It's how much revenue you're gaining versus how much money are you putting out there? So it's a little bit of a different metric. and most CSS businesses don't get to that yet because they typically don't have heavy sales team.And so we've included it because you're starting to see some of these CSS businesses really start to grow. And so how much revenue gaining versus how much revenue you're losing and how much is it costing you to do that? And so that's when you're starting to get into like the tens to $20 million of, of, marketing spend a year, it's, it's, important to understand like how efficient is that spend being, and this is the best metric 00:46:00 Jacob:We, it says called sales, but you actually throw in marketing, spend in there as well. So it's like all go to market spend 00:46:07 Eric:Yeah. Are using head count, not just like the ad dollars. right. 00:46:10 Jacob:Right. 00:46:11 Eric:It's like a fully loaded CAC number, like 00:46:13 Jacob:Your, all of your people telling Facebook what to do, 00:46:17 Eric:Yep, exactly. Exactly. 00:46:18 Jacob:Content graders, like all that stuff, right? Yeah. 00:46:20 Eric:If you've got a hundred people running around campus, right. Promoting your app. Right. Okay. How much those people cost. Right. So it's an important way to think about how much you grow. And it's a way to think about like how well can you grow a capitally efficient capital with limited amounts of capital.So it's an important one. We look at it, it's typically a later stage, right? So you've gotta be like north of 20 million of 00:46:40 Jacob:So he's going to be super high when you're small, right? Because you're, you're your. 00:46:43 Eric:Sir. Request important. 00:46:44 Jacob:People are discreet. Right. And that you can't, you're not continuous. So, and also your, your, your revenue just grows less because of like, you know, you're smaller, you're less, well-known like, you're less is momentum is things like this. 00:46:56 David:Well, we're starting to run low on time, but there's so much more I want to talk to you about, but just to hit one last thing. I also love this chart you did, of Pandora versus Spotify. It's such a. And encapsulation, really everything that we've been talking about on this podcast is to see how well Spotify revenue has compounded over the past few years versus a Pandora, which, which look was the juggernaut.You know, when, when, when Spotify started. so, so walk us through this chart. And in how and why you think, you know, Spotify was able to, to grow the way they did while Pandora really struggled. And obviously there's a ton of, you know, other business factors and execution and other things. But, but I think overall, this does speak to the power of CSS.00:47:54 Eric:Yeah. And this is, this is something we did back in 2020 when we were just trying to decide like, Hey, what's is this CSS thing real? And, and a big question you get from, from investors. And listen, I think a lot of them have stopped asking this question because the case studies are out there is why would someone pay monthly or annually for something they can get for free?And by get for free, it means listening to, or watch. Right. And so I wanted to see like, alright, graphically or like actually numbers to will people, more companies make more money by making that really hard decision and say, pay me for what I'm giving you first. I'll give you something for free and exchange every half hour, you watch two minutes of ads, right?That's a really hard question to say, because it involves you putting a lot of value in your product. And so entrepreneurs, you know, product developers have to. Is this worth money or am I giving something out to people that, Hey, they'll kind of use it if they get it for free. Right? So it's a, it's a gut check for people to say, like, did I build something that someone will buy?That's hard. That's really challenging. Ask yourself, especially if you've started with advertising. and Spotify, you know, listen, they were a small company based in the Nordics, right. Versus Pandora US-based juggernaut and, and raised a lot of money. Right. That's a tough challenge. And so they took a really tough thing and said like, Hey, we're going to get.And make people pay for our product and we're going to make it better. But the crazy thing that happens though, right, is you make so much more on a user from subscriptions than you do from average. Right on advertising. You're trying to pick up pennies per subscription on some or pennies per user on the subscriber.You're making 10, 20 bucks a month, depending maybe maybe $60 a year for a subscriber. So the amount of users you have compounds so quickly, and then if you have that heavy retention, all of a sudden, you've got these really thick layers of cashflow that come in every year, use that cashflow. You invest it back in.He invested back in product and you do it again and again and again, and all of a sudden you've got a better product. And if you have a better product, people will come to it. And if it's something that they're using daily, right. Why would you not be comfortable like paying five bucks? Right. If I think about like how much my Netflix subscription is, right.It's $11 a month or something like that. Right. Well, I probably watch 10 hours of Netflix a month, right? So I'm paying a dollar an hour to be entertained. Pretty good deal. And so, like, I think if people, people start doing that math and you start to see like how powerful that that subscription is for user versus an ad driven, it becomes pretty interesting.And so I think you've seen this case study play out over and over and over across CSS, where if you build a good enough product, you know, a 10 X product versus the free option, people will pay for it. 00:50:24 David:And Spotify does double dip as well, which is interesting is that they have a good enough free tier and people can listen for free. But they choose to spend, even though they can. And so, so Spotify is a great example of, of double-dipping with a great freemium tier, but then a good enough product in a compelling enough reason that people will pay.00:50:47 Jacob:Yeah, another dimension. I don't know the specifics of Pandora and Spotify. It's like fundraising history, but if you have like the subscriber. Subscription revenue momentum makes capital more easy to access. And you look at some of this. I think of some of the strategic stuff that Spotify has done. Like they got the Beatles on Spotify pretty early on and lets up, they spent big on partnerships and Content and stuff.And if you have momentum, if you have hard dollars, it's a lot easier to go to an investor and be like, Hey, like I want to raise X million dollar. Revenue growth. I have, like, this is very clearly a business. I can remember raising money in the pre revenue is everything era or like trying to raise money.And it was like a lot harder. Right. Cause it was just like hand waves and we're going to grow and like, and now it's like, yeah, for better or worse, you go over the curtain and you show something. Right. But the big benefit too, I think for founders, it's not just for investor, for founders. It's like, yeah, you build a great business.You're building a safety net, right? Like if you can't fundraise, it's not the end of the world. Like you have options. And I think that's part of the reason why also, I mean, now we're getting into fundraising like macro, but that's part of the reason the funding environment is crazy because businesses are sturdier than they've ever been.Like they need capital less than they've ever needed it. Right. And so like, that's why it's gotten cheaper. or, you know, evaluation's gotten higher same thing. Right. So, Anyway. Yeah. And this is a fascinating to put this. I already was not on here, which was my horse. And I was like really pulling for them.And then it gets to a whole different story of why that's not on there. But, but yeah, it's fascinating.00:52:11 David:Well, I think that's a really fun place to end the story of Spotify, one of the biggest juggernauts in the space. We're going to include in the show notes a link to the report, a link to your LinkedIn and Twitter to follow along.Anything else you want to share as we wrap up? 00:52:27 Eric:No guys. Always a pleasure to join you. One thing for your audience users, we are trying to make the GP Bullhound CSS report a resource for founders. This year, for the first time ever, we did include a link to a survey.So, if you want to contribute your data, what we'll do is aggregate everything, anonymize it, and then we'll provide back a summary to users to say, “Hey, here's your LTV to CAC. How does this compare to other founders at this stage?” We are trying to be a resource. I'll probably give you guys that link, if you don't mind. We'd love to have as many people as possible. No pressure.Of course, all of it would be anonymized. This isn't a marketing tactic for us. It's us giving back to the community. We'd love people to take a second to do the survey, but if not, don't hesitate to email me, tweet at me, hit me on LinkedIn with questions, comments, and specifically stuff We got wrong. Absolutely love to hear where we can learn.00:53:22 Jacob:Yeah. 00:53:23 Eric:Because we're not building, we're just talking about what you guys are doing.00:53:26 Jacob:By the time you print this thing, it's like, stuff's changed, right? Like it's changing so fast.00:53:32 Eric:The whole Apple thing when we were publishing was happening everyday. And I was like, this is unbelievable.00:53:36 Jacob:And wait to...00:53:36 Eric:Since July, and I have to change every minute. Yeah. I had to change a PowerPoint. You guys had to change code. So I think one was a lot harder.00:53:44 David:Well, it was great having you on, Eric, and we'll have to make this an annual thing.00:53:49 Eric:Sounds good.You're welcome.00:53:51 Jacob:Yeah, we'll see you next year. 00:53:52 David:See you in 2022.00:53:54 Eric:All right. Thanks David. Thanks Jacob.

Strength to Strength
The Glorious Majesty of His Kingdom by Leo Eby

Strength to Strength

Play Episode Listen Later Dec 19, 2020 73:07


Strength to Strength welcomed Leo Eby to share about the Kingdom of God as described by David:They shall speak of the glory of thy kingdom, and talk of thy power; To make known to the sons of men his mighty acts, and the glorious majesty of his kingdom. Thy kingdom is an everlasting kingdom, and thy dominion endureth throughout all generations.Psalm 145:11-13 KJVAn interactive question-and-answer period follows.

Up Next In Commerce
Written in Stone: How and Why to Implement Personalization

Up Next In Commerce

Play Episode Listen Later Nov 17, 2020 42:16


Keepsakes, momentos, treasures, heirlooms — whatever you call them, everyone has certain things that they hold dear. For many people, hand-written notes fall into that category. In a world filled with 240-character tweets, rapid-fire text messages, and a stuffed email inbox, getting a hand-written note means more than ever. Even if it comes from a brand.   Personalization is one of the buzziest words in ecommerce, and every business is trying to find a way to give its customers the best, most personal experience possible. David Wachs is helping them with that.David is the CEO of Handwrytten, which uses robots to send personal, hand-written notes, which have a 300% higher open rate than other types of communication. On this episode of Up Next in Commerce, David explains why personalization is the way of the future. Plus, he dives into the thinking behind subscription-based services and what it takes for your subscription to stand out to investors. David also shares the advice that he received from Conan O’Brien that has stayed with him his entire life. Main Takeaways:This is Getting Personal: Over the last few years, consumers have started seeking more personalized experiences. There are many ways to create those experiences in-store and online, but ecomm businesses have a personalization advantage due to the data they have access to. Brands that can tap into that data and then follow through are the ones that stand out.   Subscribe Here: Subscription services are popping up everywhere. When done correctly, subscription services provide a recurring revenue model, which is something most investors look for. However, creating the right model takes time, effort, and experimentation, and it’s important to be willing to put in that work to find the model that is best for you and your customers. Here’s Some Advice: When one piece of advice sticks with you 20 years later, that’s something worth paying attention to. Tune in to hear what words of wisdom from Conan O’Brien have inspired David every step of his journey.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, co-founder of mission.org. Today on the show, we have David Wachs, the CEO of Handwrytten, spelled with a Y. David, welcome.David:Thank you so much for having me.Stephanie:Yeah, I'm really excited to have you on the show. I just went down a great wormhole of watching your robots write letters. I think that's a great starting point to hear how you came to be at Handwrytten. What brought you to found it?David:Yeah, so this is actually my second venture. My first one was in the text messaging space. So, I started that one before the iPhone came out. We rode the wave of mobile technology with the iPhone and all that. By the end, we were sending millions of messages a day on behalf of major brands, like Toys R Us, a lot of brands that are now bankrupt, but no fault of ours, but Toys R Us, Sam's Club, OfficeMax, Abercrombie & Fitch, etc.David:What we did was we helped them connect with their customers through text messages. And then we also did iPhone apps and Android apps and all that, but our core was really text messages. What we found was, it really, really worked. I mean, these were not spam messages. These were people opted in, so they actually wanted to receive Abercrombie & Fitch offers, etc, straight to their cell phone. When we sent out those offers, they'd have literally lines out the door.David:We worked with Tropical Smoothie Cafe, which is a big smoothie shop chain. Every time they sent out an offer, I'd walk into a Tropical Smoothie. I'd say, "How's this mobile thing working?" They didn't know who I was, and they'd say, "Oh, my gosh. Every time we do it, we have to staff up, because we sell so many smoothies." So, I knew we had something good. But at the same time, I helped create a monster, because everybody nowadays is getting inundated with probably 50 text messages a day from family and commercial texts and right now, political texts, several hundred emails a day.David:I think the average office workers receives about 150 emails a day and spends 28% of their time sorting through all that email. And then you add stuff like Twitter and Facebook and Slack and all the Instagram, all these other electronic forms of communication. Maybe I'm just old, but for me, it all just becomes noise.Stephanie:It's very noisy right now, especially with the political texts that I'm getting.David:Oh, my God.Stephanie:I'm getting like five a day. Stop it. I don't want that anywhere.David:I know, I know. It all just becomes noise. The average 35 to 44-year-old receives nearly 1,600 texts a month. The average 18 to 24-year-old receives 4,000 a month. So, what I know and what you know is no matter how personalized that email or that text looks... Hey, David, thank you so much for your purchase of this coffee grinder or whatever. ... that text was automated or that email was automated. We immediately discount the value of it, right?David:Half of them or way more than half, I never even read, because you just know it's automated junk. And then junk mail, the slick stuff that comes in your mailbox goes directly to your trash can. But what I realized right before leaving, my last company, is handwritten notes not only do they get opened, but they get treasured. I have a bookshelf behind me at my last job that had the handwritten notes I received. My salespeople had all the handwritten notes they received. What I wanted to do was when I sold my last company is I wanted to send handwritten thank you notes to my employees and send handwritten thank you notes to my best clients, thanking them for helping me build up this company and sell it and all the rest.David:I started doing that. I sat down with the best intentions. Very quickly, my hand got sore or I ran out of stamps or I screwed up a card and I had to get another one. I just realized there had to be a better way. So, that's a long explanation on how I ended up with Handwrytten, which is what we have today. What Handwrytten is a combination of software on the front end and then robots on the back end. So, you visit handwrytten.com or use our iPhone app, Android app, Zapier, Salesforce.com Integration, which is a big integration for us, and I know a sponsor of the show, HubSpot integration, all these ways to get your handwritten notes into the system.David:And then we use robots, real robots that we have a patent pending on and I can get into how we develop those, but they're custom robots we built, robots holding real ballpoint pens that actually then write out the notes and mail them on your behalf. The end result is completely indistinguishable from a human.David:We're doing this for large brands and small brands and individuals. Consumers can go on and send their mother a birthday card, for example, all the way up to major brands.Stephanie:Though your mom might know. She'd be like, "That's not your handwriting, Stephanie." Do you guys have any tech that maybe could mimic handwriting, where I could go in there and write up a couple words, and then your robots come in and write it similar to my handwriting?David:So, not exactly. What we do is if you really want your handwriting recreated, we have worksheets for you. It's like you're back in middle school. You have to fill in all the letters and all the numbers multiple times, because we need multiple variations, and we need ligature combinations. So, like two Os together, two Ls together. Do you cross your two Ts with one crossbar or two? We take all that into account. We create a very robust handwriting just for you, but it's an expensive onetime thing. So, pay for it once, it's yours. It's in the system. You can use it as much as you want, no additional charge. So, yeah, but most of our clients or businesses not you sending to your mother. So, for them, it doesn't really matter as much.David:Honestly, I dissuade people from creating their handwriting style, because it is so expensive.Stephanie:Very cool. So, tell me a little bit about maybe some case studies or the ROI that some of your clients are seeing when they send out a note that looks personalized versus just a typical letter, something that's written up by a computer and is very obvious?David:Yeah, absolutely. Well, I have a bunch of stats here, but I don't want to constantly give you footnotes on the stats. So, if I say any stats that are of interest to any of your listeners, just visit Handwrytten.com. That's Handwrytten with a Y. You can pull up all the resources and double check, be a fact checker, etc. But handwritten on envelopes, just the envelopes, have a 300% or a three-time greater open rate than printed envelopes. You just Google that stat and that pops up everywhere. And then also response rates are anywhere from 20 to 50% higher.David:We work with a bespoke suit company based in Canada. They send out coupons every year around the holidays. Those coupons come with a handwritten note from their CEO and his handwriting style with his signature. Those coupons have an 18% redemption rate when usually the company's coupon redemption rate is closer to the 3 to 5% rate. So, it's been very effective for them.David:We have other clients... Let me see here. We have some retention improvements. So, we have a client that does meal box or actually snack boxes for offices. Basically, they'll send you a huge box of snacks every two weeks with like beef jerky or crackers and cookies and all that. What they do is if they accidentally send your office the wrong snack box, they'll follow up with a handwritten note and the right snacks. Now, obviously, the additional snacks help increase retention, but the handwritten note doesn't hurt.David:What they find is if they screw up a client and they send them this snack box, that customer ends up having a greater lifetime value than if they never screwed up in the first place.Stephanie:That's smart. I mean, not only are you getting more times to get in front of that customer, but then you can show them how great the customer experience is even when things go wrong. Yeah, it seems like you'd be a lot more memorable by actually messing up. That's pretty smart.David:Yeah, and then we have some side effects of these, because most people just get one or two handwritten notes a month now, not like the good old days when they receive a bunch. People literally Instagram and tweet these things. So, we work with a company called VNYL.David:What they are is they are a vinyl record subscription service. So, if you're really into old school vinyl, they will look at your Spotify account and your other... I don't know about Pandora, but your other music services. They'll see what you listen to. And then they'll send you vinyl records that they recommend based on your habits. With those vinyl records, they'll include a handwritten note written by us. So, every day we'll write up a whole bunch of their handwritten notes, send them back to VNYL. They'll get inserted with these orders. Not only people love those notes, they then post them on Instagram and on Twitter. That creates a viral aspect that then helps drive more business back to VNYL.David:We've seen the same thing with a morning YouTube show. It's one of the largest morning YouTube shows on the planet. They're a client of ours. They were launching a fan club, where you'd pay 5 or 25 bucks a month or whatever to be a part of their fan club. The first thing they'd send you was this handwritten note from the two hosts of the morning show.David:What's funny is they didn't change up the language on that note at all. Everybody got the same note with the exception of dear Stephanie or whatever, but the rest of the note was identical. All these people are posting these photos of this note to Twitter over and over again. I mean, it's the same note just different names over and over. People were so upset if their note did not arrive within a few days. You know what I mean? They were so looking forward to receiving a note from these two YouTube guys.Stephanie:Are there any backlash on that? Because I could see some people feeling like maybe they were tricked, or especially earlier, when you're talking about retention. If someone is sending out a set of vinyl records every month and see similar handwriting or the exact same one every single time, it seems like there could be a risk of someone saying, "Hey, this isn't actually authentic. You tricked me." Have you seen that backlash, or how do you guys approach that when it comes to a subscription model with someone who's maybe sending out a same snack box every month with a note in it that people will eventually be like, "Oh, yeah, this is obviously not a person writing it. It's the same every single time"?David:Yeah, that's a great question. So, with VNYL, they've got a number of personalities that are the box curators. So, there's like 10 some odd people that are responsible for making these recommendations. Each one of those people was assigned one of our handwriting styles. So, if you get a note from Cody, it'll be in Tenacious Nick. Our handwriting style is called Tenacious Nick this month. And then next month, you get a message from Suzy, it might be in Chill Charity. The following month if you get one from Cody again, it'll be back in Tenacious Nick. So, you'll associate Tenacious Nick with Cody. And then that's how that works.David:We have not seen a backlash. With the morning YouTube show, I was shocked that they didn't see it because they weren't... We vary stuff on the notes. So, in fact, we worked with a home fitness gym thing. They wanted a note from their founder included with every one of their products. They were annoyed with us that there was variation in the writing. We said, "Well, this is-Stephanie:A good thing.David:"... this isn't a print product. Every line's not supposed to identically look like the other card." They were just not a great client for us, because of that. They wanted everything to be exactly... That's not how people write.Stephanie:Yeah, that's actually the exact question I was going to ask. Do you incorporate errors or smudges? How do you think about building the technology behind the scenes to make it more real?David:Yeah, for sure. So, we actually built our own font engine for one, leveraging some best of class technologies underneath it all. But we do stuff like the left margin of the card is not straight. So, it's not like every letter of every line starts on the same exposition as the line above it. There's what we call jitter. It moves in or moves out very subtly, but a couple of points. A point is a 72nd of an inch for those that don't know, but yeah. So, we move those letters in and out, so that there's some variation there. We also do the same thing with interline or intraline, I always screw that up, but the spacing between lines.David:So, one line might be slightly closer to the line above it and slightly farther from the line below it than the next one and vice versa. So, there is some line spacing stuff going on there. Then, like I said, the letters themselves alter quite a bit. We've got at least four or five copies of every letter plus ligature combos. So, you might have three copies of an L, but then we also have three copies of two L's together. So, there's a lot of variation in going into our handwriting. We get this a lot. We don't curve the text. So, there is a little bit of maybe over precision on the text is fairly straight.David:Now, the page might be slightly rotated, so that the text runs up the page ever so slightly or down the page ever so slightly, but it's not like the text is going to be on a roller coaster and go up and then down and back again. It's relatively consistent. We are working on that, but it has not been a problem. It's still very much passes most people's internal Turing tests of what looks human versus what looks robotic. So, yeah, we don't want to overdo it. The line jittering and the left margin jittering is all very, very subtle. So, that it's not like creating some uncanny valley that looks totally bogus. You know what I mean? So, those are some of the things we do there. We work with a mattress company. In every mattress box, there's, "Thank you so much for buying our mattress."David:And then there was what I call a doodle. So, they made I think like eight of these little pieces of art. So, the words, "Thank you for your mattress," were not in one of our handwriting styles. It's a direct replica of somebody writing that. And then below that, the doodle is a direct replica of somebody drawing a doodle. So, it could be moon in the stars or there's one of somebody sleeping in a bed with a little thought cloud showing what they're dreaming of, a little cat.David:What was cool about that is with eight variations, if you buy two mattresses from them, one might have one little note from one guy in it and then the next mattress might have a note from somebody else in it. So, it looks really, really real. And then you post those to Twitter. It really shows up well there. So, that's what I recommend doing. If you're doing the same note over and over in volume, let's just mix it up a little bit. It doesn't cost you really anything more after you get going. You have some great variation.Stephanie:I saw you guys moved to having a subscription model, which a lot of guests who come on the show, they talk about thinking about doing that or some of them have recently. How did you guys know it was the right time to move into a subscription model?David:That's a great question. You're the first person to ask me that.Stephanie:Good.David:Yeah, so there's a number of reasons we did that. I will be bluntly honest, because I think it's of most value to everybody. Number one, I've self-funded Handwrytten to date for the last six years. I intend to continue doing that. However, we were just written up in the Inc 500. We had a good placement in the Inc 500. That created a lot of interest by investors. One thing investors are looking for is a recurring revenue model. While most of our clients recur every month, we have like solar panel installers that send thousands of messages a month. It's not structured as a recurring revenue model. It's just whatever you do, you pay for the next month, you don't do anything, you don't pay anything for it. So, we wanted to come up with a structure for a subscription model that would work.David:This is more the PR-friendly answer, but they're both totally true. On the flip side, we have customers that wanted to send a lot of notes a month but didn't want to do them all at once and didn't want to do a huge pre-pay buy. So, before this, there were two ways to get discounts. One was to do a huge pre-pay, where you say, "Okay, I'm going to send 10,000 notes for the next couple months, and I'll pay for that at a discount;" or go on our website and bulk upload a spreadsheet of 10,000 notes. For a lot of people, those two models don't work. What if I'm sending 10 cards a month, but they're spread out over the course of a month? I mean, I'm still sending 10 cards, can't they get a little bit of a discount on that?David:So, we tried to come up with a model that serves them. It's tough, because unlike an email provider or a CRM provider or anybody else, we have hard costs. Forget about the cardstock and the labor that goes into every card and all that, we have a 55¢ stamp on every card. That's expensive. You know what I mean? So, it took us years to think of a way that would make this work. What we decided was you prepay for credit. That credit, it goes on your account. So, you pre-pay 35 bucks, you get 35 bucks of credit on your account. But that credit also gets you a 15% discount on all orders for the month, so not just on the orders you spend the $35 on. After you exhaust that 35 bucks, you still get that discount moving forward for the rest of the month.David:So, that was the model that we came up with, because we wanted to provide value, we don't want to rip anybody off, but we needed a recurring revenue option. It is strictly an option. You can use our service for the rest of your life without ever using one of these subscription models.Stephanie:I think the one thing that came to mind was I've been listening to a lot of different interviews of SaaS founders, talking about how the subscription model, the future is not as much about getting into a long-term contract. It's more actually pulling back to where you only pay for what you use. It's not actually locking you into a contract anymore, because a lot of people are nervous about that or maybe prepaying. So, were there any surprises that maybe you guys have seen within the last week and a half as you implement this or pushback from customers or anything where you're like, "Oh, we weren't expecting that"? The consumer maybe thought this one thing, but actually, our plan was different. We adjusted it. Anything that you had to change after launching?David:Yeah, there's a few things. Nothing that was a got you and nothing we're really changing. It was more interesting. Okay, so we had somebody cancel their plan today. They signed up and then immediately canceled. So, if you sign up and you get the 15% off, that's 15% off the cards. That's not 15% off gift cards, which should go without saying, but maybe we have to add some language to the FAQ and all that, because I mean, that would be an arbitrage opportunity for somebody. You go on our website. You buy a Visa card for 15% off. You then take that Visa card and buy more Visa cards for... You know what I mean? So, that's just crazy town.Stephanie:It's good you didn't figure that out the hard way.David:No, no, this pre-pay for a while has always locked you out. I mean, when you pre-pay for something, you're pre-paying for the service, not for gift cards. It clearly does not work. I mean, it could be a huge issue. So, that was one. We had a woman that was very upset that she didn't get a discount on her gift cards, and we refunded her. We have a money back guarantee. So, if anybody uses our service and they don't like the service, they don't like the handwriting, they don't like the card quality. They don't like the subscription, whatever, we'll just give you your money back.David:I think more companies need to broadcast their money back guarantee, because even if they don't think they have one, they have one. On our website, we have our money back guarantee. Before that, if anybody called and complained, we still gave them their money back. We just didn't advertise that we had a money back guarantee. So, we gave the service without getting the benefit, if you know what I mean. Side point. So, point number one was people were shocked that you don't get a discount on gift cards creating an arbitrage.Stephanie:One person, but yes.David:Yeah. Point number two, I'm surprised that... So, we have a 10% plan, a 15% off Plan and a 20% off Plan. We might go 25%. But I'm actually surprised so many people subscribed for 10% off. I didn't realize 10% off would move the needle where people would be willing to subscribe. But if you're in that area where you send that many cards, why not subscribe? So, that's great. I'm glad people are using it. In fact, it's our most popular plan right now.David:So, that was two, and then three, which I expected. But my expectation was realized was people we have a cancel at any time type offer. So, we have a lot of people signing up for the 10% off plan, sending five cards, and then canceling the plan. That's fine. If they want to do that, I'm not going to stop people from doing it. It's more important to us to be transparent and create a plan that has no lock in and deal with the people that are just trying to take advantage of it. If they want to do that, fine.Stephanie:Yeah, I mean, it also seems like that you're still getting that sale and you'll probably be remembered in the future. They're like, "Oh, that was a good experience. Okay, I'm going to go back again.” So, maybe it's not as harmful as... Even though initially, you might be like, "Oh, that's annoying," but maybe the future customer that you wouldn't have otherwise had.David:Oh, yeah. No, I mean, it's totally fine. I've still sold them five cards or whatever it is. So, it's no big deal. It's funny how people will go out of their way to save 10%, 10% for me doesn't really move the needle but whatever.Stephanie:I know. Yeah, that's very interesting that, 10% moves people to act like that. I think the biggest thing that you are also saying is like the clarity in the subscription model, which I think is really important and that a lot of companies don't get right from the start, because they can make really confusing ones.Stephanie:So right now, it also seems like there could be... Well, twofold, either a big opportunity in direct mail or it's noisier than ever, because brands know that people are home and they're starting to do direct mail where maybe they weren't doing that a year ago. So, how are you thinking about direct mail right now and making sure that your notes are getting opened? Is there still an opportunity, or is that dried up with where we're at right now?David:So, I will say we are the largest handwriting provider in the world. Based on our volume, I will tell you there is room for improvement. We have very large brands using us, but it's still just a drop in the bucket of everybody that could use us. I think a lot of brands just don't even know it's an option.David:There's the BCG matrix, which is like the hardest thing to sell is a new product to a new customer. If you're an office supplier and you start selling your existing customer a different type of pen, well, they're an existing customer and they've already bought a pen from you. So, that's an easy sell. If you're selling a new customer a pen, people know about pens do an easy sell. But if you're selling Joe on the street that you've never met a handwriting service, it's very hard. So, there is a bunch of that. We're doing our best to raise awareness. That's been targeting quite frankly, a lot of Facebook advertising. We used to just go after Google and SEO, SEO, that type of stuff. But now, we're trying to drive awareness through Facebook and LinkedIn and all the rest.David:But yeah, I think there's a huge opportunity for brands to do this, because nobody is doing it or very few are doing it in a consistent, structured manner where some of our clients come to us and do a one-off campaign or one-off promotion, and then they'll say, "Oh, that was the greatest promotion we've ever done. We'll reconsider it again next year." You're thinking, "Why is it a promotion in the first place?" That should be an ongoing part of your CRM outreach strategy." Right now, we're developing a whole program just for automotive dealers to do just that, where you buy a car, you immediately receive a handwritten thank you. A couple weeks later, you receive a service offer, birthday card, happy holidays card, etc. It just repeats without the dealer even having to think about it. I think that model of moving it away from being a promotion to being a part of your CRM strategy is really what needs to happen.David:But a lot of other online brands actually have the advantage over traditional retail, because they have the home addresses of the clients where the retailers may or may not depending on if they're in the loyalty program. So, online brands have this huge benefit of creating a one-to-one personalization opportunity through handwritten notes that brick and mortars might not. So, there's that. And then also right now, it's at the disservice of large B2B brands, because they might have your work address, but then they don't have your home address. So, they're left out of the shuffle too. But even before this COVID crisis, we were seeing online brands take much better advantage of this than in-store.David:I can give you a perfect example here. We work with a very high-end perfumery that makes a very expensive cologne and very expensive perfume. Everybody that's buys this cologne and perfume from their website, they received a very beautiful handwritten note, thanking them for their purchase, etc. But if you walk into a department store, I walked in there with my wife and kids. We're walking through the mall, and we walked into this department store prior to COVID. I found the product and I was showing it to my wife. A store rep came over and said, "This is the product." I said, "Oh, yes, thank you. I'm just showing to my wife because we send out your handwritten notes." She said, "No, you don't, I have to send my own handwritten notes." I explained what I meant.David:She said, "As a store rep, we're supposed to send handwritten notes, but we're too busy talking to customers like you, finishing up a sale, cleaning up the merchandising of the department, doing whatever else is required. We never get around to it. So, even though we have the best intentions in place, because it's not automated for us, we don't get to it." We've been pushing this perfumery to offer the same service to their in-store experience, which would create a much better personal one-to-one experience than the online only.David:Where we've done a really good job of this or really the client that we have... It's all about the client. It's a high-end luxury leather goods company. They make handbags, purses, shoes, that type of thing. Every time you make any purchase whatsoever in one of their retail outlets, a handwritten note goes out from our service. But it's signed by the store clerk that you worked with or it has their name and their phone number at the bottom of the note. So, we automated what this perfumery didn't, basically. We tied it to the end. But short answer your question is I still think there's a huge opportunity here. Quite frankly, people are very lonely right now. Any handwritten mail I think will get savored and opened and really showing that-Stephanie:They need a good handwritten note.David:They really do.Stephanie:Now's the timeDavid:Yeah, people have the time for it. I think at an abstract level, so two things. One, maybe they might not believe it's actually handwritten if they start getting thousands of these a day or something, which will never happen. But they might say, "Oh, gee, this is not actually handwritten." But that doesn't stop people when they get their Christmas card from the president, depending on what election year it is. But if they get their Christmas card from the president, they probably realize the president didn't sit down and sign a Christmas card to them. But it almost doesn't matter. It's the thought that counts and there is that they went above and beyond just laser printing a note. They figured out a way to send me something that seems really personal.Stephanie:So, I wanted to circle back to what we were talking about earlier about investors and how you were self-funded for the last six years. I want to hear a little bit about why you're thinking about bringing on investors now and what that thought process is like.David:So, this really has more to do with David Wachs than Handwrytten. So, this is my second venture. My first company, that text messaging company, also was self-funded. I built that up and I was able to sell that off and do pretty well. That was a true startup. There were a lot of nights where it was just me in an empty room with a two-liter diet Mountain Dew sitting by my side as I program.Stephanie:Nice, healthy.David:Classic, stereotypical startup image, I lived that. But that company actually took off a lot faster than Handwrytten. This time, I decided, "Okay, well, I'm just going to invest my own money, I'm going to build it up." I never really considered venture until this year when we got on the Inc 500. The problem is or the problem I see is we're in a bit of a doughnut hole. Had we gone for venture early on, we would have been great, because then we would have had an idea and no track record. We would have built up this company.David:We would have taken up an S ton of cash, garbage truck cash. We would have invested all of this advertising and built it up really fast. But instead of doing that, I grew profitably and organically, I reinvested profits back into the company, so our growth trajectory is much slower. Because of that, now venture capitalists don't even really want to talk to us. Oh, you've only grown at this rate, not 50 times. I'm like, "Well, yeah, because I've grown smartly and profitably."Stephanie:That seems to be a focus, the tides are turning a bit. I mean, there was, for a long time, just grow as quick as you can, we'll give you a bunch of money. You don't even have to figure out the business model. Do you even have a business? If you want to pivot halfway through spending all the money, it's fine, but I am starting to see a shift now, where, yeah, they're looking for companies actually grow sustainably, at least some VC firms around here. So, I don't know if you experienced that yet.David:Honestly, I've been so busy. So, we entertained a few VC phone calls. They were very, very nice people and very, very big firms. They basically said, "Oh, well, you haven't grown enough this year." I said, "Well, COVID has been going on. So, there's that." Because not a lot of our clients were retailers, so we lost that business, etc. So, to answer your question, part of it was I've actually worked in VC. I've worked for two different VC firms, but I've never taken VC.David:I thought it would be good for me personally to go through that experience of receiving VC, having somebody else to report to from a funding perspective. And then potentially down the road, really working for a VC firm as a partner or something like that. I thought that would be my next transition, because this is company number two. I don't see myself going through this process again. So, that was the thought process of, "Well, if I take VC now, we could really blow this up, because I've got a well-oiled machine here that just needs money to scale, that needs to scale advertising."David:The technology is pretty much done, although we're doing some really innovative stuff in machine vision, machine learning, which I can talk about. The idea was, "I haven't done it before. Let me give this a go, if anybody's interested." I had a handful of conversations, they all went the same way. I'm short on time these days. So, I was just like, "Well, let me get back to the grindstone and maybe worry about that later."Stephanie:Got it. Cool. Yeah, thanks for answering that. I was wondering where you left off with that. All right. So, we only have 10 minutes left. So, I was going to shift over to the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, David?David:I will do my best.Stephanie:All right. That's all I ask for. What one thing will have the biggest impact on ecommerce in the next year?David:Personalization. Whether it's a handwritten note or an experience that's personalized when you visit a website or anything else, I think standing out through personalization, there's been study after study by companies like Segment that say that's a huge opportunity.Stephanie:Do you name your robots?David:No, we name our handwriting. The robots are numbered. So, it's 1 through whatever, 95 right now. We used to have an animated robot, and he still is on our website. If you buy a card, you'll see this little animated robot at the end. His name is Pinbot 2000, because when I was growing up, things that ended in 2000 sounded very futuristic even though [crosstalk 00:44:47].Stephanie:Yeah.David:His name is Pinbot 2000.Stephanie:I like it. What's your favorite handwriting?David:I like Tenacious Nick. If you visit our website, it's a very sweeping block print.Stephanie:[inaudible] check it out. What's up next on your reading list?David:It's funny. I've got a bunch of books here. This one is by the head of sales for HubSpot, Mark Roberge? I hope I'm pronouncing that right. It's called the Sales Acceleration Formula. It was recommended to me. So, I figured I'd read it tomorrow when I have to fly to Chicago.Stephanie:Very cool. What's up next on your Netflix queue?David:My brother actually is a bigwig at Netflix, but what I'm watching right now is on Amazon. It's The Boys. I'm trying to finish season two.Stephanie:Oh, is it good?David:Yeah. It's a dark superhero tale. The one I liked on Netflix... It was 40 minutes and was great. I think it's called Cubers. It's great. If you don't care about Rubik's Cubes at all, which I really don't, it was still wonderful. It's the story of two Rubik's Cube masters. One of them is autistic, and the other Rubik's Cube master, who is just a really nice guy in Australia. The friendship that evolves through these two Rubik's Cube masters. That's really good.Stephanie:That's interesting. If you were to have a podcast, what would the podcast be about and who would your first guest be?David:That is a great-Stephanie:It can't be about handwritten notes.David:No, no, I think it would be about one-to-one marketing though, which is very much in the same vein and probably a sucker answer that I'm giving you. But it would be how do you market to people on a personal level that doesn't come across as junk, because everything's looking like junk?Stephanie:Yup, I like that.David:That would be what it is, and I apologize in advance for that answer.Stephanie:No, I like that one. I mean, I think it's much needed now. Who would you bring on as a guest?David:Joe Polish, who's a marketing expert. He's quite good. Dean Jackson who he works with would be a good guest for that. There's probably somebody from Segment as they have a lot of data that backs it up. So, I'd want to talk with them.Stephanie:Cool. All right. And then the last one, since you've started a company before and you've sold it and started another one, what piece of advice would you give to a new entrepreneur who's starting up a new commerce company?David:Commerce or not, the one piece of advice that I give to everybody was told to me in person over dinner. So, this is a little bit of a humble brag by Conan O'Brien. So, when I was in college, I used to be in this group that would bring speakers to campus and we brought Conan O'Brien. So, the guys that organized got to sit down and do dinner with him. This is a long time ago. So, he was relatively starting out on having his own talk show back then.David:But the advice he gave us was, "Always get in over your head." That has stuck with me for 20 some odd years now, always get in over your head. I mean, people give you advice every day, but how much of it sticks for 20 years. The way I interpret that is if you don't get in over your head, you're never going to grow. You're just never going to pull yourself out of your comfort zone and really do something bigger than you thought you could do. So, I think about it all the time.Stephanie:I like it. Okay, Conan, coming in with some good wise words, pretty good. All right, David. Well, thanks so much for coming on the show. Where can people find out more about you and Handwrytten with a Y?David:Handwrytten with Y, so you can visit Handwrytten with a Y, H-A-N-D-W-R-Y-T-T-E-N.com. We have @handwrytten on Twitter, Handwrytten on Facebook. Personally, I'm @DavidB, as in boy, Wachs, W-A-C-H-S on Twitter. You can find me there, although I don't tweet very much. If anybody wants to try the service, there's two things I'd say. If you go to the business page, you can actually request a samples kit for free. That samples kit will have all sorts of different handwriting styles for you, including Tenacious Nick, my favorite, but they're all good.David:The other thing is if you sign up and you sign up with an email and password, you can enter a discount code. Enter discount code 'podcast', and you'll get $5 in credit that you can then use to send yourself a card or somebody else's card or send your first card, whatever. So, that's available for you too.Stephanie:Awesome. All right. Well, thanks so much, David. It's been fun. We will have to have you back in the future once you can see more about your subscription service and all that. So, thanks for coming on.David:Awesome. Thanks, Stephanie.

Engineering Influence from ACEC
A Conversation with Autodesk at the Moving America Forward Forum in Las Vegas

Engineering Influence from ACEC

Play Episode Listen Later Feb 19, 2020 7:48


Engineering Influence sat down with David Ohrenstein and Theo Angelopolous from Autodesk at the Moving America Forward presidential forum on infrastructure in Las Vegas.Transcript:Host: Welcome to another edition of Engineering Influence on the road - we are coming to you from Las Vegas right before the first ever, single issue focused presidential candidate forum on infrastructure being put together by United for Infrastructure and also hosted by some of our corporate friends, including Autodesk who I'm joined with today. I'm joined by David Ohrenstein, Director of government affairs and Theo Angelopolous. He is the Senior Director of Infrastructure Programs. I'm very, very pleased to have you join us today. Autodesk is something, the services that you provide, the digital technology, is something that our industry uses on a daily basis. I want to get your thoughts on why this forum is important, number one. And number two, from your position in the marketplace, what do you want our elected leaders to do? What could Congress do? What should the industry do to really move forward on the integration of digital technologies with engineering and the construction and design of infrastructure?David: Sure. I'll start - I'm David Ohrenstein. First of all, we're really excited to be at this event and we think it's great that this is a big national conversation going on about how to have ambitious plans to build out America's infrastructure as a, as a technology provider to companies that design and construct infrastructure. We know the big challenge that the country faces in meeting its infrastructure needs and we think that technology can play a key role in meeting those needs. We work with big firms, with small firms, some are more advanced in the use of technology. Others have a way to go. And we think that any big infrastructure proposal by the candidates, by the administration, by Congress, all of them ought to have incentives to improve this use of technology.Host: And Theo, from your perspective as a senior director in infrastructure what's your take?Theo: Yeah. So I mean, I think, you know we all talk about the trillion dollar global infrastructure gap and we talk about the aging infrastructure in the U.S.. What's interesting is when you look at that gap, world economic forum is projecting that gap to get bigger every year for the next 20 years. And more than half that gaps actually in the U S and primarily in roads and highways. So, you know, I think we know that we have to do more, you know, better with less. And I think there's a couple of things we'd like to see happen. One is obviously we want to see the faster adoption of digital technology in design and construction. And then, you know, like David said, we'd like to see the government be more progressive and incentivizing, you know, their supply chain to go digital. And I think if you look at governments like the UK and governments in the Nordics, they've done that. So I think it's a really good opportunity for the U.S. to really go faster and, and be a leader in the area of digital technology for infrastructure.Host: And before we went on you mentioned the fact that there's been a greater adoption of digital technologies in countries in Western Europe and are there any good examples? I mean, is there any one country, I mean, you mentioned a couple, but anyone who has really done it well, that could actually be a good I don't know - example for the U S for policymakers to follow in the way that they embrace digital technologies with infrastructure projects?Theo: I mean, the one that really stands out for us is really the UK. I mean the UK has basically, you know, mandated that all projects over a certain threshold are delivered in building information modeling and they've actually adopted certain compliance and regulatory requirements on those projects. So I think, you know, I think there's definitely the standout right now. David, I don't know if you have anything to add.David: Yeah, the UK is, in addition to having these policies, they have a real, like national construction strategy. So they really see this as a key industry to support both. In building in within the country, but also as you know, as an industry that can, they can export these services around the world. So they have, they're a great example of having a comprehensive national construction strategy.Host: And David, from your perspective in government affairs, I'm a former T&I staffer. I kind of know that there's some, not everyone is current on exactly all the technologies that are out there, especially when it comes to infrastructure design. There may be a habit of looking backwards instead of forward. How should, Members of Congress, what would you, what would you advise T&I members for example, to do, to become more knowledgeable and more open to the idea of, you know you have, you've got digital twins, you've got all these different technologies that are out there to, to learn more about them and take advantage of them?David: Well, you know, the, the past surface transportation bills have had some incentives for using digital modeling,Host: Minor minor technology titles in the bills.David: And the current Senate EPW bill that also a technology section to it. So we think those sections ought to be a robust part of any package. And not just around the design but also using digital technologies and construction. That's going to be a key, key piece of it. So you know, we want, we want the overall plans to be ambitious, but one of the things we're focusing on is making sure that the technology piece of these plans is robust. And as I mentioned you know, things like autonomous vehicles and broadband, smart cities, those are all important and those get a lot of attention. But also using more technology and how you design and construct infrastructure. I think that has sometimes not been as you know, upfront as part of the conversation we'd like to, for policymakers to be thinking about that too.Host: And then finally, for the forum in general we're going to have a couple of presidential candidates come up and talk about infrastructure. What do you hope to hear, what would make your day from any of the candidates today? You know, on the issue.David: They all have ambitious plans and we think that's great. What we'd like to hear is a little bit more detail, again about technology, how technology can play a bigger role. Because if we're going meet as, as Theo was saying, if we're going to try to build more infrastructure, built better infrastructure with, you know limited resources, then technology is key to that. And we'd like to hear them get a little bit more granular about about how to promote technology as a key part of these proposals.Theo: No, I mean, I agree. I think the devil's in the details always of course. But I think, you know, for me what I would like to hear is definitely the how, you know, I think we all can align on both sides of the aisle around the value of investing in infrastructure. And really the challenge is how do we do it? And that for me, that's kind of the key takeaway that I'd like to understand from each of the candidates.Host: Hopefully we hear that and we've got a long time until November. But our members - the engineering industry is going to be very interested throughout. So hopefully it's a good forum and, and, and successful one. And I really appreciate you both coming on our podcast. You have an open invitation anytime you want to when anything comes up, our members of course are very interested in the services and products that Autodesk provides the industry. So if you have news or information, please consider us as a, as a place to come. And I want to thank you both for being on the show.Theo: Great. Thank you. Thanks for having us. 

Marketing The Invisible
Boost Your Sales Performance – In Just 7 Minutes with David Dulany

Marketing The Invisible

Play Episode Listen Later Feb 17, 2020 8:21


 Understand how to make better Sales Development decisions for your company Learn why it is important that you have the right team for your sales development strategy Figure out what to change in your sales process to boost your companies sales performance Resources/Links: Subscribe to Ten Bound Newsletter to Get Insights on Sales Development: Visit https://tenbound.com/ Summary Finding new people to buy your product or service is an important part of the entire sales process. It is tough, Finding clients to buy your product or service is an important part of the entire sales process. And we know it is tough, right? As a small business owner, boosting your sales performance is crucial to your growth and success. And many mall business owners wonder if there is something specific they can do to raise their closing rate and boost their sales performance. David Dulany is a Sales Development Program Building Specialist with deep experience building highly successful programs from scratch for technology companies. In this episode, David shares his ability to effectively blueprint the entire sales function and the strategies a business owner can implement to boost and grow their sales performance. Check out these episode highlights: 01:16 – David's ideal client: "We work with mostly software companies, and they must have a sales development team. So, if they don't have a sales development team, not much that we can help them with." 01:34 – Problem David helps solve: Most companies that are running a sales team these days have spun up a sales development program, but they really find it hard to implement and put together. And so, if they're struggling with it, if they're trying to map it out, if they're trying to figure out how to improve it, they come to us and we've got that expertise to be able to help them. 02:29 – Typical symptoms that clients do before reaching out to David: They'll hire people, they'll spend all the money, they'll put them on the phone and give them all the tools etc. And then they quit, you know, six to 12 months into it. So, a huge expense, and it's something that we see a lot of with people that are struggling with their self-development program. 03:27 – What are some of the common mistakes that folks make before finding David and his solution?: "They hire a very junior level person, they give him a list, they give him a few tools, they give him a list of phone numbers, and they just tell them to go after it." 05:55 – David's Valuable Free Action(VFA): You can look at the people. Do you have the right people on your team? Are they skilled up? Are they trained? Do you have the right processes? Have you thought about how everything flows together? Do you have the right technology? If you don't have the right tools, and you're not equipping the team correctly, you're really, really behind the eight ball. 07:1 – David's Valuable Free Action(VFR): Subscribe to Ten Bound Newsletter to Get Insights on Sales Development: Visit https://tenbound.com/ 07:37 – Q: How do you know if sales development is right for your organization? A: Sales development is not just a cookie-cutter for every company. You got to make sure that it's right for your organization. Ask yourself the question, 'Is sales development right for your organization?' first. Tweetable Takeaways from this Episode: “Sales development is not just a cookie-cutter for every company. You got to make sure that it's right for your organization. Ask yourself the question,

Marketing The Invisible
Boost Your Sales Performance – In Just 7 Minutes with David Dulany

Marketing The Invisible

Play Episode Listen Later Feb 17, 2020 8:21


 Understand how to make better Sales Development decisions for your company Learn why it is important that you have the right team for your sales development strategy Figure out what to change in your sales process to boost your companies sales performance Resources/Links: Subscribe to Ten Bound Newsletter to Get Insights on Sales Development: Visit https://tenbound.com/ Summary Finding new people to buy your product or service is an important part of the entire sales process. It is tough, Finding clients to buy your product or service is an important part of the entire sales process. And we know it is tough, right? As a small business owner, boosting your sales performance is crucial to your growth and success. And many mall business owners wonder if there is something specific they can do to raise their closing rate and boost their sales performance. David Dulany is a Sales Development Program Building Specialist with deep experience building highly successful programs from scratch for technology companies. In this episode, David shares his ability to effectively blueprint the entire sales function and the strategies a business owner can implement to boost and grow their sales performance. Check out these episode highlights: 01:16 – David's ideal client: "We work with mostly software companies, and they must have a sales development team. So, if they don't have a sales development team, not much that we can help them with." 01:34 – Problem David helps solve: Most companies that are running a sales team these days have spun up a sales development program, but they really find it hard to implement and put together. And so, if they're struggling with it, if they're trying to map it out, if they're trying to figure out how to improve it, they come to us and we've got that expertise to be able to help them. 02:29 – Typical symptoms that clients do before reaching out to David: They'll hire people, they'll spend all the money, they'll put them on the phone and give them all the tools etc. And then they quit, you know, six to 12 months into it. So, a huge expense, and it's something that we see a lot of with people that are struggling with their self-development program. 03:27 – What are some of the common mistakes that folks make before finding David and his solution?: "They hire a very junior level person, they give him a list, they give him a few tools, they give him a list of phone numbers, and they just tell them to go after it." 05:55 – David's Valuable Free Action(VFA): You can look at the people. Do you have the right people on your team? Are they skilled up? Are they trained? Do you have the right processes? Have you thought about how everything flows together? Do you have the right technology? If you don't have the right tools, and you're not equipping the team correctly, you're really, really behind the eight ball. 07:1 – David's Valuable Free Action(VFR): Subscribe to Ten Bound Newsletter to Get Insights on Sales Development: Visit https://tenbound.com/ 07:37 – Q: How do you know if sales development is right for your organization? A: Sales development is not just a cookie-cutter for every company. You got to make sure that it's right for your organization. Ask yourself the question, 'Is sales development right for your organization?' first. Tweetable Takeaways from this Episode: “Sales development is not just a cookie-cutter for every company. You got to make sure that it's right for your organization. Ask yourself the question, 'Is sales development right for your organization?' first.”-David Dulany @tenboundClick To Tweet Transcript (Note, this was transcribed using a transcription software and may not reflect the exact words used in the podcast) Tom Poland: 0:09 Hello everyone, a very warm welcome to another edition of Marketing The Invi...

Solved by Science
Solved by Science #5: Why don’t microwave meals fill you up?

Solved by Science

Play Episode Listen Later Nov 18, 2019 9:40


Episode Notes Sophia and David talk about microwave meals, intermittent fasting and the best stir fry order at Plex East. Content warning: mentions of calorie counting. We recommend talking with a doctor before making any major changes to your diet. Sophia: Hello, hello, and welcome to Solved by Science, the show where we answer all the questions that keep you up at night. I'm your host, Sophia, and today I have my friend David with me. David: Hi, I'm David. I am a sophomore studying journalism at Northwestern. I'm an assistant managing editor for North by Northwestern with Sophia, and I'm very excited to have some questions answered. We also co-host another podcast together. It's called Second GenerAsian. It's really cool. You should check it out. Sophia: It's really great. Listen to us, and also our friend HJY. Anyway, so I'm here to answer one of David's questions. David: Freshman year, I would eat a lot of microwave meals because you know, I was lazy. I didn't really want to leave the dorm. One thing I noticed is microwave meals and other very cheap food items never really filled me up. I would eat a lot, and it would just feel like my stomach was still empty. I don't know much about how food or science or anything works, but to me, it's like if I'm eating calories, shouldn’t I have the same amount of energy from those calories? I mean, obviously, like you're not getting nutrients, which I might have just answered my own question there. But yeah, I was wondering why don't microwave meals fill me up? Sophia: Well, we can talk about that more. You did touch a little bit on it. So we can talk about some empty calories and sugars versus complex carbs, that kind of thing. But first, I'm going to talk a little bit about hunger. So, when you feel hungry, that's usually when your blood sugar and insulin levels are dropping. And then that releases ghrelin, which signals hunger. You feel full when you eat, and then your fat cells release leptin to let your body know that you're feeling full. And a lot of this communication happens with the hypothalamus, which is a structure in your brain, and it plays a big role in releasing hormones. Back to your question, why don't microwave meals – or ramen, I guess – fill you up? I'm more of a ramen fan than the microwave meal. David: Yeah, I mean, they're all in the same wider category to me. Sophia: They're all the same college student is too lazy David: Yeah, exactly. Sophia: Only has a microwave in their sad CRC dorm room. David: Right. Sophia: Let's start by talking about empty calories. You mentioned that you weren't getting any nutrients. So a lot of these foods, like microwave meals, don't have too much nutritional value, at least the ones I'm eating. I was eating a lot of ramen and mac and cheese last year. What were you eating? David: Literally the same thing. Sophia: Yeah, some things like, I don't know, Trader Joe’s, might have a little bit more. David: Doubtful, honestly. Sophia: But Kraft Mac and Cheese, not it. So these don't have any nutritional value or vitamins, and they're usually full of fat and sugar. So none of that is really great for you. And there's also a difference between sugar and simple carbs versus complex carbs. So simple sugars don't take a lot of time to digest. So things like ramen, mac and cheese. I know you were eating other microwave meals from H Mart. David: Yeah, I would eat a lot of the Korean like porridge type meals like congee. It was all very similar to me, like in terms of how I would feel afterwards. It's just like not great. Sophia: So they don't take a ton of time to digest. So what happens is your glucose levels rise super fast, and then when you crash, it makes you feel irritable. So you should eat other things that keep you full for longer because it slows down the absorption of glucose into your bloodstream. So things that keep you full longer: fiber, I'm sure you've heard that before. David: Yes. Sophia: And then things like ramen or mac and cheese have a ton of sodium in them. And your body retains more water when you're eating a lot of salty things, and you feel bloated. So that might also be part of why you feel really gross afterwards. David: Right. Yeah, I mean, after I would eat like a microwave meal, or you know, some kind of cheap, quick meal that I don't have to leave the dorm for, I felt so bad that it's like I might as well have just left the dorm and gone to a dining hall and gotten real food. Sophia: See when I eat microwave meals or ramen, what I usually do is like if I do it for dinner, I'll bring back veggies from the salad bar, so I feel less bad about it. David: Yeah, to me, that defeats the purpose. You know, it's if I'm already there. If I'm going to bring home like veggies, or ingredients to supplement a microwave meal, I might as well just bring home leftover food and eat that. Sophia: That's true, but sometimes you just want some ramen. David: It's like a snack to me. It's not like food food. Sophia: Anyway, something else I'm interested in with you and food is intermittent fasting. David: So over the summer, I started intermittent fasting because I was on a pretty busy schedule, and I didn't have time to eat breakfast. And so basically, I would not eat before noon. And so once I got back from a study abroad program, I still kept it up because I found myself not getting hungry before 12 as long as I kept up the fast. If I kept it up for a couple of weeks, eventually I’d get to a point where I literally just don't get hungry at a certain point. I only eat between 12 and 8pm. The only time I find myself getting getting hungry is if I like break the fast or I kind of have a cheat day, then I'll get more hungry the next day. My logic behind it is that if I'm not hungry, or like my body doesn't tell me that I need food, what's the point of eating? Sophia: Are you doing it to like lose weight or be healthier or... David: Yeah Sophia: Was it just a you realized you didn't get hungry type of thing? David: A lot of it was weight loss. I've just heard it's good for you. I'm eating like plenty of food. It's not like I'm starving myself. I haven't gotten out of shape, really, at least not the way that I did last year, freshman year when I would just gorge myself all the time. I'm being a lot more reasonable about the food that I eat. Because I think intermittent fasting and only eating two meals a day kind of gives me a lot more flexibility within those meals. I can eat whatever I want. Sophia: So I know at the beginning of the year, you were also calorie counting a little bit. Did you notice that you were eating less calories because you're eating two meals or are you eating more during those meals? David: I think it's just like it's easier for me to hit my target, which I mean, I still kind of do, I just I'm not as diligent about tracking it. I found that the meals that I would be eating anyway are just the right size to get me to my calorie target. If I eat them twice a day, obviously like the thing that I've been eating a lot of lately is Plex East stir fry, which is about 900 calories and if my targets 1800 calories that I just need that twice a day and I'm right on target. That's very convenient portion size wise. Sophia: Do you usually go to Plex twice a day? Because I’m always at Allison. I do want to get stir fry sometime. David: You should. Sophia: So let's do that. David: I got literally get Plex stir fry twice a day. Sophia: What's your recommendation for Plex stir fry? David: They just added sweet chili sauce, and it slaps. It's so good. My go-to at the start of the quarter was chicken and brown rice. Lately, I've been getting like pork and noodles. You gotta like be a bit creative with the sauces, because they have the sweet chili sauce. But if you had a little bit of the soy sauce or like the Szechuan sauce, it's pretty good. You can have some versatility. You know, I put a lot of scallions, a lot of onions, a little bit of bell peppers. Gotta heap the garlic on because I'm Filipino. We love garlic. With that, it's just because it's pre-portioned, I don't get out of control with getting too much food because I feel like I have bad impulse control. Sophia: I should probably start doing that because I also have bad impulse control. So you said that part of the reason you were intermittent fasting was to lose weight. So that's a big reason why people do that. And the reason why I asked about your calorie counting is that one thing that it does is that just because you're restricting your eating hours, you are cutting calories by eating less of the time. Or at least some people do that. Some people might just end up eating the same amount in a smaller period of time. What you're doing is called a restricted eating window. This is where you have a limited time where you can eat, you might eat just one meal a day or two or three times. You're doing eight hours. I think that's pretty common for intermittent fasting. David: It’s a pretty standard starting point. Sometimes I won't eat exactly at 12, like I’ll eat at one or two, and I won't eat at 8, I'll eat at 6 or 7. So it sometimes does get restricted tighter than that. Sophia: And the other type of intermittent fasting is called alternate day fasting. So some days you would eat more and some days you would eat less. So this is also called calorie cycling. And you can fast every other day, two days a week, stuff like that. Kind of whatever works for you. I feel like intermittent fasting is pretty flexible and depends on the person. So another reason why this might promote weight loss is because it reduces your insulin levels and your fat cells are also burning more, and I think that's also the premise of the keto diet, but I don't really know much about the keto diet. David: Keto is just like very high fat, very, very low carb, medium protein. It's good in theory, it's just I couldn't do that, because I think with the options available at dining halls, it's not super conducive to maintain keto on a dining plan. I feel like calorie counting is probably your best bet; you can eat a lot of different things within your window of calories. It's just as long as you don't overeat. Sophia: Intermittent fasting might also increase the hormone norepinephrine, which boosts your metabolism. So more calories burn, and I need to start burning calories because I don't exercise here. David: I tried to do that. But you know, we all get lazy as time goes on. Sophia: So don't intermittent fast if you have conditions like diabetes, if you're pregnant, if you have an eating disorder. I feel like I say this every episode: I'm not a doctor. Don't ask me for medical advice. If you're trying a new diet, maybe talk to a medical professional. So there you have it. Some stuff about food, my favorite topic in the world and intermittent fasting. Do it safely. Talk to a doctor. So that wraps it up for today. If you want more information, check out the transcript down below for sources and other fun links and subscribe to this podcast for more Weird Science things, our intro and our true music is Eve by Dee Yan-Key which we use under Creative Commons Attribution license. I'm Sophia. David: I'm David. Sophia: Thanks so much for listening. This is NBN audio. David: I want to emphasize I'm not starving myself. You should’ve seen me at all-you-can-eat KBBQ last Saturday. Holy shit. I was going at it. Find out more at https://solved-by-science.pinecast.co This podcast is powered by Pinecast.

英语每日一听 | 每天少于5分钟

更多英语知识,请关注微信公众号:VOA英语每日一听Shirley: Hi, David. How are you?David: I'm fine, thank you, Shirley.Shirley: So, environmental issues ... we were talking about them earlier throughout the world, and you're from Kenya.David: Yes, I'm from Kenya.Shirley: So, what's happening over there?David: One of the environmental issues we are having is deforestation, which is really affecting both the wild animals and people living around the forest and, you know, the environment in general.Shirley: So, what's actually happening to the people that ... for example the people who actually live around the forest area?David: Cause you know, when you tend to interfere and come in between the wild animal's habitat and things like that, you somehow create like an imbalance in between the people and the animals and sometimes it's not a really nice thing cause animals tend to come close to where people live instead of living in their own habitat, which is a really bad thing.Shirley: So, are they like attacking people .... or?David: They really don't attack but it's not a really nice picture or scene to know that you're vulnerable at any time.Shirley: What about livestock of the people that are close to forest areas?David: You know, that's one of the things that are in danger cause, you know, if wild animals come to where people live, and they have livestock, probably they'll want to be eaten.Shirley: So, what's actually causing the deforestation?David: People are trying to burn charcoal, so that they can get, they're trying to burn the trees so that they can get charcoal and sell cause as you know everyone is not living to the living standard that they're supposed to be living, and they're trying in every way to earn an extra dime to support their families, so they turn to deforestation and the cutting down of trees, and this has been one of the major causes of deforestation cause when you're trying to get charcoal and sell, you have to cut a tree and that results to deforestation and other causes that come along with deforestation and like soil erosion: things like that.Shirley: So what's being done to try and remedy this, or to try and counterbalance the effect?David: The activist groups that are coming together like ... you all know the Nobel Prize winner Wangari Maathai.Shirley: Yes.David: She has her own green belt movement in Kenya. She's been for so long trying to discourage people and educate people in what deforestation does to the country and how it affects people and the environment in general.

英语每日一听 | 每天少于5分钟

更多英语知识,请关注微信公众号:VOA英语每日一听Shirley: Hi, David. How are you?David: I'm fine, thank you, Shirley.Shirley: So, environmental issues ... we were talking about them earlier throughout the world, and you're from Kenya.David: Yes, I'm from Kenya.Shirley: So, what's happening over there?David: One of the environmental issues we are having is deforestation, which is really affecting both the wild animals and people living around the forest and, you know, the environment in general.Shirley: So, what's actually happening to the people that ... for example the people who actually live around the forest area?David: Cause you know, when you tend to interfere and come in between the wild animal's habitat and things like that, you somehow create like an imbalance in between the people and the animals and sometimes it's not a really nice thing cause animals tend to come close to where people live instead of living in their own habitat, which is a really bad thing.Shirley: So, are they like attacking people .... or?David: They really don't attack but it's not a really nice picture or scene to know that you're vulnerable at any time.Shirley: What about livestock of the people that are close to forest areas?David: You know, that's one of the things that are in danger cause, you know, if wild animals come to where people live, and they have livestock, probably they'll want to be eaten.Shirley: So, what's actually causing the deforestation?David: People are trying to burn charcoal, so that they can get, they're trying to burn the trees so that they can get charcoal and sell cause as you know everyone is not living to the living standard that they're supposed to be living, and they're trying in every way to earn an extra dime to support their families, so they turn to deforestation and the cutting down of trees, and this has been one of the major causes of deforestation cause when you're trying to get charcoal and sell, you have to cut a tree and that results to deforestation and other causes that come along with deforestation and like soil erosion: things like that.Shirley: So what's being done to try and remedy this, or to try and counterbalance the effect?David: The activist groups that are coming together like ... you all know the Nobel Prize winner Wangari Maathai.Shirley: Yes.David: She has her own green belt movement in Kenya. She's been for so long trying to discourage people and educate people in what deforestation does to the country and how it affects people and the environment in general.

FVC Sermons
Three Hearts

FVC Sermons

Play Episode Listen Later Jul 14, 2019 42:17


https://youtu.be/nqY19QacC0c 1 sam 23:19-29 Title of Sermon- Three Hearts The heart of  A Ziphite-The Ziphites were descendants of Judah, just like David. They were supposed to be his brothers They were King Saul's spies and they alerted Saul every time David took refuge in their land. Three things characterize a ZIPHITE. One- A Ziphite betrays his own tribe (they were of the tribe of Judah)The Ziphites were of the tribe of Judah- but when the chips were down- they turned on David and took up with Saul- and were willing to sell out DavidREAD- V 19-20 and our part shall be to deliver him into the king's hand.Why were they even involved? They had no beef with David- They just wanted the adoration of Saul- They wanted to be a part of his plan and his power to destroy David- No love for TruthProverbs 16:28 A perverse man sows strife, And a whisperer separates the best of friends.This spirit is so prevalent in the world and church today- people love to create problemsTwo- A Ziphite is selfish at the expense of others Selfishness is the heart of the ziphite- Turning on others for their own benefit-  24 So they arose and went to Ziph before Saul.- No care who was hurt- self serving- David is our tribe- but we have much to GAIN from turningNinth Commandment- Exodus 20:16 “You shall not bear false witness against your neighbor.Three- A ziphite Cares nothing about God or his plansEven tho the ziphites were of Judah- they were not of YHWH- Who turns on David? What had David done? No seeking after God- to see what the heart of God was for the matter- What does it mean to you?Do you have a heart of Ziphite? Do you sow discord and betray your own tribe? Self serving?READ Proverbs 6:16-19 And sows discord among the brethrenThis is a very subtle approach of the Devil to split relationships and churches and familiesPersonally frustrated people either fix their issues or use hatred of others as a diversion to their problems- its easier to destroy others than face the realities of your brokennessThey unify in their disdain for others, form alliances to hide from their sinful heartIf that's your heart- you need to change- you're hurting yourself, others and God's peopleRomans 16:17 Now I urge you, brethren, note those who cause divisions and offenses, contrary to the doctrine which you learned, and avoid them. These are the people described in  Romans 2:8 but to those who are self-seeking and do not obey the truth, but obey unrighteousness—indignation and wrath,Heart check time- Am I unifier or divider? Do I love and gather or do I hate and disperse? What do I talk about and whom do I talk about? Talk about yourself! Talk about Your Sins! I get it- Families raised this way- hard to break- Infighting, despair, alliances- Not in Church!It's the spirit of the Ziphite? Why destroy your own tribe? Defend them! (Man with wife in door) The heart of Saul As if the heart of the Ziphite was enough- the heart of Saul was even WORSE than the Ziphites- The Ziphites are the antagonist in this story- against David- But SAUL says they are of GOD1 Sam 23:21 And Saul said, “Blessed are you of the Lord, for you have compassion on me. 22 Please go and find out for sure, and see the place where his hideout is, and who has seen him there. For I am told he is very crafty.WHAT? How do you go from King of Israel to now looking at others sins and saying “you are blessed of God”- What level of spiritual depravity would you be at to now be praising evil?Wouldn't it be interesting if we lived in a time where Kings celebrated pride of Sin in streets?Isaiah 5:20  Woe to those who call evil good, and good evil; Who put darkness for light, and light for darkness; Who put bitter for sweet, and sweet for bitter!This is not of God! The people of God- even more a King should NEVER celebrate EVIL EVER-Pro 17:15 He who justifies the wicked, and he who condemns the just, Both of them alike are an abomination to the Lord.

FVC Sermon Podcast
Three Hearts

FVC Sermon Podcast

Play Episode Listen Later Jul 14, 2019 42:17


https://youtu.be/nqY19QacC0c 1 sam 23:19-29 Title of Sermon- Three Hearts The heart of  A Ziphite-The Ziphites were descendants of Judah, just like David. They were supposed to be his brothers They were King Saul’s spies and they alerted Saul every time David took refuge in their land. Three things characterize a ZIPHITE. One- A Ziphite betrays his own tribe (they were of the tribe of Judah)The Ziphites were of the tribe of Judah- but when the chips were down- they turned on David and took up with Saul- and were willing to sell out DavidREAD- V 19-20 and our part shall be to deliver him into the king’s hand.Why were they even involved? They had no beef with David- They just wanted the adoration of Saul- They wanted to be a part of his plan and his power to destroy David- No love for TruthProverbs 16:28 A perverse man sows strife, And a whisperer separates the best of friends.This spirit is so prevalent in the world and church today- people love to create problemsTwo- A Ziphite is selfish at the expense of others Selfishness is the heart of the ziphite- Turning on others for their own benefit-  24 So they arose and went to Ziph before Saul.- No care who was hurt- self serving- David is our tribe- but we have much to GAIN from turningNinth Commandment- Exodus 20:16 “You shall not bear false witness against your neighbor.Three- A ziphite Cares nothing about God or his plansEven tho the ziphites were of Judah- they were not of YHWH- Who turns on David? What had David done? No seeking after God- to see what the heart of God was for the matter- What does it mean to you?Do you have a heart of Ziphite? Do you sow discord and betray your own tribe? Self serving?READ Proverbs 6:16-19 And sows discord among the brethrenThis is a very subtle approach of the Devil to split relationships and churches and familiesPersonally frustrated people either fix their issues or use hatred of others as a diversion to their problems- its easier to destroy others than face the realities of your brokennessThey unify in their disdain for others, form alliances to hide from their sinful heartIf that’s your heart- you need to change- you’re hurting yourself, others and God’s peopleRomans 16:17 Now I urge you, brethren, note those who cause divisions and offenses, contrary to the doctrine which you learned, and avoid them. These are the people described in  Romans 2:8 but to those who are self-seeking and do not obey the truth, but obey unrighteousness—indignation and wrath,Heart check time- Am I unifier or divider? Do I love and gather or do I hate and disperse? What do I talk about and whom do I talk about? Talk about yourself! Talk about Your Sins! I get it- Families raised this way- hard to break- Infighting, despair, alliances- Not in Church!It’s the spirit of the Ziphite? Why destroy your own tribe? Defend them! (Man with wife in door) The heart of Saul As if the heart of the Ziphite was enough- the heart of Saul was even WORSE than the Ziphites- The Ziphites are the antagonist in this story- against David- But SAUL says they are of GOD1 Sam 23:21 And Saul said, “Blessed are you of the Lord, for you have compassion on me. 22 Please go and find out for sure, and see the place where his hideout is, and who has seen him there. For I am told he is very crafty.WHAT? How do you go from King of Israel to now looking at others sins and saying “you are blessed of God”- What level of spiritual depravity would you be at to now be praising evil?Wouldn’t it be interesting if we lived in a time where Kings celebrated pride of Sin in streets?Isaiah 5:20  Woe to those who call evil good, and good evil; Who put darkness for light, and light for darkness; Who put bitter for sweet, and sweet for bitter!This is not of God! The people of God- even more a King should NEVER celebrate EVIL EVER-Pro 17:15 He who justifies the wicked, and he who condemns the just, Both of them alike are an abomination to the Lord.

2Bobs - with David C. Baker and Blair Enns
A Beginner's Guide to Negotiating

2Bobs - with David C. Baker and Blair Enns

Play Episode Listen Later Feb 13, 2019 35:11


David gets into Blair's head to get his 10 basic negotiating tips that he has worked with clients on over the years.   LINKS “10 Negotiating Tips” (with 5 bonus tips) “Selling in One Lesson,” 2Bobs episode 49 Buying Less for Less: How to avoid the Marketing Procurement dilemma, by Gerry Preece Negotiating with Backbone: Eight Sales Strategies to Defend Your Price and Value, by Reed K. Holden   TRANSCRIPT DAVID C. BAKER: Blair, today we are going to talk about 10 really interesting ways you can get your spouse to go ... Wait, I haven't, quit laughing. I haven't - BLAIR ENNS: I'm out. DAVID: How to get your spouse to go to the place for dinner that you want to go to. BLAIR: Okay. DAVID: How's that? BLAIR: Sure. What kind of trouble could we possibly get into? DAVID: Yeah, that would be a really stupid pod ... No. What we're talking about are some negotiating tips that you've thought about over many years. You've polled, you've tested, you've researched. You've worked with clients on. You've consolidated them into this one place. We may get to some bonus tips. I don't know if we'll have the time, but we definitely want to talk about the 10 basic tips around negotiating. Can you get me inside your head for a minute before I start pulling these out from you one by one? BLAIR: Well it's pretty crowded in there. What is it that you wanted access to? I gave you my password to everything the other day. What else do you want? DAVID: Is this going to be this difficult today? Are we going to do that? Or are we going to be cooperative? BLAIR: I'm feeling a little punchy. DAVID: Yeah, I see. I see you are. BLAIR: I'm in another hotel room. This is day 31 of a 36 day road trip. I tweeted today, "Okay. I've answered the question, how much travel is too much?". DAVID: Yeah. BLAIR: Getting into my head, I think these tips, I considered it kind of a beginner's guide to negotiating. I don't consider myself to be an expert on negotiating. But you can't advise people on the subject of selling and pricing without knowing something about negotiating, so a while ago I took a bunch of the best practices that I've encountered on the subject of negotiating, and kind of put it into one place. That's I think what we're going to talk about today. I'll call it a beginner's guide to negotiating, and we're referencing to these 10 tips that I've published previously. DAVID: Hopefully it will be more than a beginner's guide. But we'll just set people's expectations low. BLAIR: Yeah, right. DAVID: Then we'll exceed them. BLAIR: That's exactly what I was doing. DAVID: There are 10 in here. But there are two of them that we've actually had the chance to talk about in previous episodes. I will reference all 10 of them. But then with two of them I'm going to point people to a previous episode if they want to really bone up on all that stuff. DAVID: The first one is, avoid over-investing. This is one that we have talked about. It was in a recent episode. It was called Selling In One Lesson. The idea is that the more somebody wants it, the more at a disadvantage they are, right? Just summarize that for us and then we'll move on to the number two one. Over-investing is the first one. BLAIR: Yeah, so you can, a good metaphor for negotiating would be a poker game where there's times when you're bluffing, when you're playing certain hands. But in particular the idea of bluffing. Or calling somebody else's bluff. You can apply some of the tips that we'll talk about here. If it's very clear to the client that you want this so bad, and it's clear to the client not just from what you say, but from all of the free work that you have done, all of the costs that you've incurred. If you are clearly over-invested in the sale then you do not have much of a bargaining position. Because you are demonstrating through your behavior that you want it more than the client does. Therefor the client is the one with the power in the relationship. BLAIR: It's a big broad rule. Avoid over-investing in the sale. As you pointed out, we covered this in detail in the podcast, Selling In One Lesson. DAVID: Okay. Even if you do desperately need it, don't act like it. BLAIR: Right. DAVID: Second, and here we want to start diving in in more detail. The second principle for negotiating is, ask the question, "Have we already won?". As I read that, I wasn't sure exactly what you meant. That led me to dive a little bit deeper into this, and I found it really interesting. "Have we already won?". Are you really asking that specific question? Or is it more just framing the negotiating in your head? BLAIR: This is a negotiating point specific to the topic of negotiating with procurement. This comes up a lot, I wrote about this in my book, Pricing Creativity: A Guide To Profit Beyond the Billable Hour. In the last month in the various places I've been, and the talks that I've done, and the training I've done, procurement has come up a lot. Where I'll talk about a principle and somebody says, "Yeah, but you don't understand. That doesn't work with procurement". BLAIR: The role of procurement, and I learned the most from this listening to a talk by a guy named Tom Kinnaird. Tom was head of procurement at WPP. Gerry Preece is another great resource on negotiating with procurement people. Gerry is an ex P&G global design procurement person who has a consulting practice, and he's written a great book on dealing with procurement. It's called Buying Less For Less. I think the subtitle is The Marketing Procurement Problem. BLAIR: When I was listening to Tom Kinnaird, who was former head of procurement at WPP and is now a consultant, he was giving away at a conference in London I was also speaking at, he was giving away some insider procurement tips. One of the tips he gave away was, you need to know that procurement often lies. When procurement shows up at the end of a negotiation, when you feel like you are the ordained firm, you've either won the business or you're in the pole position, and then procurement shows up to negotiate the final deal. In that situation, almost greater than nine out of 10 times, you have won. You've already won, and the concessions that procurement is demanding that you make, it's not mandatory that you make them. BLAIR: Procurement's going to communicate to you that, in order for you to win the business, that it's still a competitive situation, they're still considering other firms. In order for you to win the business you have to cut price. The general rule of thumb is, if procurement shows up late and starts using that language on you, they're lying. I talk about this in my next article. I'm actually quite heated about it in the next article. So far I'm only at the unedited version of it. DAVID: Still very angry. BLAIR: Yeah. It will be published by the time this podcast goes to air. Hopefully it's a little bit more measured. But in it I make the point that procurement is the only profession in the world that I know of where they're taught that it's okay to lie. It's okay to outright lie in the course of everyday business. When they show up late and say, "You need to sharpen your pencil. We've got three bids. You're the highest bidder. You need to get your price to X or you're not getting the business", they're almost always lying. BLAIR: Now when procurement shows up at the beginning and they navigate the entire purchase process, you have another problem. They're not lying. It's an even bigger problem. They're seeing what it is that they're buying as a commodity, so you have to ask yourself, should you be even participating in a process where the client clearly does not value what you do, and it's seen as an expense to be minimized rather than an investment to be made? But the lesson is, so the tip is, ask the question, "Have you already won?". BLAIR: When you're in a situation where it feels like you've won, and then procurement comes in and says, "You haven't won yet. You've got to get past us. You have to give us all of these concessions", don't believe them. In fact I would go further and say, "We have this idea that we've got to throw procurement a bone in a situation like this. We'll give them this one win and then they'll go away". That's not how they work. They're trained to keep asking until you say no, so you want to start with no. BLAIR: We could go deeper into that. We could do a whole podcast on negotiating with procurement. But that's the tip. You ask yourself before you start giving concessions away, ask yourself, "Wait a minute. Have I already won here? Is it really necessary for me to make these concessions?". Because in a lot of situations you have already won, and it is not in your interest to make any concessions whatsoever. DAVID: The main clue is found in when procurement comes. At the beginning or the end. BLAIR: Yes. DAVID: That's the second one, okay. The third tip here takes this further, and it's around the idea that procurement lies regularly. Not just about this one thing that we're talking about that relates to how to decipher the timing and whether you've actually won. BLAIR: Yeah, so it is a recurring theme here. You might think, I always say, "Attack ideas. Don't attack people and organizations". But I always make an exception for procurement. Reid Holden, who's written a couple of great books on pricing and also on negotiating, and he infiltrated the world of procurement. He has this great line, and I repeat it often. "80 percent of procurement people give the other 20 percent a bad name". DAVID: As opposed to 20-80, yeah. You're flipping that around, right? BLAIR: Yeah. In the story I'm writing, I'm writing two different examples of two different agencies pitching two different pieces of business and then having to deal with procurement. One hold their ground and the other one doesn't hold their ground. The example where the agency holds their ground, they're told in the beginning, "The account is a $500,000 a year retainer", and so they do a little pilot project for free. They prove validation. Then they're handed off to procurement and procurement says, "The fees are not $500,000. They're $300,000. Take it or leave it". The firm walked away, and in the end the client came back and said, "Oh, no no. We want you to work with us. You can have the original $500,000". BLAIR: As I was talking to the agency president who was telling me this story, I said to him, "If I were you in that situation. If I'd heard that from the procurement person, I would want to get the client and the procurement person in the room together. I would want to look them both in the eyes and say, 'I want to know which one of you lied to me. You said it was $500,000 in fees. You said it's not $500,000, it's $300,000. One of you lied. Which one was it?'". BLAIR: We know who the liar is. The liar is always procurement, right? Because they're taught that it's okay to lie. But I just imagine, and I'm ranting in this article, and you can feel me getting emotional now. Because I can't believe that we continue to give this egregious behavior a free pass. We need to call out irresponsible practices and outright lies when we hear them from our clients and our clients' procurement department. I hope I've addressed the issue of three procurement lies. I feel like we should probably get off the subject of procurement. DAVID: Well I turned the recorder off a long time ago, and what people are going to hear instead of you ranting is me providing a very reasonable response to all of these things. BLAIR: Instead of my therapy while I lie on your couch. I'm going to a marketing procurement conference in London. I think it's in June. I'm really looking forward to being in the room with these people, and having an open conversation about what I think of their business practices. DAVID: The third point is, beware of procurement lies. Let me just read some of these and then we'll go to the next point. "It's down to you and one other". That's one lie. Another one is, "Yours is the highest bid". Another is, "You have to cut your price to remain in contention", or all these other things that you might hear. BLAIR: Or, "Take it or leave it. There's no negotiating. There's no middle ground. Here's my offer. Take it or leave it". That's another one. DAVID: Right, yeah. Then a concession, you say, is an invitation to ask for more. All right. Let's get you back down to happy land, and we'll move off of procurement. BLAIR: Well we're still going to talk about procurement a little bit here in the next one. Go ahead. DAVID: The fourth point is, outwait the waiter. Outwait the waiter is the fourth point. Talk about that. BLAIR: Yeah. I forget where I heard this idea from first, because I really would like to attribute to the various sources that I've pulled all of these things from. It might be Chris Voss who wrote, "Never split the difference. Negotiate like your life depends on it". Or it might be Jim Camp. Or it might be Tom Kinnaird. I don't remember who. But the idea is, when you're in the final negotiations with people, and again it's almost always procurement. Because it's procurement who's trained in negotiating. That's another point. We really need to be trained in negotiating to counteract those on the client side who are trained in negotiating. BLAIR: One of the tactics that they do is, after you've won, or you think you've won, they slow everything down. Procurement will say, "I'll get back to you in this time period", and then they'll take longer. You'll reach out to them and leave a message, and they'll just kind of stretch things out to make you sweat and to make you more nervous. That's the way they can extract more concessions from you. BLAIR: Again, if you think back to the formula that we talked about in Selling In One Lesson, P equals DB over D. Your power in the sale is a function of your desirability, is your desirability greater than your own desire? Because if it's not, if you're communicating that your desire for the client and the engagement is higher than the client's desire, then you have the least power in the relationship. The tactic when procurement is trying to slow things down to make you sweat is, you slow things down even more. If they take 24 hours to get back to you, you take 48 hours. You communicate to them that, "Yeah, that's fine. We're in no rush. I mean, if this is going to happen it's going to happen. If it isn't, that's fine too". BLAIR: It's almost a game of, and there are times when negotiating really is a game and it really should be fun. It's never fun if you're over-invested in the sale, right? DAVID: Yeah, right. BLAIR: But it should be fun, and you should play this game. Instead of being anxious you just play it out and outwait them. If they delay, you delay longer. If they say they can't speak for 48 hours, you say you can't speak for 96 hours, etc. DAVID: Just multiply by two. BLAIR: Yeah. DAVID: They're saying, "We need to slow this down in some way", and they're expecting you to indicate some investment in the sale. Like minor panic or whatever. Instead you're flipping this around and saying, "Ah, no problem at all. Do you need more time?". BLAIR: Yeah. DAVID: "That's fine. We're not in any hurry, okay". BLAIR: You got it. DAVID: Got it, so that's the fourth point. The fifth point here is to beware the white knight. I don't think we need to talk too much about this one, because in a slightly different context we did talk about this in an episode called How To Drive Your Employees Batshit Crazy. Here we were talking more about management and so on. But the principle is the same. It's this idea that we are going to bring in the big white knight to save the day. Just give us a few sentences on this one. BLAIR: Yeah, the white knight is usually the senior person on your team. There's some negotiating going back and forth. Everything's proceeding, maybe well but slowly. Maybe it doesn't feel like it's proceeding well. But the principle or the senior person swoops in and says, "You know what? I'm going to fix, I'm going to get this deal done in one fell swoop". They show up and make a concession, thinking, "Okay. I'll just make the one concession and close on this". What they don't understand is, they've just undone a lot of work being done by other good people. BLAIR: Sometimes it makes sense, if you think of the previous tip about outwait the waiter. Sometimes it makes sense to just, it's part of the negotiation. To slow things down. When the principle shows up to speed things up and says, "I'm going to make this one concession and close the deal", then they realize, that one concession is really just the beginning. They have just created a whole new set of problems, and the likelihood that the agency is going to close this business at a profitable position has just diminished significantly. BLAIR: The idea is, be careful about allowing the senior person, usually the principle, to swoop in at the last minute and make a concession that they think is going to just close the deal. Because it usually doesn't work that way. DAVID: Yeah. On the other side of the table, they've discovered where the weakness is and how they can get even more concessions. Because you've tipped your hand. That's a good one. DAVID: All right, number six. Decide your give and gets in advance. Decide your give and gets in advance. Which is opposite of what you just talked about, where somebody else swoops in without much consultation. We might make a concession, but we're going to do it very intentionally. We're not going to be willy nilly here. Decide your give and gets in advance. Who's doing this? The team as whole? Anybody that's in a position of power? How does this work? BLAIR: That's a good question. It's not just the person who's on the front lines. It's the people ultimately who have to live with the decision. It's a senior member. It's probably a team decision or the decision in the principle. The idea here is similar to going into an auction, right? We go to an auction, we think, "I'm not going to do anything stupid", and we end up bidding these crazy high prices. Because in part, loss aversion bias kicks in. We make a bid, we mentally own it, and then somebody outbids us and now we've lost something that we just a second ago emotionally owned. BLAIR: What the science shows is, we value losing something about two times as much as we value gaining it. In an auction that causes us to do crazy things. The way you combat that going into an auction is, you have an honest conversation with yourself about what your absolute maximum price is, and you do not deviate from that maximum price whatsoever. You do not allow yourself to get swept up in the moment. You hold the line by making the decision in advance. BLAIR: The principle here of, "Decide your give gets in advance", is the same thing. You decide, what are you willing to give up in advance in the negotiation? What are you not willing to give up? What is it that you absolutely need to get from the client, and what are you willing to take a pass on? You make those decisions in advance so that you do not find yourself in the middle of a negotiation, while at the table or in the conversation, giving away something that you are going to regret later. You just draw the boundaries in advance of the negotiation.   DAVID: I want to take a slight detour here and ask you a question. Because we're assuming that this is occurring at the outset of a new relationship in many cases. If you do this right, do you have to play these same games in subsequent negotiations with the same client? Or do they get and sort of figure out your style and where the lines are, so that it's a little bit more efficient later? BLAIR: Yeah. There's two different camps here, and we may be opening a big can of worms. I mean, it's a legitimate question. There's the negotiating with procurement camp, where if you really are using these principles and you're getting into these protracted things and you have these standoffs, you win. You've won the first round. That does not mean that procurement's not coming back for you even harder. When you're going into a relationship with that type of organization, you're going to win some battles. Ultimately you will lose the war. Ultimately everybody loses the war. BLAIR: The idea is that you get to a point where, "All right. This relationship is no longer fruitful. They've kind of beaten all of the margin out of us over the long term". You know, hopefully it was a good run. BLAIR: Then on the other camp would be good clients where you're not dealing with procurement, or they're more of a value buyer where you just have to use one or two of these techniques, and you're not setting up a long term war where you're constantly battling each other. It really could be one or the other, where you're constantly in a negotiation. Always defending what you know is an onslaught that you're ultimately going to lose in the end, but it still might be worth it. It might be a three, four year good run and it's worth fighting the battle. Or other situations where you just find yourself using one or two of these techniques and that's it. Then you find yourself in a good relationship with a value buyer who really values what it is that you do. DAVID: Yeah. I find that when I talk with my clients, and we share some clients, it's dispiriting enough when they have to enter these negotiations with a new client. But when they've worked with a client for years and then this gets turned on them again, when they want to review the relationship. They almost are just intentionally forgetting everything that happened over the last four years, and you have to prove yourself again. There isn't much in business that can pull the rug out from under your confidence and slap you in the face than something like that. I don't even know why I'm saying this. It just hits me at the moment that it's very discouraging for people to have to do that over and over again. BLAIR: I agree. DAVID: All right. Number seven. Neuter the final negotiators. Neuter ... It's like we're watching a Game of Thrones episode here. What kind of a serial killer are you in disguise? Neuter the final negotiators. Okay. What kind of knife do we use here? BLAIR: Maybe there's a better word for neuter. What I'm talking about is, the moment that you have the greatest amount of power in the relationship is the moment when the client, not the procurement person, but the client says, "You're hired". DAVID: Mm-hmm (affirmative). BLAIR: When that happens, and often you go from the client saying you're hired to, then you get handed off to procurement or legal or finance or whomever. That other department will kind of, you've got to fight another war over there. But if you know the war is coming, if you know, if you're used to dealing with the same types of clients and you know there's a battle with procurement coming, use your power at its height. The moment you're hired. BLAIR: I had a client once who called me and said, "We're doing great. We're closing all of these really big deals. Seven figures. We've got all the senior decision makers in the room. But I have the same problem. It's like every time I get a call from procurement, 'You've got to knock 200 grand off of this', etc". BLAIR: I said, "Okay. Next time it happens, next time you close a deal, in the room you have the senior decision makers. You say to the client, 'Okay. We've got a problem here'. Everybody's in agreement. We're going to do this. Here's the price. Here's the scope. Everybody's in agreement. Everybody's excited about moving forward and really looking for the engagement. Then you stop and say, 'Okay. We've got a problem. We've just agreed on this. The price is the price. We've talked about the value that we're going to create. BLAIR: I'm going to get a call from your procurement person, and that procurement person is going to tell me that if I don't knock $200,000 or $300,000 off this price we're not going to do business together. The price is the price. We've just agreed on what we all agree is fair for the value that we're going to create. The price is the price. There's no economies of scale here for us to make the price cheaper. Can we agree, when procurement calls me', and then you look over at the client side and say, 'When procurement calls me, who can I get them to call?'". BLAIR: Now you're in this little, it's a little bit like a power play move but not as bad as it sounds. In that the senior client on the client side of the table generally will take responsibility and say, "No. Have that person call me". That's what I mean by neuter the final negotiators. Leverage the fact that you have the most power to combat procurement in the moment when the client says, "You're hired". BLAIR: Now the higher up you're dealing in a client organization, the more power you have. In this example my client, the agency, was dealing with senior people on the client side. Presidents of divisions. They weren't dealing with brand managers. Bu even some brand managers might be willing to lend some weight to helping you get around procurement. But again, you ask in that moment. The moment when the client says, "I want to do this", or, "We want to hire you". That's when you have the most power to neuter the final negotiators. DAVID: Well I think this would be fun to do. Because I can see saying it with kind of a twinkle in your eye, and they just smile and look at each other. Because they know that that is coming, and they kind of chuckle and say, "Yeah yeah. Here's who it'll be. This is what they'll say. We'll take care of it". I love this one. DAVID: All right. We're on the way to 10, and we're at number eight. This one is an A B thing. What you say here is that you should either be ruthless, or you should be collaborative. One place is going to take you somewhere. The other place is going to take you somewhere else. Which is which here? Be ruthless or be collaborative? BLAIR: Yeah, so it's both but you pick your spot. You be ruthless with other professional negotiators, and you be collaborative with clients. With good clients. Because you have to work with the clients. You don't want to get into ... If you're setting the tone of the relationship moving forward where you're in this somewhat ruthless battle, you have to be aware of creating the conditions, if we're just not a very fruitful relationship moving forward. But you really should be ruthless with professionals. Again, you could hear me getting a little bit emotional as I talk about procurement people. You don't want to do that. BLAIR: One of the advantages procurement people have is, they are not emotionally invested in the sale. They don't give a shit at all, right? DAVID: They aren't even people. They don't even have emotions. BLAIR: "They're bureaucrats, Morty. Shoot them". Or, "They're robots". It's a Rick and Morty line. We're going to get into trouble with the 20 percent of the procurement people who are out there. Again, I just say to my friends in procurement, I don't actually have any friends in procurement, but it's possible that one day I might have a friend in procurement. I would just say that, the problem isn't just in the procurement profession. It's actually in the organizations above procurement who give license to procurement to procure creative and marketing service as though they were widgets. They think that they can drive cost down without affecting the quality or the value to be created. You can't really do that. The responsibility isn't just with procurement. BLAIR: But back to, these people aren't emotionally invested. We, especially if you're the creative person coming up with the concept, we tend to be emotionally invested in the results. You be ruthless with them. You hold the line. As I've already said, they're going to ask until they hear no, so you start with no. There's no need to build rapport or kindness or to ever negotiate out of emotion. If you find yourself being emotional, see if you can't retreat, regroup, let go of whatever it is that you're emotionally attached to. Then re-engage again when you're emotionally detached. But it's like, be ruthless. Hold the line. Don't fall into the trap of this ridiculous idea that you're going to befriend a procurement or a professional negotiator and you're going to, somehow through the strength of your personality, you're going to get to a solution. BLAIR: As you've pointed out, they're robots, or they're bureaucrats. I use that term in this moment out of a little bit of a respect. What I mean by that is, they're not clouded by emotions. They've got a job to do. They've got an objective. They're marching steadily toward that objective and not letting their emotions cloud their judgment, so you should be able to operate at that same unemotional ruthless level. DAVID: All right. Number nine is, use a positive no. Use a positive no. Can you explain that? I presume you can. BLAIR: Let's hope I can. DAVID: Yeah. BLAIR: There are so many different ways that you can say no. I think so many of us have a hard time delivering the word no, because in so many of our businesses, what we do is we find a creative solution to every problem. We don't accept that the answer has to be no to something, so therefore we have a hard time saying no. BLAIR: There are all kinds of different techniques on how to deliver a positive no. I'll just give you a couple of them here. First you just kind of, if there's an objection, you just make sure that you restate the objection. "Okay, I'm hearing that affordability is an issue for you". Then you deliver your no. You start with kind of a yes. "Yes, I hear that affordability is an issue for you". Then you deliver your no. "Listen, I can't give you that price in this specific situation". Then you layer in another yes. "But what I can do is stretch out the payment terms a little bit", or something else. Or throw in some other forms of value. Throughout the entire time, your attitude is always positive. It's not, "Oh, you know, I don't think we can do this". It's not, "There's no way we can do this". BLAIR: There's a time for, "No way". But there's a time when you want to use a positive no. You're nodding your head saying, "Yeah, I'm absolutely hearing you that affordability is an issue for you on this. I can't give you that price in this situation that you're looking for. But here's what I can do for you". Then deliver what it is you can. "I can throw in some extra value. I can stretch out the payment terms a little bit for you". It's all about delivering no with a positive attitude. BLAIR: I'm not saying that's always the approach. I think there are times when it's just a hard line, "No. Take it or leave it", walk away. But in many situations it makes sense to deliver a positive no. DAVID: You're also demonstrating that you've listened. That you care. You may make a decision that's not one they would prefer, but you're not just simply closing up and not listening to them. That's part of restating this to them. BLAIR: Yeah. DAVID: All right. The final one is to use alternatives to no, and you've got a few examples here. Are these used with clients or with pros? I think I probably should have asked that question many times here, because it's been interesting to hear the distinction. Using alternatives to no. Who do you use these with, primarily? BLAIR: Yeah, I would put most of these, like use a positive no or use an alternative to no, I would put most of them under the collaborate column. That means with clients. Where I find myself tending to want to be more ruthless and just deliver hard nos to procurement. Now that's me a little bit worked up emotionally, violating what I said earlier. The truth is, a really good negotiator will use positive nos and alternatives to nos with procurement from time to time. It's not just all hard lines. Although I really believe that you begin with a super hard line with procurement. BLAIR: I think generally speaking, for sure you should use these approaches with clients. The people that you want to have a fruitful working relationship with that. A great alternative to no, and I think this one comes from Chris Voss. If it's not Chris it's somebody else. I'll also, I'm recalling that some of the other techniques I probably got from Reid Holden in his book, Negotiating With Backbone. It's a small book. It's a really good book. Both of those books are great books on negotiating. BLAIR: His line, and again I think it's Chris Voss. Instead of saying no just ask, "Well how would I do that?". If procurement is saying, "Listen, the fees in your proposal, we're not giving you that. We're giving you 60 percent of what you've asked for. You can take it or leave it". Then you essentially turn the problem back onto, instead of saying no you just turn the problem back onto the client. "Okay, 60 percent of the fee. How would I do that? How would I deliver the services that you're looking for at just 60 percent?". DAVID: Mm-hmm (affirmative), and a pause, right? At that point? BLAIR: Right. Always a pause, and we're not talking about that here, but I've talked about the power of pause before. When you pause after you deliver a no or an objection or an obstacle for the client to overcome, you want to pause because whatever you hear next gives you so much information about how much power you have in the buy sell relationship. BLAIR: You could also use a, "Yes, but", instead of asking, "How would I do that?". The client might say, "I don't know. That's your problem. How you do it is your problem". You might say, "Well do you think we have 40 percent profit margin built into this?". "I don't know, that's your problem". You could say, "Yes, but". You could say, "Well you know, I suppose I could deliver on 60 percent of that. I mean, if that's your bottom line. I guess we'll just put the interns on it and remove access to senior people. Access to principles. We'll take our creative director off of it, and yeah, we can meet your price that way". DAVID: They're starting to get a warm feeling. BLAIR: Yeah. I mean, this is where we're having fun now, right? I think when the client asks you to do something ridiculous, you could ask the client, "Well okay. How would I do that?". Or if the client's not going to participate in that question you can offer a solution. Again, this speaks to the title of Gerry Preece's book, Buying Less For Less. The idea that when procurement is buying marketing services, they drive the cost down. What they don't appreciate is, they're driving the quality down. Because in a people based business, the way you get your costs down is, you get less expensive people on the job. BLAIR: Just communicate that to the client. "Okay, we can give you that price. But here are all of the things that we have to strip out". What you're almost certainly going to hear is, "No, we want those deliverables or value drivers at the price you quoted". That's where you can laugh and say, "Yeah, well let me tell you about the things that I want in my life too, that I'm not going to get either". DAVID: One of the things that I've been thinking about my own situation over the years, and something that's hit me. It's given me this kind of warm feeling. I know that sounds weird. But it's when I find myself getting a little bit angry, and that's because I feel like I'm being taken advantage of, or not appreciated to the level I should be. BLAIR: Yeah. DAVID: I can relax and tell myself, "I don't need this that badly. Why don't I just smile and make this more of an interesting exercise?". Not so much a contest, but an exercise to see what I can learn. As long as I'm willing to walk away from it, I don't understand why I'm getting angry. I need to treat this more as a business conversation. It frees up my mind to think in these categories and not get all wrapped up in myself at some point. BLAIR: Yeah. I call that smile and defy. You smile to yourself for a minute. Remind yourself, "Let's not get carried away here. This is just a game". Then you defy what it is that's been asked of you. Then you just see what happens next. You have that ability to do that. I have that ability to do that. Because we're not over-invested in the sale. We're not allocating significant resources from our businesses to close any one particular deal. DAVID: Yeah. BLAIR: When you don't over-invest, and I know and work with lots of agencies who have learned to not over-invest in the sale, everything changes when you're not over-invested. It's easier for you to smile. It's easier for you to use some of these techniques. It's easier for you to walk away from poor fits, knowing that if it really is a good fit, it will come back on your terms. DAVID: Care a lot, but don't care too early. That should be the title of this. BLAIR: That's great advice, yeah. DAVID: All right. We will put some bonus ideas in the show notes. Marcus will help us with that. These are 10, and we'll throw some more in there. This was really fun to talk about, Blair. Let's hope that none of these procurement folks listen to this before you meet them in London, or we will have some real life neutering taking place. BLAIR: I would prefer they did listen, and we had some frank and fruitful discussions. DAVID: Okay. Thank-you, Blair. BLAIR: Thanks David.

North Star Podcast
Devon Zuegel: Cities as a Superpower

North Star Podcast

Play Episode Listen Later Aug 18, 2018 74:23


Listen Here: iTunes | Overcast | PlayerFM Keep Up with the North Star Podcast Here My guest today is Devon Zuegel, a writer of code and writer of words who spends her time unlocking human potential through incentive design and tools for thought and cities. In this conversation, we jump from coordination problems to urban planning to travel to architecture. We compare cities like Singapore and San Francisco and talk about the power of urban density and architecture to make us happier and healthier. Then, we talk about writing, specifically the three tiers of common knowledge, how to find good ideas, and the concept that Devon calls playing chess with yourself. One thing sticks out from this podcast and other conversations with Devon. Above all else, Devon lives in obsessive pursuit of high leverage ways to spend her time and energy. In the past, that’s led her to computer science and in the future, I suspect it will lead her to cities and infrastructure. Why cities? Devon offers an excellent answer. Cities are big enough to have real importance in the world and small enough to be nimble and somewhat understandable and there are a lot of cities. You can actually hope to make some comparisons in a way that you can’t really do with countries.  Please enjoy my conversation with Devon Zuegel. Links Bloom Algorithms To Live By: The Computer Science of Human Decisions Georgism Devon’s articles related to this episode:  Advice on Writing Why Flaking Is So Widespread in San Francisco A Day In Singapore: Urban Identity 2:03 Devon on coordination problems and the problems they’ve caused, such as climate change and housing issues, and how clever solutions to these problems are the reason humans have progressed so much in the past hundreds of years 6:19 Human cognition and thought as it is augmented by media, cities and blockchains and the benefits of this augmentation 8:10 The most classic tool for thought and why it’s such a catalyst for healthy and productive cognition, long term and short term memory function and increased IQ 16:41 Devon’s writing process and why she defines it as playing chess with herself 17:45 How Devon has been able to get her writing to flow and the three categories of topics available to write about, common knowledge, obscure knowledge and the intersection in the middle 20:17 Devon’s theory of on why people in San Francisco are so flaky in comparison to sister cities like Chicago, Los Angeles and New York City 28:16 How Devon chooses what rabbit holes she wants to go down prior to writing an article and how to make most topics interesting by creating a model around the idea 32:25 What makes Singapore so interesting to Devon, in regards to history, culture, GDP growth, etc. and her major observations after visiting the country 47:20 The moment Devon became aware of the effect of architecture and how it can make employees less involved with their colleagues by not promoting micro-interactions 50:53 The five metrics that a house should be described with, that are never used, when being promoted on websites like Airbnb, Zillow, Craigslist, etc.  57:00 Devon chooses the three metrics that she’d pick when it comes to the city she lives in and the home she’s living in for maximum interaction, convenience and mental economy 1:03:16 Algorithms To Live By and why Devon sees it as the best self help book she’s ever read, despite it not being a self help book 1:05:37 Devon’s opinion on Georgism and how people talk about economics as a spectrum from capitalism to socialism or communism and the third category of economic goods that it doesn’t touch upon 1:07:30 Devon’s changing opinions and her epistemic status placed on each of her blog posts written with a strong opinion 1:10:03 Devon’s philosophy of travel and why she views it as scale free regardless of how many or little places you visit 1:11:51 Devon’s philosophy of productivity and how she writes down dozens of notes and uses long form emails to repurpose her ideas into publishable articles Subscribe to my “Monday Musings” newsletter to keep up with the podcast. Quotes “I am very interested in coordination problems. I think that they explain a lot of the problems that we see in the world, everything from climate change to nuclear disarming to issues in cities to making it so that people can actually live where they are the most productive to housing policy. I could go on and on. The solution to coordination problems is incentive design, and clever solutions that are some of the reason humans have been able to progress to the extent they have throughout the past few hundred years.” “The most classic tool for thought, and one that I think we tend to take for granted, is writing. Most people think of writing as a way to communicate ideas that they’ve had in their head to other people. Obviously, it does serve that purpose and people sell books for a reason. But, I think it goes way beyond that.” “In the last year, I have found that writing has gotten a lot easier for me. There’s probably a lot of reasons for this but I think the core is that I realized there are three categories of topics you can write about. There’s the stuff that everybody knows that is trivial to write about because it’s easy. On the other end, there’s stuff that nobody knows yet or nobody around you knows yet, so it takes a lot of time to figure it out and it takes a lot of research. Now, there’s this middle area between common knowledge and really obscure knowledge of stuff that you have a unique perspective on because of where you happen to be in life and you understand it so intuitively that you can just talk, think and write about it fluidly. But, a lot of people don’t know it yet. That’s the sweet spot.” “For me, it’s very important that I can walk places. Walking is a way to interact with your community in these small ways, every single day. The way people get comfortable in a place and in a social group is not through one really intense interaction, but through a bunch of smaller ones where you see things from different angles. You experience, what does my neighborhood looks like on a sunny day, on a cloudy day, or when I’m tired. These tiny, trivial things help you understand, much better, how things function. You get to know the vibe so much better and you meet people you wouldn’t meet if you were in an Uber.” “Algorithms To Live By is the best self help book I’ve ever read and it’s not intended to be a self help book, it’s intended to be an algorithmic look at certain problems that people see day to day. But, it helps me frame certain problems that I personally run into in terms of the algorithmic complexity. I realized the stress that I was feeling about certain things I was worrying about, were actually totally rational.” Subscribe to my “Monday Musings” newsletter to keep up with the podcast. TRANSCRIPT DEVON: I am very interested in coordination problems. I think that they explain a lot of the problems that we see in the world. Everything from climate change to nuclear disarmament to issues in cities and making it so that people can actually live in where they're the most productive, in housing policy. Well, I could go on and on and on with the list. So the solution to cooperation problems is incentive design. And I think clever solutions to incentive design are some of the reasons why humans have been able to progress to the extent that they have throughout the last few hundred years. So a primary example is contract law, it makes it possible for people to trust one another. Other examples are the development of risk and the concept of commodifying the risk. DAVID: I was having a conversation yesterday in another podcast and the guest was saying that in 1471, what happened was people were able to pool maritime risk. And what happened was it let big expansive ship voyages happen because you could pull risks together. And so if you invested in a ship and say that ship broke down, then you wouldn't lose all your money. And by pooling risk and by coming up with new financing and coordination solutions, you could do things that weren't previously possible. I thought that was really interesting. DEVON: Totally. That's a great example. Actually. Old maritime risk looks a lot like venture capital today wherein venture a lot of things fail. A lot of things fail spectacularly. But if you can spread out that risk across a whole pool of investments, it only takes a few to like really, carry the whole fund. In the case of maritime investments, a lot of the ships broke down, they had problems. But if one ship came back with a whole load of goods that could repay all of the rest of the costs. However, most, most investors back then couldn't take that risk because most of them would have failed. They might've lost all their money before they hit that one big one. And so by the development of that maritime risk, they were able to get past that sort of short-term problem and to get into the run longer returns. I think that's a really good metaphor for all sorts of problems that we run into wherein the short term it's rational to do a thing that is not as interesting, that it's not as lucrative, but it's also not as risky. But if we're able to coordinate as a society, as a company or whatever level you want to talk about. So one more concrete example to bring it down from like highfalutin, venture capital and maritime risk, you could just look at cooperation problems as simple as when you're dating someone for the first time, there's that standard wait three days until you text them back after you met them because you want to come off as cool. You don't want to come off as desperate, right? But if you really like each other, like all this is going to signal is that you don't like them very much. And that may be rational for you because you don't want to come off as desperate. But if you're both doing that, you end up with an outcome where it seems like you don't like each other very much and it takes a really long time to actually realize that you do. Ideally, you would have some neutral trustable third party who could be a person A, person B, out Alice and Bob like you both like each other. You told me that you liked each other, just go for it. You know, have fun. And I think a lot of healthy relationships that I've seen have actually started in this way because of some small quirk at the very beginning. It can be super useful, but a lot of the pain that I see my friends going through when they date is literally just the result of playing games because rationally, you're supposed to. It's basically a prisoner's dilemma. And so if you can have someone who forces you into the correct quadrant where everyone is better off, that's much better. DAVID: So then let's jump into sort of human cognition and human thought. Maybe begin with media. What interests you? Sort of when I think of where this conversation is going to go today. So much of it is about augmentation, right? Like cities augmenting the potential for humans interact and making that so much easier. And blockchain augmenting human coordination is making that easier. And then here with thought and having tools, augmenting human thoughts and letting us go places that we probably wouldn't be able to go if we were stuck in the mountains on our own. DEVON: I think the underlying reason I'm interested in incentive design is because it allows us to unlock human potential and allows people to do much cooler stuff that makes them happier, healthier, makes life more worth living. I see ways to augment our cognition as serving that same purpose though from a different angle. The umbrella term that people sometimes give this is tools for thoughts and we have basically the same brains that we and our ancestors had thousands of years ago, but we're able to do so much more. Part of that is because we've developed incentive design. The other reason is because we've developed tools for giving our cognition more leverage. And I use the term leverage actually very specifically. You can only get so strong no matter how much you lift. How once you go to the gym, like you're still not going to be an order of magnitude stronger. You're definitely not going to be two orders of magnitude stronger. However, if you design an engine, if you just even add a lever that gives you that leverage, you can do so much more with your muscles. I see that that translates directly to your brain. The most classic tool for thought and one that I think we tend to take for granted is writing. Most people think of writing as a way to just communicate ideas that they've had in their head to other people. It obviously does serve that purpose. People sell books for a reason, but I think it goes way beyond that. So one thing that writing does for you is it expands your working and your long-term memory. With the long-term memory, it's pretty obvious. You take notes, maybe you don't remember all the details, but you can look them up later. DAVID: To your point, even today I was writing something this morning and I wrote something that I wrote about a year ago and I have no recollection of writing it and I read it and I was like, wow, that's actually pretty smart and it really helped me, but I think to your point, there's a permanent element of writing and being able to sort of work through sentences and craft them, makes it so that you can achieve thoughts because of the repetition and the sort of tweaking and editing of writing that you can't do if you're just speaking like we are right now. DEVON: 100 percent. And I've also had that experience more times than I can count of like coming across something I've written and being like, oh, this is interesting, I wrote that. That came out of my brain. And as long as you have enough of a pointer to that idea that you can find it when it's necessary, or it gets surfaced by accident because you happen to open up an old notebook. That's extremely powerful. It makes you much better at remembering. I think even more importantly, a writing helps you with your short term memory, your working memory. There have been a lot of studies showing that a working memory is one of the highest things correlated with IQ and the ability to solve problems. And I think the reason for this is because if you have good working memory, you can hold a lot of state in your head and you can sort of fiddle with that state. You can hold contradictory but potentially correct ideas and outcomes in your head while you work through the problem. And then they collapse into one at the end. DAVID: Describe state real quick for someone who doesn't have the computer vocabulary that you do. DEVON: So state is what is the current status of the world right now. Let's say you're working through a personal problem and with your family or something, and you want to go through step by step and sort of understand the implications of what different people have done. You're getting the story from different friends, like maybe you're helping reconcile like your aunt and your uncle or something like that, having marital problems and you want to understand how they got to that point and how, given where they are right now at that point, like how different changes result in better or worse outcomes. Understanding the current state of the situation and then like fiddling with it and being able to hold all of those sort of partial computations in your head are really important to be able to compare them and to be able to move forward and find a solution. DAVID: So you're saying that writing and sort of computers at large now help us hold more state so then we can move on to higher-order tasks that perhaps aren't memory, that our brains are really well suited for. DEVON: Exactly. And they're more interesting. And working memory can kind of provide abstractions. I think the best metaphor for working memory or external working memory is like scratch paper, that there's a reason why math teachers always tell you, feel free to use as much scratch paper as you want. That's not just because they hate trees and they want to waste all paper. It's because being able to externalize that process is really, really helpful. Offload is the perfect word. DAVID: So back to writing. DEVON: I think it actually goes even much further than memory. With writing, it is fundamentally the process of externalizing an idea which allows you to play with it in ways that I don't think are so easy when it's in your head. I'm certainly not capable of it. Writing things down can reduce the amount of ego that you have as you fiddled with an idea. Maybe I'm just crazy, but when I wrote them down and almost pretend like the person who wrote that wasn't me, it was like, that's past Devon or someone else entirely. I can detach myself from it much more in a way where, when I am a thinking through something just in my head and lying in bed wondering. I'm not going to be as rigorous about it. Now that's not strictly worse. There are other things like everyone has great thoughts in the shower for instance. It's very common. But it doesn't serve all purposes, especially if you're trying to vet and find the nooks and crannies of an idea. When you write it down, when an idea has inconsistencies or gaping holes, they are clear and right in the face when it's written down in a way that is just so easy to gloss over when they're in your head. DAVID: And also when you're speaking, you can sort of gloss over some of the inconsistencies with emotion, right? If I speak really deeper and confident with what I'm saying, actually there's an element of trust there. It was really funny. So we had a meetup in Queens a couple of weeks ago and my buddy goes on Snapchat stories and he goes really confidently, coming to the meetup and he goes "Did you know that the reason it's called Queens is because Queen Elizabeth came to New York in 1754?" and you're sitting there being like "Man, you know, why are you being so smart here?" And then he finishes the thing and he goes "Well, I just made that up, but you believe me because I said it so confidently." So what writing does is it strips out the emotion out of a form of communication and it allows logic to take over emotion. DEVON: Right. And it allows you, it gives you something like almost physical to move around and change. I'm a really big believer that constraints are actually a good thing in your thinking because if you're completely working in a vacuum, you have nothing to push off of. You have no feedback cycles. Whereas if you can just get a draft onto the page, you can fiddle around with it so much more. And I find that writing that draft in the first place, that's usually the hardest part, but once I have something to work off of, it gets much, much easier. It helps you find implications that you didn't realize there were, which again, I don't fully understand like the cognitive science behind why this is. But by putting it on the page, you start seeing these almost trails in your head of like, given this, given I said this, what are the implications there? And you can actually follow those trails and like come back to them after you've written them down and realize, oh, this thing does have an implication I hadn't considered. One of my favorite things to do when I'm writing is just looking up synonyms for words. And the reason is not just to make myself sound smarter. Though, that's always a plus. But much more importantly is that by looking up synonyms, you can think about which words don't make sense here. Even though they are technically synonyms. And why they don't make sense and analyzing that is extremely useful. It's sort of a generator function for coming up with new ideas. Similarly, I think choosing the right word is also really important. Words come with such heavy connotation that picking the right one can be the difference between concepts really striking home and like feeling kind of flat. So I highly recommend people using sources when they write, all over the place. I actually use sources when I write code as well, for variable names and class names and things like that, because it helps you. Computer science and programming is basically the art of abstractions and abstractions is another way of saying names mostly. And coming up with really good names for things is a really critical piece of being able to write good software. So I think the source, I go to thesaurus.com probably 300 times a day. I have never actually counted, but it's a lot of times. I've always idea called playing chess with yourself. DAVID: Walk me through that. DEVON: So I think writing, especially the writing process, before you've published, as kind of like playing chess or yourself. There's that Pixar short, it's called like Geri’s Chest Game or something like that. And it zooms in on this guy sitting on a park bench playing chess and his partner isn't around. And you're like, oh, I guess maybe they went to the restroom, maybe they're coming back and then all of a sudden the camera zooms in and he's like on the other side, playing with the white pieces now. And then he flips back and forth and you realize he's just having a ton of fun and playing against himself. And he's really excited against himself. This is a hard thing to do inside of your own head, but it's actually a lot easier when you've externalized something because once you have that writing on the page, you can treat that as sort of another person almost. And play around with it in a way that is just much harder when you're by yourself. DAVID: Totally. And then the other thing is I think you have sort of an uncanny knack for generating unusual ideas and I don't say this to discredit you, but I think that you've built some systems to make that a hell of a lot easier. Walk me through different tiers of common knowledge. So I got an email last week from a guy who said, I love your writing, but the biggest thing preventing me from writing is that I always think that everybody else knows the things that I know and that's the biggest thing. Stopping. And I responded and I said, well, that's not necessarily the case, but I wasn't able to formulate something that I think that you've been able to grasp in terms of different ways of thinking about what is common knowledge? If you could describe that. And then how does that translate to writing and drafting an idea? DEVON: Yeah, that's a great question. So in the last year, I've found that writing has gotten a lot easier for me. There's probably a lot of reasons for this, but I think the core one is that I realized there's sort of three categories of topics that you can write about. There's the stuff that everyone knows that's like trivial to write about it because it's easy. The sky is blue. Okay, good. That's awesome. No one wants to read that. Very common knowledge. On the other end, there's stuff that no one knows yet or no one around you knows yet. And so it takes a really long time to figure it out, requires a lot of research. I can point to some examples of things I've written where I'm very proud of this writing that I've done, but it was a slog all the way through. Some of the stuff that I wrote about, the federal housing administration last year, just required poring through hundreds of documents from old FHA manuals and things that I don't know if people have looked at in a while and I found some novel stuff, but it also was a ton of work. Now there's this middle area between common knowledge and like really obscure knowledge of stuff that you have a unique perspective on because of where you happen to be in life and you understand it so intuitively that you can just talk and think about it fluidly. But actually a lot of people don't know it yet and I think that that is the sweet spot for generating a lot of streams. DAVID: How would you know when that's true? DEVON: That's a hard question. For a long time, I just thought that this the way I think is the way that everyone thinks. And so I was like, no one really wants to read about like my theory on flaking in San Francisco. Everyone in SF knows that already. DAVID: But what's your theory on flaking? DEVON: I haven't lived really in any other city, but my impression from talking with friends is that the rate of flaking is extremely high, with friends, with romantic partners, et cetera, relative to sort of sister cities like New York or Chicago or LA. I think part of the reason is that people in my social circles in San Francisco really understand opportunity cost well. There's a very casual culture here where it seems like an acceptable flake. And we also are like, even more so than other millennial types, are very technologically savvy. So if 10 minutes before your coffee date you're like, oh, sorry, I got caught up in something. Can we reschedule next week? It feels trivial because it's just a text. You're not going to literally stand them up because they just won't show up. But the problem with this is that it's another cooperation problem where we ended up in this equilibrium where it feels acceptable for everyone to flake all the time and just not show up to their commitments. But then like everyone's worse off because your scheduling is more complicated. You never really know. If things are going to happen when you think they're going to happen, you kind of don't want to be seen as like the pathetic one who doesn't cancel the plan. So you almost are incentivized to flake because if someone flakes on you enough times, you're like, well, I don't want to look like an idiot. I don't want to be taken advantage of here. So, next time we make plans I'm going to double book and see which one feels more interesting that day. And I think that leads to a real breakdown of trust and like happiness and satisfaction with relationships. Since I realized this, I've personally made a stance where I'm like, I will not flake on something unless I have an exceptionally good reason. And my friends I've noticed have also started to like follow up with me where I've put a stake in the ground. It helps that I wrote a blog post about it. I put a stake in the ground of like, I don't want this to be okay anymore because it's like making everyone's life worse. DAVID: What about San Francisco makes flaking uniquely common here? DEVON: I think there's a mentality of casualness where if you walk around the city, no one's ever dressed up. I mean, literally today I am wearing yoga pants and a tee shirt, and people want to look mostly clean cut, but they'll wear athletic gear almost all the time. I think that is indicative of a broader social casualness. Certain social norms are not as strong and in fact, the social norm is to not have strong social norms. And if you want to come off as like cool and casual. If someone is placed on you and you say something and you're like, hey dude, you flaked on me last time too. That's sort of like a point against you. You're seen as uptight or something. Maybe LA is also more similar to this, but I think like in New York, I feel like there's more of a seriousness in the way people interact where it's like your people get dressed up when they go out. Like when I go to New York, I always feel super underdressed. I think that carries over to a lot of parts of the culture. Where you don't break dates unless you have a good reason. Whereas I can look back on my calendar before I had all of these thoughts and honestly I was either breaking or having commitments broken on me like 50 to 70 percent of the time. And I don't think I'm unique in this because I've had conversations with a lot of people on my team. So I want to go back to writing, but I just want to summarize why I think that falls into the second category of common knowledge. So the first category is things that everybody knows like the sky is blue. The third category is things like the history of FHA housing, which probably requires a lot of research and nobody knows those things. But the second category is things that everyone sort of has a common framework for discussing like flaking. But because you are in a social circle that has a high opportunity cost in San Francisco, you have unique insight into that problem. And when we have a common knowledge, a common way of speaking about something and you have unique insight into that same sort of thing, that is when you should go pursue an idea and share it with the world. DEVON: Totally. I think that's a really good framing of it. I especially like the term common knowledge. Because I don't think anything I said in the post was surprising to anyone, but I think finally sitting down and putting the pieces together as to why all of this stuff comes together, I think is the difference. And just taking the time to sort of reflect on like various dynamics in your own life I think can be a really powerful generative tool. DAVID: I gotta ask, as you think about your writing, you think about your learning sort of your process for living, so to speak. It's cool because I like people like this. Your process for living is also a process for sharing, right? It's almost like a co-dynamic between the two where you live, you share, you share, you live, and I think that they, they sort of co-evolve and develop. Who were the people who have really inspired you to become like that and who were the mentors, digital or physical that have really inspired you? DEVON: There have been a lot. And this actually ties really nicely into the framework of like common knowledge to obscure knowledge. I think I used to think that a writing had to be this big formal process where you sit down with an argument or a spectrum and you try to decide where on that spectrum of arguments you lie and then you dive deep into the literature and you study it, and then you pop out weeks later and you've like displayed to the world this thing, this masterpiece you've been working on. A lot of writing does follow that. A lot of great writing. And I don't think people should stop doing that by any means, but I think there's this other type of writing that is treat your ideas less as a final project product and more as a process. Someone who I think does this very well, I don't know him personally, is Ben Thompson at Stratechery. He writes about the same stuff day after day, but each time he writes about it, he turns it a little bit in his mind. He comes at it from a slightly different angle and over the course of years he has built this canon of like what aggregation theory and he has this whole vocabulary that he's built up and you can see when you go back to his earlier writing, the idea is not fully developed at all, but the writing itself was the thing that developed the ideas. And I think that that is a huge mindset shift that I've had where I used to think first you have the ideas and then you write them down, but actually, you should have some seed of an idea. But then when you start writing, that's what actually brings it out and like causes it to flourish and grow. Another person who's played a really big role in helping me realize the value of this is Tyler Cowen (my podcast episode with Tyler). His blog, Marginal Revolution is just like one of my favorite things on the internet. It's the most ridiculous set of things. It's the intersection of all stuff and he doesn't take it that seriously. DAVID: Right. And the juxtaposition of ideas that you find there puts your brain in crazy places because he'll share, NBA basketball, his recent trip to Ethiopia, and then markets and everything in some weird market that you've never heard of. And I think that really cool ideas and really cool ways of thinking come not necessarily when you discover a new idea, but when you juxtapose ideas that you're vaguely familiar with and then your brain just goes in weird places through that. DEVON: Yeah, by having this huge diversity of sources and ideas, it allows for a type of lateral thinking that I think is really missing in the world. And something I particularly love about Tyler's work is that he both does and doesn't take it seriously at all. So by does, I mean he does, he spends all of his time doing this and he cares about deeply. So he's serious in that sense, but he also treats it as this big game where he's just like, you know, I'm just having fun, I'm pursuing the things I find interesting and I will go down the rabbit holes that seem interesting and ultimately they will become useful. DAVID: So talk about that. So that is a really important part of the learning journey, especially on the internet. so if you take before the internet, right? Like, think of the process of going into the library to research a project in college, right? You go to the librarian and you say take me to history and then it's between like book number 800-899 on the little codes and sort of you spend time in history. But you said something there that I don't think you realize that you said, but it is what it means to learn on the internet. It's sort of having hunches and ideas that certain rabbit holes are going to be interesting and having the audacity to go down those rabbit holes. But how do you gauge what rabbit holes do you want to go down? DEVON: So I think it doesn't matter. I actually think that almost everything can be interesting if you try to build a model for it. Now so things aren't interesting if you try to just rote memorize stuff and I think that that's going to be true with basically every topic actually. However, if you try to understand why things happen and build a causal model in your head, everything's interesting. When I was much younger I felt like, ugh, I like playing sports but I don't really enjoy watching sports. And I think this is a pretty typical like nerd opinion to have. But I realized that if you actually watch a game and you tried to understand sort of where the threads are, like if you pull this thread here, what happens to the fabric over there, have this ongoing game. It's extremely fascinating. Same with a mortgage history. Like if the FHA had done this like tiny little thing differently, like what would have been the rippling effects downstream and why do you think that's true? What are the other explanations for that same behavior? So I don't think the specific rabbit hole really matters that much as long as you are actively forcing yourself to build a model. DAVID: It's interesting because I was just watching the NBA finals and with the Warriors. So Stephen Curry, the reason where he is so good, is because after he passes the ball, he runs to the corner and tries to catch it and you just watch it and it's like, it's amazing to watch. But just, it's funny because. And then I would also watch switches on screens and what not. These are things that sound advanced, but they're super simple. And just by having two or three things that I could sort of hook to, then it opened the door for the rest of it. And it was funny because to go back to Tyler when, whenever I try to learn something the best advice that I've gotten from Tyler Cowen is the idea of entry points. Find something that you like, something that it's intuitive, a metaphor that you like, start there. And then as you begin any sort of learning journey, start with an entry point that you're familiar with and use that as your balances, your crutch to go explore new territory. DEVON: I strongly agree with that. So in high school, I thought of myself as much more of a liberal artsy type of person. I was always pretty good at math and science and so on. I didn't struggle but it just didn't click until I was 16, 17. My boyfriend and I at the time rebuilt a 67 Mustang that he owned and we did an engine swap. We replace the rear end, we did a lot of work on this car. And suddenly all of the engineering and engineering related skills that I've picked up over time became fascinating. I was like, I want to understand how all this works. I picked up something like thermodynamics books and like this, this car was the entryway to all sorts of things and now this is a particularly useful one because if we did it wrong we would die while we were driving it. So like we had pretty good motivation to figure stuff out. But I think finding some sort of entryway into that is critical. And I mean working on the car has literally changed my career in the sense that I don't think I would have gone into mechanical engineering and then computer science if it hadn't been for that thing. I mean the guy helps too, but the car was like really this concrete thing I could imagine in my head and then want to understand the pieces that made up the whole thing. DAVID: Totally. Well, I want to switch gears and talk to you about the thing that I'm most excited to talk to you about today, which is really cities and with the intersection of architecture and incentives. Maybe we can start with Singapore and I'm going to ask that selfishly because I'm really interested in Singapore. I think there's a lot to learn from Singapore, but you were also just there and you've written a lot about Singapore. What is so interesting to you about Singapore? DEVON: Oh man. What is not interesting about Singapore? So Singapore I think is one of the most interesting countries in history. And that's saying something, given that it's only been around for I think 50 or 60 years. It is a city-state. It's only about 5 million people. It is ethnically extremely diverse. There are ethnic Chinese, ethnic Malays, ethnic Indians, and many, many other groups there as well. And it's one of the safest places in the world and it has a booming economy and it has been for a long time, seen as like a center of stability in a region that has not always been stable. So all of those things are incredible about Singapore and that would be crazy for any city or any country, but especially considering where they came from, where they had, I don't remember the exact number, but they had GDP, I think equivalent to like Vietnam in the sixties, and now they have significantly higher GDP than almost any country in the world. One of the highest. Now GDP doesn't measure everything, but it correlates with a lot of important things. The reason I think if I had to pick one reason why I'm fascinated by Singapore, it's because it has one of the weirdest types of governance ever. DAVID: Describe the governance. DEVON: The governance is increasingly less so now, but it's quite to totalitarian. It's not very Democratic at all. DAVID: It's funny because my first thought is whoa, that's not good. But it seems like you're hinting at something else. DEVON: I also think it's not good. And if the whole world were run the way Singapore is run, I don't think that would be a good thing for the world. In part because of the specific things that Singapore does, like it still has like physical punishment and so on for not very big crimes. But then also beyond physical and capital punishment. It also just like having one system for the whole world is not a great thing. It's extremely fragile. Things can go wrong in ways that ripple across the entire world. Now that sounds extreme, but I bring that up because I think Singapore is interesting because it is the opposite. Not only does it not, not only is the whole world not governed the way Singapore is. Singapore is tiny. So even if you really strongly dislike what Singapore is trying to do, what it's experimenting with, it's relatively easy to leave. Now I want to add the strong caveat that like leaving the country you were born in is never an easy decision. And I am not like underplaying that. But it is relatively much easier than leaving a massive country that is not deeply interconnected with the world. And so the thing I find exciting about this country is that it provides this room for experimentation at a relatively low cost. If the entire United States were to take on an experiment, say universal basic income or something else entirely, and if it were to go wrong, it would just, it would be a disaster. It could cripple the country and it would affect roughly 20 million people, something like that. And like you also wouldn't even really be able to know if what the causal mechanism was if UBI was the thing that screwed up or something else entirely. Whereas if you can run a bunch of smaller experiments, which this is the idea of federalism, then you can actually compare the results. People can leave if they really don't want to be part of this experiment. And I think this is really important. People don't like the concept of being experimented on and I get it, but if we don't experiment with new models, we're never going to improve. And so I think the question shouldn't be, should we experimental or should we not experiment. It's like, yes we should, but we should find the ways to have the greatest diversity of experiments while also minimizing the cost. DAVID: Right. Like a lot of what China's doing is sort of A, B testing cities, but the downside risk is impacting millions and millions of people. And I think to your point about minimizing the downside, you know, you could argue that they've gone too far. DEVON: Yeah. I think there's a Slate Star Codex blog post that has a great word for this. It calls it archipelago communitarianism. The concept is like we could have a bunch of cities or very small countries, that had radically different systems and the only promise that they make to each other is that they won't stop the people from leaving those places if they really want to. Maybe there are a few other rules too. I'm not gonna remember the entire details of the blog post, read it a few years ago, but I love this idea of having like little islands of extremity to really push an idea to its limit. And if it, if everyone leaves them, that means that that's not what people wanted. DAVID: Well, that's sort of where the whole voice exit loyalty idea of crypto is coming from. Traditionally in terms of countries, you could voice and you could sort of vote and you could say we want to change the way that things are run by speaking up and there's an exit where you can leave. But traditionally with citizenship, you haven't really been able to leave your country. Even if you're abroad, you still have to pay taxes as an American citizen. And so you're forced to be stuck between voice and loyalty. Whereas now we're switching to where you can still voice your opinion, but if you don't like it, you can exit. And there's a lot of freedom that I think comes with that. DEVON: Yeah. I think it's not just that you can still voice your opinions and also you can leave, it's that you can voice your opinions often better if you have a very small community. A single person has much more sway over the outcome. So it seems very likely to me that it's much easier for a person in a very small community to be able to make a change in that community to begin with and like shape it in their own image than it would be for a massive country like the US or Brazil or something like that. So by bringing it down to a smaller scale, you both get added exit rates, but you also get a greater voice. DAVID: Totally. So you were just in Singapore. What stuck out about being in Singapore to you? Let's go to two places. What is the biggest thing that surprised you when you were there? And what is the biggest thing that you've been thinking about since you came back from Singapore? DEVON: I knew that Singapore had great Infrastructure. I knew that its citizens were well educated, that a lot of its systems just worked. But I didn't realize how much this is embedded in the psyche of the place. It's not just that like, stuff works well and some people forget about it and like go ahead and do their own thing. It's like the most central place of the city right next to Maxwell's Hawker Center, which is like a big destination in the core of the city. There's this place called the URA, the urban research association. I don't remember the exact acronym. Basically, it's this like big gallery on urbanism and like what it means to be an effective city with good governance and what it will take for this to continue and get better over time. I went into this gallery exhibit because I can't keep away if you say that it's like an urban museum. I'm like, okay. It's Devon catnip. I couldn't help but to go in. And I was there at 3:00 PM on a Tuesday and it was full of students, the sense that I got is that like every Singaporean student probably goes there like once a year. I don't even think that we have a gallery like that in San Francisco. And certainly not in the center of the city and kids definitely don't go there all the time. There was this overall sense of understanding of why things work so well, how things won't necessarily keep working well in the future unless we do something about it and like a sense of responsibility that people in the community have to like be a presence voice, which seems very contradictory with some sort of a more totalitarian style of ruling. But Singapore may be the only place in the world where there's a brain drain into the government and not out of it. That is very consistent with what I saw. It's very deeply respected to be a good technocrat. Someone who understands how systems work and like truly wants to make them better. DAVID: They pay well, what else? DEVON: They pay very well. There's really high prestige going in. I haven't really thought about this too hard. DAVID: Okay. Then we'll switch gears. So you said something really interesting about cities before we were recording the podcast that I thought that you phrased perfectly and that you're especially drawn to cities because they're in this middle of scale, right? Where they're big enough to have an importance on the world stage, right? Like a city like New York, San Francisco, Singapore, they're a big deal. But then there are small enough to be nimble and still sort of understandable like it's hard to sort of wrap your head around what it means to be American because they're just so much going on here, but then also sort of what you were talking about earlier in terms of experimenting. There's a lot of them so you can sort of abstract lessons from each one. And so it's this perfect size, perfect density, perfect volume that makes cities really interesting to study. Right? DEVON: Totally. I think that the nimbleness is really important. There is some digital ID that Singapore is rolling out for all of its citizens pretty soon and they're going to just do it. They have 5 million people, which is a lot of people to roll something out to, but it's big enough for this ID to really matter, but it's small enough where they're like, we can just do this, we can just, we can just make it happen. And I think that's thrilling that you can experiment with something of that size. At the same time, you have this really tight feedback loop. If your trash isn't picked up tomorrow, you're gonna notice within a week you're going to probably start writing letters and like your trash better get picked up. I think at the national level, the feedback loops are much longer and it's just harder to know if people are governing you well at all. And that's a recipe for disaster. It leads to much more misalignment of incentives. DAVID: Definitely. Tight feedback is key to learning. DEVON: It's key to everything. Like if you don't have a tight feedback loop, you're just not really going to improve I think, and you're actually very likely to do things that aren't purely for signaling that you care as opposed to actually doing the right thing. DAVID: Go off on that because that's an idea I haven't explored. DEVON: Yeah. Officials in the US tend to do grandstand a lot, at the federal level. And the reason for this is because they don't even really know if they're having the impact they want to have or that their constituents want them to have. The only real information that people get on both sides is like what someone said, even after the facts, even a decade later, it can be very difficult to draw any meaningful causality stemming from a particular leader. I think that's true in any organization ever. Even as small as a single person organization. You can't do randomized controlled trials on like everything or almost anything. But the problem just grows in scale to a huge extent as you get bigger. I think if you can keep it to a smaller size, it's like, well, you either did your job or you didn't. And the problems are much more manageable, the relationships are less opaque. It's just a much more transparent system overall. DAVID: Totally. So, I mean, for me what's been really interesting is in New York studying art decor, one thing that I love about architecture is I've been thinking about this idea a lot, where a lot of history is sort of subject to the narrative fallacy where it's written by the winners and the really good book on this is The People's History of the United States by Howard Zinn. He admits that it's biased, but he tries to tell American history from the perspective of the losers. And if you have a generic understanding of American history, you're going to get so many ideas pumped into your head that are totally different. So what's really cool about architecture is, if you look at something like the Chrysler building and at the very top of it and in the lobby and sort of the birds hanging off the side, you know, 60 feet below the top of the building, you can see this like technological enthusiasm, this almost sense of like a utopian spirit that technology in the twenties and the roaring twenties was going to come and save the world. And through the architecture of New York, you can really understand the city in a way that understanding history might not allow you to do. DEVON: Yeah. And I think it's especially interesting to see how buildings change over time in reaction to that original time when it was created and how they shift. I think the moment when I really became aware of the importance of architecture was in my very first job, we started out in this very small office that was cozy and like my desk was far away from the restroom and the kitchen. So when I wanted to take a break, I'd have to walk past everyone and I'd have like a little conversation and I felt very positive about all my coworkers and I feel like we had a really good rapport. About halfway through my time there, we moved into a totally different building. It was supposed to be fancier, it was nicer by everything you could put on paper. But the shape of the rooms was super messed up. Basically, everyone was very close. It was more like a doughnut where like all of the good stuff was in the center and good stuff, meaning, like the kitchen. And so you didn't have to walk past anyone to go see it, which was kind of nice if you're focusing on a problem or you want some alone time, there are pluses to that, but you don't end up having these interactions. And as a result, I almost immediately started feeling like the only people I knew in the company were my team and a lot of the work that I was supposed to be doing was cross-functional. So this made me significantly worse in my job just immediately. Now, of course, this doesn't stop you from having coffee with a coworker and the sales team or something or organizing something with the product team or you know, inviting them to sit at your table at lunch. But these micro-interactions are really critical for building that rapport, for making, keeping people on context. I almost felt like I was a remote worker, and I don't mean to insult remote work. I think that there are huge pluses to that, but it's really undercut the benefits of being in the office as soon as we moved into this new place. DAVID: It's funny because I feel like so much of architecture now, we place such an emphasis on the outside of a building what most people see. But I don't know that we have the same sort of rich discussions about the experience of actually being somewhere. And I guess the example that comes to me is natural light. Like I value natural light in indoors just to such a high degree. It's like the number one thing that I care about in a building, but so often we look at the outside of buildings, so we say, oh that's beautiful. It looks great in a photo, but the experience of being inside of it, I don't actually know that the incentives are aligned for architects to think about that. DEVON: I agree. I mean if you have ever spent time looking for an apartment on Craigslist or a place on Airbnb, actually everything and I'll explain that later. But on craigslist it's like it tells you the square footage, it tells you how many rooms, how many bathrooms there are, which are obviously important details, but it does very little to describe features like natural light and things that make you actually happy, how livable it is. I think part of the problem for this is that it's a much harder thing to commoditize, which means that like it's harder to measure. It's harder to compare two things, there's not a strict measure that you can really use. But it really matters. It really matters a lot. The experience of being in a place is totally different from the way people will often describe a room, at least in describing a room in comparable terms. I think maybe it seems possible. Maybe someone just needs to build a vocabulary for it. DAVID: Okay. Let's play a little game. So if you had to take five metrics for deciding a house on Zillow, right? We have rooms square foot, but if you had five metrics that don't exist right now, what would it be? You do some, I do some. DEVON: Okay. I kinda like this, I'm thinking of it sort of like the, you know, the big five personality. It's kind of like that. DAVID: So you get three, I get two. DEVON: Let's see, I'd say flexibility. Like how much can you change the space to fit your own needs? Is it like very tightly custom designed? The purest example of this would be like the cabinets are built into the walls so you can't move the cabinets. Versus like a lot of ability to move stuff around. DAVID: Mine is the density of power outlets. Most houses don't have nearly enough. DEVON: Oh my god. The computer science building at Stanford has almost no power outlets, which is insane because you go there for the office hours and you know, everyone's there for hours and hours and hours and everyone's computer starts dying around hour three and there's one power outlet and the whole building. Yeah, that needs to change. DAVID: Here's another one. Where I really like houses where the rooms are super private and the open spaces are super public. So you have the kitchen, the living room, the dining room, all sort of in the same room because at the houses that I grew up in, the kitchen was always separate from the dining room. And so whenever we would cook as hosts, It was always sort of awkward because you sort of had to choose. Whereas you get this awesome communal vibe, but I think it really helps with family dynamics if all that is sort of in the same room and it has really good natural light and there's a nice ambiance in there because then people can cluster there. But then you balance that with like the privacy of the rooms. DEVON: I'll expand that one to like the ability to pass through. So in the house I live in right now, it's very hard to get to the backyard. DAVID: Yeah, describe this house because it's actually really cool. It's a commune with 10 people, but like really intelligent people here. DEVON: We call it an intentional community because commune has a lot of economic implications that probably don't apply. So I'm one of 10 people who live in this house. We're actually expanding to an upper floor and it'll be 16 soon. And we're just a group of people who we all care a lot about, having really easy relationships and what that means is I think a lot of the most meaningful and happiness-inducing experiences and interactions that you'll often have will be these little micro-interactions. It's very similar to what I was talking about with my old office. Where if it's really expensive to meet up with someone and hang out with them, it takes money, time, and energy. You have to have to call them, which seems like not a big deal. But here's an intention that's necessary therefore it to happen. You're only going to become close with people where you have an explicit reason to do so. Like sort of a motive almost. Whereas if you're just in the same place, this is why people love college so much. If you're just in the same place with a lot of people who are energetic, motivated, ambitious, like these amazing things will happen where you'll just bump into each other throughout your day and like amazing things will happen without intention and I think that's amazingly valuable and really easy to undervalue. DAVID: You make a really good point because that's almost in a place where that's not the case. Having relationships where you meet somebody right away is almost the mark of a good friendship. It was Saturday night, 11:00 PM a couple of weeks ago. My friend calls me and he goes, what are you doing right now? And it was the first time that happened to me in New York, but it was this like moment in our friendship where in order to do that. Like that happened all the time in college. Like that's college 101. Oh, what are you doing right now? But for it to happen in New York? First of all, was like shocking to me and second of all it was like this mark of our friendship where to get there with somebody takes so much more work because of the way that New York is built and that happens daily in this house here, which I think is really cool. DEVON: It's amazing. I mean, it's amazing you say that that's the case in New York because New York is probably one of the best places in the entire US for this. Like in the opposite sense of what you're talking about. Now imagine if you guys lived in Irvine, California or a far-flung suburb of Salt Lake City or something comes up for you to meet up with this person. Like right now it's just, you jump on the subway, you're there in a few minutes. Not that big of a deal. In those places, you have to like get in your car. Maybe you have to get your snow boots on. You can't get drunk and go home, which is also a good way to bond with people. Also, when you arrive, it will likely just be the two of you, probably no one else was invited, whereas like in a city, maybe you meet up at a bar where there's like a bunch of other random people around you who ended up being really interesting. Actually one of my closest friends. I met like at an event at the MoMa, and just because we like bumped into each other at a mixer afterward. That wouldn't have happened if we weren't in the city. You don't have things like the MoMa in far-out suburbs. And so this is like another example of not just architecture but the general built environment, having dramatic effects on the way you actually interact with the world. DAVID: So let's play another game. If you were to take, I gave you three, we're just going to do metrics again, three metrics or three data points that you could pick and you're going to choose where you live, the house that you lived, a location, what city, what the house looks like, what would the three that you picked be? DEVON: That's a good one. One would be, how long does it take for you to walk from where you live to like your top 10 favorite locations in the city? I think if the answer is a long time and especially if the answer is like you can't even walk there, that's not a good sign for me. Now I don't mean this to be normative for everybody. Other people do have other preferences. Some people want to like go on a big ranch in Idaho and like never see another human. Again, totally not my type but good for them. I'm not saying it's the case, but for me it's very important that I can walk places. I think the reason for this is because walking is a way to interact with your community in these small ways every single day where I think the way people get comfortable in a place in a social group is not through just like one really intense interaction, but through a bunch of smaller ones where you sort of see things from different angles you experienced, you know, what does my neighborhood looked like on a rainy day, what does my neighborhood look like when it's a cloudy day, what does it look like when I'm kind of tired? And these sound like tiny, trivial differences. But you can understand much better how things function. Maybe usually on a sunny day people will like to sit outside at Maxfield's coffee down the street, but on a different one, people sort of tuck inside and it has this closer vibe. You get to know the vibe just much better and you end up meeting people that you probably wouldn't meet if you were in an uber going from point A to point B all the time. So walking is one. Another one would be if for random and sort of once in a while type things like I had to get a necklace fixed the other day, how easy is it for this to be a part of your daily routine? So is it like you have to drive like way out of your way and find some really specialty store to do it? Or like what I did, I was able to walk two blocks away. There's a little jeweler who was able to fix it in three minutes and I walked back and that was like not even my whole lunch break. That was just a little pause in the middle of my day. I grabbed coffee on the way and I came back and up until that point, I had no idea that jeweler was there and we had a nice conversation. But it was just right there. And I love that my whole community can be inside of this little circle. Number three. DAVID: I'll give you my three real quick. So my first one would be natural light, as I've said many times before. That's super important to me. The second one, yours is walking, for me, it's like not having to use a car. So I actually sort of like taking public transportation so I just don't like driving and I don't really like being in cars. So those are the two. The third one would be I like being able to walk, especially to food. Like at my old apartment I was super close with everyone who worked at the bagel shop and I'm pretty close with all the ladies who work at maya taqueria, my local taqueria. And the last one would just be a high density of super intellectually hungry people, which for me is why I've chosen to live in New York. DEVON: Oh, I see. So we can expand this beyond built environment. I would definitely make that my third one as well. This is why I'm in San Francisco, New York maybe is a good choice too, but there is just always someone I can talk to about whatever crazy idea I have going in through my head or is going through their head any given day. I find not everybody here necessarily wants to discuss these ideas, but by using twitter you can actually find these people and like create this strong core where I've basically tricked my brain. The thinking that like everyone around me is just this crazy monster of ideas, continually coming up with new things. There's so much intersection of like different types of people doing work in the city. Everything from like researchers to engineers to entrepreneurs to artists. And unfortunately, fewer these days, as a city gets more expensive. And they're all just mixed together in this pretty small city where you can always find them. But then I think the important component is you also have to have some tools that sort of overlay this to help find them. Just walking around the city. Like I was talking about before, won't surface all of these people and you also are less likely to get outside of your current network if you just stick in your small neighborhood. DAVID: Let's do a quick fire round. So I'm going to ask you like five, six questions and try to keep your answers to like 30 seconds or less. Why do you love Stewart Brand so much? DEVON: He is a polymath. A lot of people take crusades on things. They pick one idea and they just drive it for years and years. Stewart takes hundreds of ideas and makes them all good and is still able to keep a really strong sense of identity despite not having like one thing that he ties himself. DAVID: So I have a theory that personality will end up being almost like the last mode and that sort of so much of what's happening in society right now is like brands are sort of disappearing where many people have less likely to have a favorite brand. But I think that the internet has made it really easy to connect with people. And Stewart Brand is always sort of been a pioneer of technology and I think that people can move around and explore different things through their personality in ways that institutions can't. And I think that that's really helped somebody like Stewart Brand. I don't actually think that focusing on the same thing is like a vector that really matters when it comes to consistency with a person. DEVON: I think that's true. And I think Stewart and Tyler are two fantastic examples of this being 100 percent possible. I think that most people don't realize that and they think that they have to pick one thing and so that you see th

BankBosun Podcast | Banking Risk Management | Banking Executive Podcast
BOLI, Part 1: The Early Years, David Shoemaker, President, Equias Alliance

BankBosun Podcast | Banking Risk Management | Banking Executive Podcast

Play Episode Listen Later Jun 18, 2016 26:05


Introduction: Kelly Coughlin is CEO of BankBosun, a management consulting firm helping bank C-Level Officers navigate risk and discover reward. He is the host of the syndicated audio podcast, BankBosun.com. Kelly brings over 25 years of experience with companies like PWC, Lloyds Bank, and Merrill Lynch. On the podcast Kelly interviews key executives in the banking ecosystem to provide bank C-Suite officers, risk management, technology, and investment ideas and solutions to help them navigate risks and discover rewards.   And now your host, Kelly Coughlin.   Kelly: Good morning. This is Kelly Coughlin. I've got David Shoemaker on the line. We’re going to do a podcast with David. He's the President of Equias Alliance.   David: Good morning.   Kelly: Good morning David. How you doing?   David: I am well.   Kelly: Just to kind of lay the foundation here I thought we’d talk very briefly about my relationship with David and Equias. As David knows, I'm a CPA. I've been in the investment and banking ecosystem for many years and as part of a consulting gig about a year and a half ago I came across the BOLI industry, the bank owned life insurance industry, and then Equias Alliance. I decided at that time, after looking at this asset class, that this is a space I wanted to get into. And I looked at the competitors, once I decided I liked the product, and decided who are the competitors, Equias, in my mind, rose above everybody else out there.     It wasn’t just me that thought that. I believe American Bankers Association selected Equias as their endorsed vendor. I think another dozen or state banking associations also selected them. Is that a fair statement?   David: Ten of them.   Kelly: Ten, clearly they emerged in my mind and in other’s mind as the key player out there. I met with David and I found him to be a key player in the industry, so I thought I'd do a podcast disclosing that I have an independent consultant relationship with David’s company, Equias. I thought we’d do a podcast and talk about first of all just give us a brief background on who you are, how you got into this space, some background and then we’ll talk about the product generally and how you got into this space and what your take is on that. You want to kick it off with some brief bio on who you are?   David: I graduated from the University of Tennessee, Knoxville with a Bachelor of Science in Business Administration, with a major in accounting, then worked for Deloitte Touche for nine years and an investment banking firm for three years. Then, while I was in investment banking, one of my clients was looking at an insurance product and asked me to help evaluate it knowing that I was a CPA technical type.     I liked what I saw, but what I didn’t like was that, it had a four percent front-end load charge. I thought it was a good asset class, but if we could get rid of the load charge we could make it very viable for banks to want to use as an asset class. I've been in bank owned life insurance and nonqualified differed comp for the last twenty-seven years now. I've worked with hundreds of banks over that period of time. I live in Memphis. I have a wife and six children. There’s a lot to do on a daily basis just keeping up with the family.   Kelly: All right, taking from your statement that you saw what was going in the market, the four percent front-end load. Let's elaborate on that because my understanding based on discussion with others including yourself is that you were one of the early pioneers of crafting the product offering as it is right now. What was the need in the market at that time? Give us a general year when that was. Then, where was the gap in products available and the products needed by the bank? What did you see at that time?   David: The year was 1989. There were several products available in the market, but they all had loads of between two and four percent. That means if you purchased a million dollars of BOLI asset and you had even a two percent load that was a $20,000 initial reduction of your cash value. You’d have to reduce your earnings and capital by $20,000 per million. I saw that as a hindrance to banks wanting to buy that asset.     So my partner at the time, who was an attorney, and I decided we could go to insurance carriers and see if they could provide a product that had no-loads which would be more viable for a bank. During that process we found that there's more to it than we’d initially understood. The carriers have to pay a premium tax to the state which generally averages about two percent. Then the federal government has a tax called the DAC or Deferred Acquisition Cost tax that effectively costs around a point and a quarter.     Carriers at time were not comfortable with essentially front ending that asset to give a hundred percent credit after they paid the taxes because they would potentially lose the money if the policy didn’t remain on the books. It took a fair amount of discussion and a fair amount of time, but my partner and I were able to convince four carriers to do no-load contracts.     At that time, I guess there were two other firms that we knew of in the business. They were Bank Compensation Strategies who pioneered the business and then there was Benmark. They were the primary players in, it wasn’t called BOLI then, the bank owned life insurance market. The need for it was to find a product that was viable to banks that didn’t have these loads charges and the idea behind it, back in that day, was primarily to fund nonqualified, deferred compensation plans for management and Boards of banks.   Kelly: That was the primary need for the product, not as an investment per se, but to help fund the nonqualified benefit portion.   David: Yes, to maybe take it a step further. There were not really any regs back until 1991 that were clear as to what a bank could purchase and couldn’t purchase. They could not buy life insurance as an investment asset. They could buy it to fund specific needs. A nonqualified, deferred comp plan was widely considered to be one of those specific items that could be funded with life insurance. It was not clear at the time that you could buy life insurance to informally fund health care and 401K and other retirement benefits and group life benefits and so forth.     Even in the first regs that were issued in 1991, bank reg; I think it’s called BC249, essentially said that you can’t buy life insurance as an investment. You can buy it to offset the cost of certain benefit plans. Even then it wasn’t clear whether that covered health care and 401Ks and things like that, so the initial design of bank owned life insurance was primarily for the purpose of nonqualified deferred compensation plans.   Kelly: The regs specifically prohibited it as an alternative investment asset class. Is that mainly because of that front-end charge and regulators didn’t want to see the hit to capital?   David: That was not the reason. They just viewed life insurance as not a normal asset for a bank from an investment standpoint. It was for specific purposes, but not considered to be an investment in the same terms as Treasury’s and agencies and municipal bonds.   Kelly: Now, that has changed since those early years correct that regulatory perspective?   David: Technically no, in 1996 there was a guidance issued under OCC96-51 which specifically gave authority for a bank to buy life insurance to informally fund retirement benefits and health care. So even today you can't buy life insurance purely as an investment. You have to purchase it from a regulatory standpoint to offset and/or recover the cost of employee benefit plans.     For instance, if a bank had no employee benefit plans; if they weren’t providing health care or 401K’s or retirement plans or nonqualified plans, they really could not buy life insurance and hold onto it until the death of the insured because they would not have a valid reason under the regs to buy that life insurance.   Kelly: They could only buy like Key Man life insurance.   David: They could buy the Key Man, but when that Key Man would leave the bank they’d have to surrender the policy because there was no need for it once that key man left.   Kelly: A bank does not have to have a nonqualified benefit plan. It could just have any sort of benefit plan. It could be health insurance. It could be 401K, any sort of benefit, correct?   David: That's correct, as long as they're providing employee benefits. From experience, if a bank provides health care coverage typically the cost of health care in today’s market is so high that health care alone is enough to justify buying bank owned life insurance generally up to twenty-five percent of capital.   Kelly: Right, so do you see BOLI as primarily an alternative asset class or an insurance product with investment benefits or does it kind of depend on what the needs of the bank are?   David: I would say it depends on the needs of the bank. I'd say it probably leans more toward the alternative asset class in that you look at the features of bank owned life insurance as a tool to produce earnings that would help the bottom line and help recover employee benefit expenses. BOLI has features that are attractive from that standpoint.   Kelly: As an alternative asset class, and I know you and I've had this discussion offline a couple times, if you consider the investment features as an alternative asset class what asset class does BOLI compete against best or worst I suppose? Where do you think, if you were a bank and they liked the features and benefits of BOLI and they need as a replacement. What asset do you think it replaces best MUNI’s, agencies, loans? As I see it, it could be a loan to an insurance company. Where do you see it?   David: It's hard to say that BOLI replaces any particular investment because the features are different than all the other asset classes that are traditional for a bank. If you go down that path and talk about, for instance, BOLI versus MUNI’s there is some common characteristics in that they both have income that's not taxable that helps produce generally higher returns than most taxable asset classes.     There are a lot of differences in those two asset classes, for instance, MUNI’s generally have a fixed rate interest rate, whereas BOLI is an adjustable interest rate. The credit quality of both are high. The BOLI carriers tend to be large, very well-known, highly rated carriers, so very strong credit quality. BOLI has no mark to market in the asset, that in reporting periods whereas municipal bonds generally have to do a mark to market of capital through the OTTI adjustment. BOLI essentially doesn’t have a diminution of value when rates rise whereas municipal bonds could.     Now, from the value of municipal bonds relative to BOLI is that it's always tax-free rather than tax deferred. BOLI’s tax deferred technically, but if held until death its tax free. If you surrender a BOLI contract before maturity, before the person dies, you have a tax liability for the gain plus an extra ten percent for the it’s called a modified endowment contract penalty. BOLI effectively has minimal liquidity from the standpoint of once you buy it you intend to hold it until death, because you don’t want to incur the tax liability.     Whereas a municipal bond if you decided to sell that you would still retain all the income that you've earned to that point tax free. Sometimes banks put municipal bonds in the hold to maturity buckets so they can't really sell the bond; it becomes an illiquid asset for them as well. There's some pros and cons to each, but BOLI does hold up well generally considering the pros and cons of it to any of the asset classes.   Kelly: But, especially MUNI’s.   David: Yes, I think from that standpoint rather than one versus the other it might be some combination of the two for diversification.   Kelly: From my perspective, I see MUNI yields to get higher yield you have to extend duration, so you look at the risk of extending duration versus investing some assets in bank owned life insurance. I've only been doing this for a year now. It’s seems that like half the banks have BOLI on the balance sheet and half don’t.     From my perspective, it's kind of a CPA, risk manager, investment person I don’t really see why a bank wouldn’t max out their twenty-five percent of net capital. Now, that sounds pretty self-serving I know, but in your experience what's the single biggest reason for a bank to not include BOLI in its assets class, because there certainly is a reasonable amount of bias and hesitancy for Boards and CFO’s to get BOLI. What's the single biggest reason that you see for a bank to not include it in their asset class?   David: The stats on BOLI are that sixty percent of the banks across the country have BOLI and forty percent don’t. For banks over a hundred million it's about two-thirds that have BOLI and one-third that don’t. It’s fairly common for banks above one hundred million to have an investment in bank owned life insurance. For those that don’t, it generally falls into one of two to three reasons.     Probably the most prevalent is a bank that has high loan demand. The bank wants to make loans to its local market because that helps build franchise value. If they have high loan demands, say their loan to deposit ratio is over a hundred percent, they may not have the liquidity to hold BOLI at the current time. All their attention and all their liquidity is going into making loans. While BOLI competes with loans well on the yield side, the tax equivalent yield side, banks tend to want to have loans for building the franchise value versus owning bank owned life insurance. If they have the option, they're going it put it into loans rather than BOLI assuming they feel comfortable with the credit quality of those loans. That's probably the biggest reason.     Number two is that some banks don’t fully understand the asset, haven’t taken the time to fully understand it. The pros and cons and features of BOLI is not traditional with a lot of banks. There's this uncertainty about something that's not traditional. They may think “We haven’t done that before and I don’t want to take the time to learn pros and cons.” Maybe they’ve had a presentation and it wasn’t presented in a way that made it clear what the pros and cons are. They maybe saw it as too much of a sales push instead of laying out all the pros and all the cons kind of thing.     Keep in mind that for BOLI to be approved by a bank it generally requires a hundred percent agreement, meaning you must have the CFO of the bank, the CEO of the bank and usually everybody on the Board to be in unison that they want to buy BOLI. You can have one person dissent out of ten, for instance, and that could keep it from happening.   Kelly: Why is unanimity required?   David: It’s not required. It's just generally the way it is. First off, if you don’t have the CEO and CFO on board it probably won't go to the Board. You need both of them. The Board, they normally just don’t want BOLI to be something that causes dissention among the Board members. That's not always the case, but typically they need all Board members or at least eighty to ninety percent approval before they would invest in the asset. I haven’t really run into it, but I don’t think you’ll see BOLI being approved on a five to four vote.   Kelly: Yeah, but that would be true with just about any asset class. Let's say the bank wanted to, the CFO proposed extending duration. Don’t you think that unanimity would be expected or the same standard would be expected for that decision to extend municipal bond duration versus like in a BOLI decision?   David: Yes, I would think so. On investments they have their investment policy that's been approved by the Board and that decision would have to be made within the investment policy about extending duration. Yes, I would think you would need a very high approval rate of the Board members before you would change the investment the policy to do something that effectively increases the risk.   Kelly: Do you see BOLI as being subject to…say within the scope of the banks investment policy in your experience?   David: No, BOLI has its own policy. One of the requirements under the regs is that you have to have a BOLI policy before you can purchase it. You would establish a bank owned life insurance policy; in a sense it's an investment policy for BOLI all to its own. It explains within the policy the bank’s view of BOLI; the percentage of capital that the bank would be willing to purchase; the percent to any one carrier; the due diligence that would be done before purchase; carrier selection; vendor selection. How would they go about deciding which carriers, which vendors and so forth? That all has to be documented in a policy before the bank can even go about purchasing a BOLI product.   Kelly: The bank either includes that as a chapter within the investment policy or they have it as its own separate investment policy.   David: I have pretty much only seen it as its own separate policy. If they include it within the investment policy it would be its own chapter. It's fairly lengthy. It's usually ten - fifteen pages of policy all to itself.   Kelly: How has the industry changed since the early years?   David: In the early years, I guess from a salesperson’s standpoint the hard part was to get a bank to talk to you about BOLI because it just wasn’t common and owning life insurance as an asset was not normal. It was outside the box and a lot of bankers didn’t want to discuss doing something that was outside the box. The biggest hurdle was getting the audience.     Today, most banks know about BOLI so they've heard about it and they have had many, many sales calls about it. Other banks they know have purchased it, so they understand at least the term and what it is. Now, there are just a whole lot of sales calls from insurance sales folks asking about BOLI. They're aware of it. It's just very, very competitive and maybe difficult for the bankers to understand the difference in firm A versus firm B.     The other way that's changed, when I started doing this the only products available were what's called general account products where the carrier provides a universal life insurance product or some whole life products that have an interest rate or dividend rate. Then the main risk to the bank was a carrier’s credit whether the carrier would be able to pay the claim later. Today, you have not only general account which are still very popular, but since then there's been a lot of purchases of what is called hybrid separate account products and also variable separate account products.     Variable separate account products are where the assets are segregated from creditors somewhat like a mutual fund. The bank can choose to invest the money within a particular investment bucket; although, for a bank it as to be eligible investments unless it's used as a hedge against a deferred comp plan. Those have some higher risk features, a little bit more moving parts. They have a stable value wrap sold by a registered product or private placement memorandum and so they're more complicated. Most community banks shy away from those because of the complications and the mark to market within the portfolio.     Then, there's a hybrid separate account product that has features very much like a general account. It has an added credit enhancement that if the carrier were to ever become insolvent the assets within the separate account by legal definitions are segregated from creditors of the insurance carrier so that those assets would only be available to the policy holders. These new asset classes have been pretty popular and have essentially enhanced the options for banks to buy bank owned life insurance.   Kelly: The first generation of BOLI was the general account, no-load product and then the second generation would be some of these the hybrid accounts and some of these more sophisticated product structures. But the core concept was the same, right?   David: That's correct, basically similar structure from a standpoint of no loads, no surrender charges, single premium, just a difference in the chassis if you will.   Kelly: Right, the risk sharing to a certain extent, right, because was the separate account available back then in the early years?   David: You could buy a separate account that was called variable universal life. It was a shelf product, but banks really didn’t buy it then because you had mark to market. Say it was all in a bond fund but the interest rates went up and the value of the bond fund went down five percent you’d have to take an immediate mark to market on your balance sheet and income statement. That was not very attractive to a buyer. If you're a bank you don’t want that kind of volatility on your income statement.   Kelly: Even though that's the nature of a municipal bond portfolio, they have to mark those.   David: A municipal bond portfolio they mark to market, but not through the income statement. They mark to market through the capital account.   Kelly: Right.   David: It doesn’t flow through income.   Kelly: Right.   David: Whereas if you were to do the same thing in a variable universal life insurance contract and have that mark to market risk you’d have to mark that through your income statement because the cash value is changing.   Kelly: One of the things that I noticed about Equias, again this sounds somewhat self-serving, but I’ll say it anyway. This relates to the industry changes. When I see Equias, it just seems to be a highly professional organization. I think eighteen consultants and thirty some support personnel and I believe seven CPAs and a bunch of attorneys, MBA’s that kind of thing. It just seems that one of the things that appears to have happened with Equias having emerged as the key player is the element of professional consulting capabilities versus I would suspect in the early years, and currently, many of potentially our competitors, it's mainly a bunch of insurance guys, right, trying to sell product?  I would think in the early years that's what it was all about, insurance guys trying to sell insurance to a new market…banks.   David: Yes, there was a lot of that. The business model that Equias developed was this is not an area that banks have a lot of expertise in and that they need support services so that they can spend a minimal amount of their time dealing with the technical stuff and don’t have to pay a lot to CPA firms and law firms to help them through the process.     We set up the firm with the idea that we could provide those services at costs that are competitive with anybody in the marketplace. Through volume we could provide more services and all the technical services that a bank would need, but do it in a very cost effective way. That’s where we actually have eight CPAs and two attorneys and a former OCC regulator, former bankers, bank directors, and a former head of the BOLI area for one of the major insurance carriers.     We've staffed our firm with very, very experienced, competent, technical people including the consultants are all very experienced, so that we could be a real asset to the banks. It'd be hard for our competitors to match our knowledge and experience and to duplicate what we can do.   Kelly: One of the things that got my attention was I think you're one of the few that has a SOC 1, Type 2 audit. Not many insurance “agencies” have that kind of thing going on. That was a good plus in my mind with you guys.   David: Yeah, it covers our implementation process, as well as our administration process, and covers not only the BOLI side of it, but covers the nonqualified benefits side. We’ve set up internal controls when we established the company and we followed those controls. We've been able to go through the audit process very efficiently and effectively.   Kelly: I’ll probably be criticized for this being an infomercial for Equias, but what the heck. That's what we can do. All right let's finish with one final thing. I’ll give you the choice. This is a question I ask every guest either your favorite quote or, what I like the best, is tell us what one of the stupidest things you’ve said or done in your business career.   David: One of the early days in my career I remember having gone to this bank to explain BOLI and the nonqualified plans probably for the seventh or eighth time. Some of the Board members were wearing out with me coming back almost it seemed like every month. One of the Board members, who was an attorney, when I came back this time she just looked and “Oh no, not you again.” I said, “Yeah.” She said, “Look, if I vote for this, does that mean you won't come back and you'll leave us alone?” I said, ‘You’ve got my word on that.” I guess in that case persistence paid off.   Kelly: It's good, yeah.   David: It wasn’t one of those real positive “I'm glad to see you” kind of moments.   Kelly: That's right; you got the deal done though.   David: Yeah, I was able to get it done through persistence, not through the sales process really.   Kelly: Yeah, that's good. All right, David, thanks for your time. I appreciate it.   We want to thank you for listening to the syndicated audio program, BankBosun.com The audio content is produced by Kelly Coughlin, Chief Executive Officer of BankBosun, LLC;  and syndicated by Seth Greene, Market Domination LLC, with the help of Kevin Boyle. Video content is produced by The Guildmaster Studio, Keenan Bobson Boyle. The voice introduction is me, Karim Kronfli. The program is hosted by Kelly Coughlin. If you like this program, please tell us. If you don’t, please tell us how we can improve it. Now, some disclaimers. Kelly is licensed with the Minnesota State Board of Accountancy as a Certified Public Accountant.   Kelly provides bank owned life insurance portfolio and nonqualified benefit services to banks across the United States.  The views expressed here are solely those of Kelly Coughlin and his guests in their private capacity and do not in any other way represent the views of any other agent, principal, employer, employee, vendor or supplier of Kelly Coughlin.  

Richard Vasquez Podcast
139.ILikeYou.ParadiseGarageSelctions:AllVinylMixBy:RichardVasquez.aka.Dr.LoveMB

Richard Vasquez Podcast

Play Episode Listen Later Jun 26, 2014 77:48


Tracklist #139 1.ILikeYou - PhylissNelson.ShepPettibone 2.Music - DTrain.FrancoisKevorlian 3.WhoIsHe – CreativeSource 4.Brah - Cymande 5.Pipeline - BruceJohnson.CurtBecher 6.RubyBaby – DonaldFagen – 7.WhereDoWeGoFromHere - Trammps (Atlantic) 8.TheMoreIGet - TeddyPendergrass 9.MySweetSummerSuite - B.White 10.CrankItUp – PeterBrown 11.UseItUpWearItDown- Oddyssey 12.WhenYouTouchMe - TaanaGardner RollingStone interview by Nick Murray May 9, 2014 4:10 PM ET When the Paradise Garage opened in 1977, it became — to quote DJ David Depino — the city's first "underground club," and its house DJ, Larry Levan, became a local superstar, mixing, blending and selecting records as no one had before. In advance of Sunday's block party outside the Garage's old Manhattan home and concurrent with a petition to rename that block as Larry Levan Way, Rolling Stone talked at length with three of Levan's alternate DJs — the aforementioned Depino, Joey Llanos and François K — about the impact of the club, the music that was played and memories of friendships with Levan. You were at the Garage since day one, right David? David Depino: Yes, since day one. I actually found the space. Can you tell me about that? Depino: I was friends with this DJ, Mario, and we worked together in this club in Brooklyn called Broadway. And Mario was Larry's boyfriend. And the first time I met Larry, Mario and I looked a lot alike. So from behind, he thought I was Mario when he came to this club and put his hands over my eyes and went, "Surprise!" And when I turned around he went, "Oh my god, I'm sorry. I thought you were Mario." So we hung out that night, talking. We went out to breakfast after the club closed, and he was talking about looking for a space. I told him I had gone to a club that was only open for a very short time. It was in between Christopher Street and Canal Street when I used to drive home to go to Brooklyn. I don't know exactly where. So the next time I was in the Village, I weaved up and down the side streets until I found it. And I gave Mario the address to give Larry, and he gave it to Larry, and Larry told Michael Brody, who I didn't know, about the space. They called up the real estate. And then before I know it, Mario told me they took it, Larry and Michael. And Mario was supposed to be the DJ on Friday and Larry was supposed to be the DJ on Saturday. But by the time they started the construction parties and everything, Mario and Larry went their separate ways. And I visited and Larry remembered me, and we started to be friends. Did the club arrive fully formed? Depino: The opening night was a disaster 'cause there was the big blizzard and the sound system arrived late. So by the time the sound system was hooked up and they were getting it ready to go, the club was supposed to open midnight. It didn't open till 2 o'clock in the morning. Everyone was on line freezing brutally with mountains of snow, and they we are all so upset that they never came back. François K: Remember maybe to mention that opening was really much after the unofficial… Depino: Oh right, they had construct parties for about a year in '76. There were four or five construction parties within a year. Maybe six. And that gave them the money to finish the rest of the club. But when it officially opened in January of '78, it was a disastrous opening, and Saturday took several years to build back up. Fridays were pretty good from the very beginning. What was being played at this time? Joey Llanos: I can tell you about the first time I learned about François. I knew about François, but I started paying attention to François because I was working security there. I was an electrician by trade, but I got the job as one of the bouncers and a night that sticks out in my mind was when François was doing the guest appearance at the Garage and he played — it was in the middle of his set, the room was packed, and he put on "And I Am Telling You I'm Not Going," that ballad from the Dream Girls, Jennifer Holliday track. And the whole room went insane. So that's when I discovered François. I said, 'Let me pay attention to this guy.' Then I found out he did [French disco band] Martin Circus, and that made me fall in love with him even more. Go ahead François, you wanted to say something? François K: I clearly, distinctly remember going to one of the construction parties in the fall of 1977. A friend of mine who I was working for at a club called New York, New York brought me there. He was also the guy who quit DJing at the Continental Baths, and just decided he was going home because he had enough of that. And they turned around to the light man, who was a dude named Larry Levan, and they told him to take over with the records. So that guy, Joseph Bonfiglio took me around to a new club that was opening. I remember it being in the back room and that it was pretty much the hottest party I had ever seen, even if it might not have been as fancy as some other clubs or as well put-together because they were still in construction. It was so strong — the energy was so powerful. It was so immediately obvious that this guy Larry had a whole different kind of energy going on. He had this real charismatic, driving sound that would just captivate people. It's like if you had a bunch of iron forks and spoons and stuff and suddenly you start putting magnets and everything's oriented a different way, that's what Larry could do to a group of people. It was insane. And that music, it was kind of hard to characterize. He could just as well be playing some Fela Kuti and Ginger Baker or he could playing some rock music. Pat Benatar. Even in those early years, he was favoring a great variety of things, some of which he was pretty faithfully carrying on the legacy of an entire generation of musicians, like old people from Philadelphia, like Teddy Pendergrass and the Jones Girls and so on and so forth. Lou Rawls, the O'Jays, and then there was also that funk sound like BT Express. Joey: If he was upset, you'd hear it in the music. If he was happy, you'd hear it in the music. If he came back from vacation in Brazil, you would hear an hour of Samba music. So you really didn't know, or it would be the Clash or the Police. When did it feel like a Garage sound really emerged? Joey: For me, Larry would make the records. Not that he actually made the record himself or produced it, but if it was a record that he liked, he'd play it four or five times throughout the night and make it a Garage record to where they would line up to a local record store, Vinyl Mania, and wait for it. I guess over the 10 years that that sound just became what people expected, you know? François K: I think the one thing worth noticing is he, Larry, had this ability. Like, let's say a lot of us DJs would be at the record store and picking through all the week's releases and everything. Those releases were whatever they happened to be that week. What was unique was that he really had this way of making that music his. It didn't have to have a specific sound to it; it could be very different things. It could be Italo-disco with a very electronic atmosphere, or it could be something with a real R&B/funk kind of vibe to it. Or it could be something that was very lush and orchestrated, something Ashford & Simpson — like. Or something that was very raw and completely unusual. But whatever it was, he had this way to incorporate that song and he would present it and work it and highlight certain parts of it and sometimes completely change the structure of it with a couple of copies. He would do all that in such a way that he would make the record his. Often times, after a couple of weeks of a new record — something everyone had heard but no one has bothered with — he was the only one who would pick a certain record and immediately, instantly made it his so from that point on, even that when the record came on, it was just another record. On the subject of Larry taking it further, I'm interested in the Peech Boys? I found their tracks on compilations, but I can't find any info on how they came together, how Larry brought them together. David: They were a group named "Snatch"; they were like a rock cover band. My friend, David Lizotta, met Michael de Benedictus one night and brought him to the garage and introduced him to me when he brought him up to the DJ booth, and in turn introduced him to Larry. They started talking and Larry found out he was a keyboard artist and Larry said, "Oh, wow. Do you play this kind of music?" Michael said, "Not really, but I'm loving what you're playing." And Larry was getting ready to do a mix for West End and said, "I need a keyboard player to do some overdubs, " and brought Michael into the studio. Michael did some overdubs and they clicked. And from that, they wanted to make some dance music other than what they did make, which was rock. That kind of started the relationship and the group later became the Peech Boys and the rest was history. Even François played with them, one time, on drums. In the meat freezer, in Michael's loft, his little studio. That was the first time I realized François could play the drums. I had no rhythm, so they gave me the triangle. The production on "Don't Make Me Wait," the way the handclaps echo, sounds almost dubby. Like something you'd be into, François. David: The handclaps were an accident. When they loaded them in, somehow, it went backwards. They were looking for something, and the moment that handclaps came on backwards, Larry jumped up and said, "That's it!" and everybody looked at him like, "What are you talking about? That's a mistake." Larry said, "That's it, that's the hook. People will scream from the first backwards hand-clap." François K: The thing that was truly uncanny about Larry Levan — all geniuses, all really special artists, have this astounding ability to suck whatever it is around them and bring together all these ideas or influences or trains of thought. And maybe people such as myself were favoring sort of an electronic sort of sound, a lot of stuff like that, which was incorporated into the mixes we did because we had a lot of room to do that, but I think he picked up on that right away. You said it took a little while for Saturday at the Garage to pick up? When did what Larry was doing there start to influence the rest of New York? When did people start to catch on? François K: Ten minutes? [laughs] David: I think Larry's relationship with the Garage was sort of symbiotic — the Garage helped make Larry and Larry helped make the Garage. When both of them started happening, record companies heard what he was doing and he started doing more and more mixes and it became the perfect storm. All three: the mixing, the playing, the club. All of them started to blossom at the same time. Larry started to have an effect on people, but he never wanted to or never tried to. Larry was just Larry. As soon as Larry felt he had responsibility, he hated it because he just wanted to play records and have fun and have his friends around him. I remember one night Stevie Wonder came and Larry made him wait an hour and a half before he played his record. And never went over to say hello to him until he was putting his coat on to leave. I said, "Go over and say hello to him!" and he'd go, "I'm playing — I can't be bothered." I said, "It's Stevie Wonder!" He said, "I know!" François K: To me, the thing that was really significant is, as Joey was saying before, the first phenomenon you had was a few record stores in the Village that were specifically open early morning — including Sunday morning — after the Garage closed. And that translated into people like Frankie Crocker, the programmer for WBLS, he would come there and suddenly he would pick up on one of these songs. Now you had this radio station in a major market putting on a song that would not be released for three or four months, and putting it into hot rotation, which means it would be played six, seven, eight times a day. Hundreds and hundreds of people mad at this song you couldn't buy. I remember once, Larry gave Frankie a test-pressing of something and said, "Frankie, this record ain't coming out for another couple of weeks. Please don't play it because the record company already told me." And Frankie said, "Oh, no, I'll wait a couple weeks." The very next day, he played it. We were in my car and Larry put his hand on his head and said, "I'm in so much trouble." David: And Frankie would say, "I heard this last night at the Garage." François K: It had this effect on culture. This was something that was truly a phenomenon. There was nothing you could compare it to. It was this wildfire, powder-keg effect, and we saw it happen in front of our eyes. That's what Larry Levan did. It just spread out not just in the city, but on to England and the rest of the country. Read more: http://www.rollingstone.com/music/news/three-disco-greats-on-larry-levans-life-and-legacy-20140509#ixzz35eliNzCY Follow us: @rollingstone on Twitter | RollingStone on Facebook