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In this episode, James Marriott and I discuss who we think are the best twenty English poets. This is not the best poets who wrote in English, but the best British poets (though James snuck Sylvia Plath onto his list…). We did it like that to make it easier, not least so we could base a lot of our discussion on extracts in The Oxford Book of English Verse (Ricks edition). Most of what we read out is from there. We read Wordsworth, Keats, Hardy, Milton, and Pope. We both love Pope! (He should be regarded as one of the very best English poets, like Milton.) There are also readings of Herrick, Bronte, Cowper, and MacNiece. I plan to record the whole of ‘The Eve of St. Agnes' at some point soon.Here are our lists and below is the transcript (which may have more errors than usual, sorry!)HOGod Tier* Shakespeare“if not first, in the very first line”* Chaucer* Spenser* Milton* Wordsworth* Eliot—argue for Pope here, not usually includedSecond Tier* Donne* Herbert* Keats* Dryden* Gawain poet* Tom O'Bedlam poetThird Tier* Yeats* Tennyson* Hopkins* Coleridge* Auden* Shelley* MarvellJMShakespeareTier* ShakespeareTier 1* Chaucer* Milton* WordsworthTier 2* Donne* Eliot* Keats* Tennyson* Spencer* Marvell* PopeTier 3* Yeats* Hopkins* Blake* Coleridge* Auden* Shelley* Thomas Hardy* Larkin* PlathHenry: Today I'm talking to James Marriott, Times columnist, and more importantly, the writer of the Substack Cultural Capital. And we are going to argue about who are the best poets in the English language. James, welcome.James: Thanks very much for having me. I feel I should preface my appearance so that I don't bring your podcast and disrepute saying that I'm maybe here less as an expert of poetry and more as somebody who's willing to have strong and potentially species opinions. I'm more of a lover of poetry than I would claim to be any kind of academic expert, just in case anybody thinks that I'm trying to produce any definitive answer to the question that we're tackling.Henry: Yeah, no, I mean that's the same for me. We're not professors, we're just very opinionated boys. So we have lists.James: We do.Henry: And we're going to debate our lists, but what we do agree is that if we're having a top 20 English poets, Shakespeare is automatically in the God Tier and there's nothing to discuss.James: Yeah, he's in a category of his own. I think the way of, because I guess the plan we've gone for is to rather than to rank them 1, 2, 3, 4, 5, 6, 7 into sort of, what is it, three or four broad categories that we're competing over.Henry: Yes, yes. TiersJames: I think is a more kind of reasonable way to approach it rather than trying to argue exactly why it should be one place above Shelly or I don't know, whatever.Henry: It's also just an excuse to talk about poets.James: Yes.Henry: Good. So then we have a sort of top tier, if not the first, in the very first line as it were, and you've got different people. To me, you've got Chaucer, Milton, and Wordsworth. I would also add Spenser and T.S. Eliot. So what's your problem with Spenser?James: Well, my problem is ignorance in that it's a while since I've read the Fairy Queen, which I did at university. Partly is just that looking back through it now and from what I remember of university, I mean it is not so much that I have anything against Spenser. It's quite how much I have in favour of Milton and Wordsworth and Chaucer, and I'm totally willing to be argued against on this, but I just can't think that Spenser is in quite the same league as lovely as many passages of the Fairy Queen are.Henry: So my case for Spenser is firstly, if you go through something like the Oxford Book of English Verse or some other comparable anthology, he's getting a similar page count to Shakespeare and Milton, he is important in that way. Second, it's not just the fairy queen, there's the Shepherd's Calendar, the sonnets, the wedding poems, and they're all highly accomplished. The Shepherd's Calendar particularly is really, really brilliant work. I think I enjoyed that more as an undergraduate, actually, much as I love the Fairy Queen. And the third thing is that the Fairy Queen is a very, very great epic. I mean, it's a tremendous accomplishment. There were lots of other epics knocking around in the 16th century that nobody wants to read now or I mean, obviously specialists want to read, but if we could persuade a few more people, a few more ordinary readers to pick up the fairy queen, they would love it.James: Yes, and I was rereading before he came on air, the Bower of Bliss episode, which I think is from the second book, which is just a beautifully lush passage, passage of writing. It was really, I mean, you can see why Keats was so much influenced by it. The point about Spenser's breadth is an interesting one because Milton is in my top category below Shakespeare, but I think I'm placing him there pretty much only on the basis of Paradise Lost. I think if we didn't have Paradise Lost, Milton may not even be in this competition at all for me, very little. I know. I don't know if this is a heresy, I've got much less time for Milton's minor works. There's Samuel Johnson pretty much summed up my feelings on Lycidas when he said there was nothing new. Whatever images it can supply are long ago, exhausted, and I do feel there's a certain sort of dryness to Milton's minor stuff. I mean, I can find things like Il Penseroso and L'Allegro pretty enough, but I mean, I think really the central achievement is Paradise Lost, whereas Spenser might be in contention, as you say, from if you didn't have the Fairy Queen, you've got Shepherd's Calendar, and all this other sort of other stuff, but Paradise Lost is just so massive for me.Henry: But if someone just tomorrow came out and said, oh, we found a whole book of minor poetry by Virgil and it's all pretty average, you wouldn't say, oh, well Virgil's less of a great poet.James: No, absolutely, and that's why I've stuck Milton right at the top. It's just sort of interesting how unbelievably good Paradise Lost is and how, in my opinion, how much less inspiring the stuff that comes after it is Samson Agonistes and Paradise Regained I really much pleasure out of at all and how, I mean the early I think slightly dry Milton is unbelievably accomplished, but Samuel Johnson seems to say in that quote is a very accomplished use of ancient slightly worn out tropes, and he's of putting together these old ideas in a brilliant manner and he has this sort of, I mean I guess he's one of your late bloomers. I can't quite remember how old he is when he publishes Paradise Lost.Henry: Oh, he is. Oh, writing it in his fifties. Yeah.James: Yeah, this just extraordinary thing that's totally unlike anything else in English literature and of all the poems that we're going to talk about, I think is the one that has probably given me most pleasure in my life and the one that I probably return to most often if not to read all the way through then to just go over my favourite bits and pieces of it.Henry: A lot of people will think Milton is heavy and full of weird references to the ancient world and learned and biblical and not very readable for want of a better word. Can you talk us out of that? To be one of the great poets, they do have to have some readability, right?James: Yeah, I think so, and it's certainly how I felt. I mean I think it's not a trivial objection to have to Milton. It's certainly how I found him. He was my special author paper at university and I totally didn't get on with him. There was something about his massive brilliance that I felt. I remember feeling like trying to write about Paradise Lost was trying to kind of scratch a huge block of marble with your nails. There's no way to get a handle on it. I just couldn't work out what to get ahold of, and it's only I think later in adulthood maybe reading him under a little less pressure that I've come to really love him. I mean, the thing I would always say to people to look out for in Milton, but it's his most immediate pleasure and the thing that still is what sends shivers done my spine about him is the kind of cosmic scale of Paradise Lost, and it's almost got this sort of sci-fi massiveness to it. One of my very favourite passages, which I may inflict on you, we did agree that we could inflict poetry on one another.Henry: Please, pleaseJames: It's a detail from the first book of Paradise Lost. Milton's talking about Satan's architect in hell Mulciber, and this is a little explanation of who or part of his explanation of who Mulciber is, and he says, Nor was his name unheard or unadoredIn ancient Greece; and in Ausonian landMen called him Mulciber; and how he fellFrom Heaven they fabled, thrown by angry JoveSheer o'er the crystal battlements: from mornTo noon he fell, from noon to dewy eve,A summer's day, and with the setting sunDropt from the zenith, like a falling star,On Lemnos, th' Aegaean isle. Thus they relate,ErringI just think it's the sort of total massiveness of that universe that “from the zenith to like a falling star”. I just can't think of any other poet in English or that I've ever read in any language, frankly, even in translation, who has that sort of scale about it, and I think that's what can most give immediate pleasure. The other thing I love about that passage is this is part of the kind of grandeur of Milton is that you get this extraordinary passage about an angel falling from heaven down to th' Aegean Isle who's then going to go to hell and the little parenthetic remark at the end, the perm just rolls on, thus they relate erring and paradise lost is such this massive grand thing that it can contain this enormous cosmic tragedy as a kind of little parenthetical thing. I also think the crystal battlements are lovely, so wonderful kind of sci-fi detail.Henry: Yes, I think that's right, and I think it's under appreciated that Milton was a hugely important influence on Charles Darwin who was a bit like you always rereading it when he was young, especially on the beagle voyage. He took it with him and quotes it in his letters sometimes, and it is not insignificant the way that paradise loss affects him in terms of when he writes his own epic thinking at this level, thinking at this scale, thinking at the level of the whole universe, how does the whole thing fit together? What's the order behind the little movements of everything? So Milton's reach I think is actually quite far into the culture even beyond the poets.James: That's fascinating. Do you have a particular favourite bit of Paradise Lost?Henry: I do, but I don't have it with me because I disorganised and couldn't find my copy.James: That's fair.Henry: What I want to do is to read one of the sonnets because I do think he's a very, very good sonnet writer, even if I'm going to let the Lycidas thing go, because I'm not going to publicly argue against Samuel Johnson.When I consider how my light is spent,Ere half my days, in this dark world and wide,And that one Talent which is death to hideLodged with me useless, though my Soul more bentTo serve therewith my Maker, and presentMy true account, lest he returning chide;“Doth God exact day-labour, light denied?”I fondly ask. But patience, to preventThat murmur, soon replies, “God doth not needEither man's work or his own gifts; who bestBear his mild yoke, they serve him best. His stateIs Kingly. Thousands at his bidding speedAnd post o'er Land and Ocean without rest:They also serve who only stand and wait.”I think that's great.James: Yeah. Okay. It is good.Henry: Yeah. I think the minor poems are very uneven, but there are lots of gems.James: Yeah, I mean he is a genius. It would be very weird if all the minor poems were s**t, which is not really what I'm trying… I guess I have a sort of slightly austere category too. I just do Chaucer, Milton, Wordsworth, but we are agreed on Wordsworth, aren't we? That he belongs here.Henry: So my feeling is that the story of English poetry is something like Chaucer Spenser, Shakespeare, Milton, Wordsworth, T.S. Eliot create a kind of spine. These are the great innovators. They're writing the major works, they're the most influential. All the cliches are true. Chaucer invented iambic pentameter. Shakespeare didn't single handedly invent modern English, but he did more than all the rest of them put together. Milton is the English Homer. Wordsworth is the English Homer, but of the speech of the ordinary man. All these old things, these are all true and these are all colossal achievements and I don't really feel that we should be picking between them. I think Spenser wrote an epic that stands alongside the works of Shakespeare and Milton in words with T.S. Eliot whose poetry, frankly I do not love in the way that I love some of the other great English writers cannot be denied his position as one of the great inventors.James: Yeah, I completely agree. It's funny, I think, I mean I really do love T.S. Eliot. Someone else had spent a lot of time rereading. I'm not quite sure why he hasn't gone into quite my top category, but I think I had this—Henry: Is it because he didn't like Milton and you're not having it?James: Maybe that's part of it. I think my thought something went more along the lines of if I cut, I don't quite feel like I'm going to put John Donne in the same league as Milton, but then it seems weird to put Eliot above Donne and then I don't know that, I mean there's not a very particularly fleshed out thought, but on Wordsworth, why is Wordsworth there for you? What do you think, what do you think are the perms that make the argument for Wordsworth having his place at the very top?Henry: Well, I think the Lyrical Ballads, Poems in Two Volumes and the Prelude are all of it, aren't they? I'm not a lover of the rest, and I think the preface to the Lyrical Ballads is one of the great works of literary criticism, which is another coin in his jar if you like, but in a funny way, he's much more revolutionary than T.S. Eliot. We think of modernism as the great revolution and the great sort of bringing of all the newness, but modernism relies on Wordsworth so much, relies on the idea that tradition can be subsumed into ordinary voice, ordinary speech, the passage in the Wasteland where he has all of them talking in the bar. Closing time please, closing time please. You can't have that without Wordsworth and—James: I think I completely agree with what you're saying.Henry: Yeah, so I think that's for me is the basis of it that he might be the great innovator of English poetry.James: Yeah, I think you're right because I've got, I mean again, waiting someone out of my depth here, but I can't think of anybody else who had sort of specifically and perhaps even ideologically set out to write a kind of high poetry that sounded like ordinary speech, I guess. I mean, Wordsworth again is somebody who I didn't particularly like at university and I think it's precisely about plainness that can make him initially off-putting. There's a Matthew Arnold quote where he says of Wordsworth something like He has no style. Henry: Such a Matthew Arnold thing to say.James: I mean think it's the beginning of an appreciation, but there's a real blankness to words with I think again can almost mislead you into thinking there's nothing there when you first encounter him. But yeah, I think for me, Tintern Abbey is maybe the best poem in the English language.Henry: Tintern Abbey is great. The Intimations of Immortality Ode is superb. Again, I don't have it with me, but the Poems in Two Volumes. There are so many wonderful things in there. I had a real, when I was an undergraduate, I had read some Wordsworth, but I hadn't really read a lot and I thought of I as you do as the daffodils poet, and so I read Lyrical Ballads and Poems in Two Volumes, and I had one of these electrical conversion moments like, oh, the daffodils, that is nothing. The worst possible thing for Wordsworth is that he's remembered as this daffodils poet. When you read the Intimations of Immortality, do you just think of all the things he could have been remembered for? It's diminishing.James: It's so easy to get into him wrong because the other slightly wrong way in is through, I mean maybe this is a prejudice that isn't widely shared, but the stuff that I've never particularly managed to really enjoy is all the slightly worthy stuff about beggars and deformed people and maimed soldiers. Wandering around on roads in the lake district has always been less appealing to me, and that was maybe why I didn't totally get on with 'em at first, and I mean, there's some bad words with poetry. I was looking up the infamous lines from the form that were mocked even at the time where you know the lines that go, You see a little muddy pond Of water never dry. I've measured it from side to side, 'Tis three feet long and two feet wide, and the sort of plainness condescend into banality at Wordsworth's worst moments, which come more frequently later in his career.Henry: Yes, yes. I'm going to read a little bit of the Intimations ode because I want to share some of this so-called plainness at its best. This is the third section. They're all very short Now, while the birds thus sing a joyous song,And while the young lambs boundAs to the tabor's sound,To me alone there came a thought of grief:A timely utterance gave that thought relief,And I again am strong:The cataracts blow their trumpets from the steep;No more shall grief of mine the season wrong;I hear the Echoes through the mountains throng,The Winds come to me from the fields of sleep,And all the earth is gay;Land and seaGive themselves up to jollity,And with the heart of MayDoth every Beast keep holiday;—Thou Child of Joy,Shout round me, let me hear thy shouts, thou happy Shepherd-boy.And I think it's unthinkable that someone would write like this today. It would be cringe, but we're going to have a new sincerity. It's coming. It's in some ways it's already here and I think Wordsworth will maybe get a different sort of attention when that happens because that's a really high level of writing to be able to do that without it descending into what you just read. In the late Wordsworth there's a lot of that really bad stuff.James: Yeah, I mean the fact that he wrote some of that bad stuff I guess is a sign of quite how carefully the early stuff is treading that knife edge of tripping into banality. Can I read you my favourite bit of Tintern Abbey?Henry: Oh yes. That is one of the great poems.James: Yeah, I just think one of mean I, the most profound poem ever, probably for me. So this is him looking out over the landscape of Tinton Abbey. I mean these are unbelievably famous lines, so I'm sure everybody listening will know them, but they are so good And I have feltA presence that disturbs me with the joyOf elevated thoughts; a sense sublimeOf something far more deeply interfused,Whose dwelling is the light of setting suns,And the round ocean and the living air,And the blue sky, and in the mind of man:A motion and a spirit, that impelsAll thinking things, all objects of all thought,And rolls through all things. Therefore am I stillA lover of the meadows and the woodsAnd mountains; and of all that we beholdFrom this green earth; of all the mighty worldOf eye, and ear,—both what they half create,And what perceive; well pleased to recogniseIn nature and the language of the senseThe anchor of my purest thoughts, the nurse,The guide, the guardian of my heart, and soulOf all my moral being.I mean in a poem, it's just that is mind blowingly good to me?Henry: Yeah. I'm going to look up another section from the Prelude, which used to be in the Oxford Book, but it isn't in the Ricks edition and I don't really know whyJames: He doesn't have much of the Prelude does he?Henry: I don't think he has any…James: Yeah.Henry: So this is from an early section when the young Wordsworth is a young boy and he's going off, I think he's sneaking out at night to row on the lake as you do when you with Wordsworth, and the initial description is of a mountain. She was an elfin pinnace; lustilyI dipped my oars into the silent lake,And, as I rose upon the stroke, my boatWent heaving through the water like a swan;When, from behind that craggy steep till thenThe horizon's bound, a huge peak, black and huge,As if with voluntary power instinct,Upreared its head. I struck and struck again,And growing still in stature the grim shapeTowered up between me and the stars, and still,For so it seemed, with purpose of its ownAnd measured motion like a living thing,Strode after me. With trembling oars I turned,And through the silent water stole my wayBack to the covert of the willow tree;It's so much like that in Wordsworth. It's just,James: Yeah, I mean, yeah, the Prelude is full of things like that. I think that is probably one of the best moments, possibly the best moments of the prelude. But yeah, I mean it's just total genius isn't it?Henry: I think he's very, very important and yeah, much more important than T.S. Eliot who is, I put him in the same category, but I can see why you didn't.James: You do have a little note saying Pope, question mark or something I think, don't you, in the document.Henry: So the six I gave as the spine of English literature and everything, that's an uncontroversial view. I think Pope should be one of those people. I think we should see Pope as being on a level with Milton and Wordsworth, and I think he's got a very mixed reputation, but I think he was just as inventive, just as important. I think you are a Pope fan, just as clever, just as moving, and it baffles me that he's not more commonly regarded as part of this great spine running through the history of English literature and between Milton and Wordsworth. If you don't have Pope, I think it's a missing link if you like.James: I mean, I wouldn't maybe go as far as you, I love Pope. Pope was really the first perch I ever loved. I remember finding a little volume of Pope in a box of books. My school library was chucking out, and that was the first book of poetry I read and took seriously. I guess he sort of suffers by the fact that we are seeing all of this through the lens of the romantics. All our taste about Shakespeare and Milton and Spenser has been formed by the romantics and hope's way of writing the Satires. This sort of society poetry I think is just totally doesn't conform to our idea of what poetry should be doing or what poetry is. Is there absolutely or virtually nobody reads Dryden nowadays. It's just not what we think poetry is for that whole Augustine 18th century idea that poetry is for writing epistles to people to explain philosophical concepts to them or to diss your enemies and rivals or to write a kind of Duncia explaining why everyone you know is a moron. That's just really, I guess Byron is the last major, is the only of figure who is in that tradition who would be a popular figure nowadays with things like English bards and scotch reviewers. But that whole idea of poetry I think was really alien to us. And I mean I'm probably formed by that prejudice because I really do love Pope, but I don't love him as much as the other people we've discussed.Henry: I think part of his problem is that he's clever and rational and we want our poems always to be about moods, which may be, I think why George Herbert, who we've both got reasonably high is also quite underrated. He's very clever. He's always think George Herbert's always thinking, and when someone like Shakespeare or Milton is thinking, they do it in such a way that you might not notice and that you might just carry on with the story. And if you do see that they're thinking you can enjoy that as well. Whereas Pope is just explicitly always thinking and maybe lecturing, hectoring, being very grand with you and as you say, calling you an idiot. But there are so many excellent bits of Pope and I just think technically he can sustain a thought or an argument over half a dozen or a dozen lines and keep the rhyme scheme moving and it's never forced, and he never has to do that thing where he puts the words in a stupid order just to make the rhyme work. He's got such an elegance and a balance of composition, which again, as you say, we live under romantic ideals, not classical ones. But that doesn't mean we should be blind to the level of his accomplishment, which is really, really very high. I mean, Samuel Johnson basically thought that Alexander Pope had finished English poetry. We have the end of history. He had the end of English poetry. Pope, he's brought us to the mightiest of the heroic couplers and he's done it. It's all over.James: The other thing about Pope that I think makes us underrate him is that he's very charming. And I think charm is a quality we're not big on is that sort of, but I think some of Pope's charm is so moving. One of my favourite poems of his is, do you know the Epistle to Miss Blount on going into the country? The poem to the young girl who's been having a fashionable season in London then is sent to the boring countryside to stay with an aunt. And it's this, it's not like a romantic love poem, it's not distraught or hectic. It's just a sort of wonderful act of sympathy with this potentially slightly airheaded young girl who's been sent to the countryside, which you'd rather go to operas and plays and flirt with people. And there's a real sort of delicate in it that isn't overblown and isn't dramatic, but is extremely charming. And I think that's again, another quality that perhaps we're prone not to totally appreciate in the 21st century. It's almost the kind of highest form of politeness and sympathyHenry: And the prevailing quality in Pope is wit: “True wit is nature to advantage dressed/ What often was thought, but ne'er so well expressed”. And I think wit can be quite alienating for an audience because it is a kind of superior form of literary art. This is why people don't read as much Swift as he deserves because he's so witty and so scornful that a lot of people will read him and think, well, I don't like you.James: And that point about what oft was thought and ne'er so well expressed again, is a very classical idea. The poet who puts not quite conventional wisdom, but something that's been thought before in the best possible words, really suffers with the romantic idea of originality. The poet has to say something utterly new. Whereas for Pope, the sort of ideas that he express, some of the philosophical ideas are not as profound in original perhaps as words with, but he's very elegant proponent of them.Henry: And we love b******g people in our culture, and I feel like the Dunciad should be more popular because it is just, I can't remember who said this, but someone said it's probably the most under appreciated great poem in English, and that's got to be true. It's full of absolute zingers. There's one moment where he's described the whole crowd of them or all these poets who he considers to be deeply inferior, and it turns out he was right because no one reads them anymore. And you need footnotes to know who they are. I mean, no one cares. And he says, “equal your merits, equal is your din”. This kind of abuse is a really high art, and we ought to love that. We love that on Twitter. And I think things like the Rape of the Lock also could be more popular.James: I love the Rape of the Lock . I mean, I think anybody is not reading Pope and is looking for a way in, I think the Rape of the Lock is the way in, isn't it? Because it's just such a charming, lovely, funny poem.Henry: It is. And probably it suffers because the whole idea of mock heroic now is lost to us. But it's a bit like it's the literary equivalent of people writing a sort of mini epic about someone like Elon Musk or some other very prominent figure in the culture and using lots of heroic imagery from the great epics of Homer and Virgil and from the Bible and all these things, but putting them into a very diminished state. So instead of being grand, it becomes comic. It's like turning a God into a cartoon. And Pope is easily the best writer that we have for that kind of thing. Dryden, but he's the genius on it.James: Yeah, no, he totally is. I guess it's another reason he's under appreciated is that our culture is just much less worshipful of epic than the 18th century culture was. The 18th century was obsessed with trying to write epics and trying to imitate epics. I mean, I think to a lot of Pope's contemporaries, the achievement they might've been expecting people to talk about in 300 years time would be his translations of the Iliad and the Odyssey and the other stuff might've seen more minor in comparison, whereas it's the mock epic that we're remembering him for, which again is perhaps another symptom of our sort of post romantic perspective.Henry: I think this is why Spenser suffers as well, because everything in Spenser is magical. The knights are fairies, not the little fairies that live in buttercups, but big human sized fairies or even bigger than that. And there are magical women and saucers and the whole thing is a sort of hodgepodge of romance and fairy tale and legend and all this stuff. And it's often said, oh, he was old fashioned in his own time. But those things still had a lot of currency in the 16th century. And a lot of those things are in Shakespeare, for example.But to us, that's like a fantasy novel. Now, I love fantasy and I read fantasy, and I think some of it's a very high accomplishment, but to a lot of people, fantasy just means kind of trash. Why am I going to read something with fairies and a wizard? And I think a lot of people just see Spenser and they're like, what is this? This is so weird. They don't realise how Protestant they're being, but they're like, this is so weird.James: And Pope has a little, I mean, the Rape of the Lock even has a little of the same because the rape of the lock has this attendant army of good spirits called selfs and evil spirits called gnomes. I mean, I find that just totally funny and charming. I really love it.Henry: I'm going to read, there's an extract from the Rape of the Lock in the Oxford Book, and I'm going to read a few lines to give people an idea of how he can be at once mocking something but also quite charming about it. It's quite a difficult line to draw. The Rape of the Lock is all about a scandalous incident where a young man took a lock of a lady's hair. Rape doesn't mean what we think it means. It means an offence. And so because he stole a lock of her hair, it'd become obviously this huge problem and everyone's in a flurry. And to sort of calm everyone down, Pope took it so seriously that he made it into a tremendous joke. So here he is describing the sort of dressing table if you like.And now, unveil'd, the Toilet stands display'd,Each silver Vase in mystic order laid.First, rob'd in white, the Nymph intent adores,With head uncover'd, the Cosmetic pow'rs.A heav'nly image in the glass appears,To that she bends, to that her eyes she rears;Th' inferior Priestess, at her altar's side,Trembling begins the sacred rites of Pride.What a way to describe someone putting on their makeup. It's fantastic.James: It's funny. I can continue that because the little passage of Pope I picked to read begins exactly where yours ended. It only gets better as it goes on, I think. So after trembling begins the sacred rites of pride, Unnumber'd treasures ope at once, and hereThe various off'rings of the world appear;From each she nicely culls with curious toil,And decks the Goddess with the glitt'ring spoil.This casket India's glowing gems unlocks,And all Arabia breathes from yonder box.The Tortoise here and Elephant unite,Transformed to combs, the speckled, and the white.Here files of pins extend their shining rows,Puffs, Powders, Patches, Bibles, Billet-doux.It's just so lovely. I love a thing about the tortoise and the elephant unite because you've got a tortoise shell and an ivory comb. And the stuff about India's glowing gems and Arabia breathing from yonder box, I mean that's a, realistic is not quite the word, but that's a reference to Milton because Milton is continually having all the stones of Arabia and India's pearls and things all screwed through paradise lost. Yeah, it's just so lovely, isn't it?Henry: And for someone who's so classical and composed and elegant, there's something very Dickensian about things like the toilet, the tortoise and the elephant here unite, transform to combs. There's something a little bit surreal and the puffs, powders, patches, bibles, it has that sort of slightly hectic, frantic,James: That's sort of Victorian materialism, wealth of material objects,Henry: But also that famous thing that was said of Dickens, that the people are furniture and the furniture's like people. He can bring to life all the little bits and bobs of the ordinary day and turn it into something not quite ridiculous, not quite charming.James: And there is a kind of charm in the fact that it wasn't the sort of thing that poets would necessarily expect to pay attention to the 18th century. I don't think the sort of powders and ointments on a woman's dressing table. And there's something very sort of charming in his condescension to notice or what might've once seemed his condescension to notice those things, to find a new thing to take seriously, which is what poetry or not quite to take seriously, but to pay attention to, which I guess is one of the things that great perch should always be doing.Henry: When Swift, who was Pope's great friend, wrote about this, he wrote a poem called A Beautiful Young Lady Going to Bed, which is not as good, and I would love to claim Swift on our list, but I really can't.James: It's quite a horrible perm as well, that one, isn't it?Henry: It is. But it shows you how other people would treat the idea of the woman in front of her toilet, her mirror. And Swift uses an opportunity, as he said, to “lash the vice” because he hated all this adornment and what he would think of as the fakery of a woman painting herself. And so he talks about Corina pride of Drury Lane, which is obviously an ironic reference to her being a Lady of the Night, coming back and there's no drunken rake with her. Returning at the midnight hour;Four stories climbing to her bow'r;Then, seated on a three-legged chair,Takes off her artificial hair:Now, picking out a crystal eye,She wipes it clean, and lays it by.Her eye-brows from a mouse's hide,Stuck on with art on either side,Pulls off with care, and first displays 'em,Then in a play-book smoothly lays 'em.Now dexterously her plumpers draws,That serve to fill her hollow jaws.And it goes on like this. I mean, line after this is sort of raw doll quality to it, Pope, I think in contrast, it only illuminates him more to see where others are taking this kind of crude, very, very funny and witty, but very crude approach. He's able to really have the classical art of balance.James: Yes. And it's precisely his charm that he can mock it and sympathise and love it at the same time, which I think is just a more sort of complex suite of poetic emotions to have about that thing.Henry: So we want more people to read Pope and to love Pope.James: Yes. Even if I'm not letting him into my top.Henry: You are locking him out of the garden. Now, for the second tier, I want to argue for two anonymous poets. One of the things we did when we were talking about this was we asked chatGPT to see if it could give us a good answer. And if you use o1 or o1 Pro, it gives you a pretty good answer as to who the best poets in English are. But it has to be told that it's forgotten about the anonymous poets. And then it says, oh, that was stupid. There are quite a lot of good anonymous poets in English, but I suspect a lot of us, a lot of non artificial intelligence when thinking about this question overlook the anonymous poets. But I would think the Gawain poet and the Tom O' Bedlam poet deserve to be in here. I don't know what you think about that.James: I'm not competent to provide an opinion. I'm purely here to be educated on the subject of these anonymous poets. Henry: The Gawain poet, he's a mediaeval, assume it's a he, a mediaeval writer, obviously may well not be a man, a mediaeval writer. And he wrote Sir Gawain and The Green Knight, which is, if you haven't read it, you should really read it in translation first, I think because it's written at the same time as Chaucer. But Chaucer was written in a kind of London dialect, which is what became the English we speak. And so you can read quite a lot of Chaucer and the words look pretty similar and sometimes you need the footnotes, but when you read Gawain and The Green Knight, it's in a Northwestern dialect, which very much did not become modern day English. And so it's a bit more baffling, but it is a poem of tremendous imaginative power and weirdness. It's a very compelling story. We have a children's version here written by Selena Hastings who's a very accomplished biographer. And every now and then my son remembers it and he just reads it again and again and again. It's one of the best tales of King Arthur in his knights. And there's a wonderful book by John Burrow. It's a very short book, but that is such a loving piece of criticism that explicates the way in which that poem promotes virtue and all the nightly goodness that you would expect, but also is a very strange and unreal piece of work. And I think it has all the qualities of great poetry, but because it's written in this weird dialect, I remember as an undergraduate thinking, why is this so bloody difficult to read? But it is just marvellous. And I see people on Twitter, the few people who've read it, they read it again and they just say, God, it's so good. And I think there was a film of it a couple of years ago, but we will gloss lightly over that and not encourage you to do the film instead of the book.James: Yeah, you're now triggering a memory that I was at least set to read and perhaps did at least read part of Gawain and the Green Knight at University, but has not stuck to any brain cells at all.Henry: Well, you must try it again and tell me what you think. I mean, I find it easily to be one of the best poems in English.James: Yeah, no, I should. I had a little Chaucer kick recently actually, so maybe I'm prepared to rediscover mediaeval per after years of neglect since my degree,Henry: And it's quite short, which I always think is worth knowing. And then the Tom Bedlam is an anonymous poem from I think the 17th century, and it's one of the mad songs, so it's a bit like the Fool from King Lear. And again, it is a very mysterious, very strange and weird piece of work. Try and find it in and read the first few lines. And I think because it's anonymous, it's got slightly less of a reputation because it can't get picked up with some big name, but it is full of tremendous power. And again, I think it would be sad if it wasn't more well known.From the hag and hungry goblinThat into rags would rend ye,The spirit that stands by the naked manIn the Book of Moons defend ye,That of your five sound sensesYou never be forsaken,Nor wander from your selves with TomAbroad to beg your bacon,While I do sing, Any food, any feeding,Feeding, drink, or clothing;Come dame or maid, be not afraid,Poor Tom will injure nothing.Anyway, so you get the sense of it and it's got many stanzas and it's full of this kind of energy and it's again, very accomplished. It can carry the thought across these long lines and these long stanzas.James: When was it written? I'm aware of only if there's a name in the back of my mind.Henry: Oh, it's from the 17th century. So it's not from such a different time as King Lear, but it's written in the voice of a madman. And again, you think of that as the sort of thing a romantic poet would do. And it's strange to find it almost strange to find it displaced. There were these other mad songs. But I think because it's anonymous, it gets less well known, it gets less attention. It's not part of a bigger body of work, but it's absolutely, I think it's wonderful.James: I shall read it.Henry: So who have you got? Who else? Who are you putting in instead of these two?James: Hang on. So we're down to tier two now.Henry: Tier two.James: Yeah. So my tier two is: Donne, Elliot, Keats, Tennyson. I've put Spenser in tier two, Marvell and Pope, who we've already discussed. I mean, I think Eliot, we've talked about, I mean Donne just speaks for himself and there's probably a case that some people would make to bump him up a tier. Henry: Anybody can read that case in Katherine Rudell's book. We don't need to…James: Yes, exactly. If anybody's punching perhaps in tier two, it's Tennyson who I wasn't totally sure belonged there. Putting Tenon in the same tier as Donne and Spenser and Keets. I wonder if that's a little ambitious. I think that might raise eyebrows because there is a school of thought, which I'm not totally unsympathetic to this. What's the Auden quote about Tennyson? I really like it. I expressed very harshly, but I sort of get what he means. Auden said that Tennyson “had the finest ear perhaps of any English poet who was also undoubtedly the stupidest. There was little that he didn't know. There was little else that he did.” Which is far too harsh. But I mentioned to you earlier that I think was earlier this year, a friend and I had a project where we were going to memorise a perva week was a plan. We ended up basically getting, I think three quarters of the way through.And if there's a criticism of Tennyson that you could make, it's that the word music and the sheer lushness of phrases sometimes becomes its own momentum. And you can end up with these extremely lovely but sometimes slightly empty beautiful phrases, which is what I ended up feeling about Tithonus. And I sort of slightly felt I was memorising this unbelievably beautiful but ever so slightly hollow thing. And that was slightly why the project fell apart, I should say. Of course, they absolutely love Tennyson. He's one of my all time favourite poets, which is why my personal favouritism has bumped him up into that category. But I can see there's a case, and I think to a lot of people, he's just the kind of Victorian establishment gloom man, which is totally unfair, but there's not no case against Tennyson.Henry: Yeah, the common thing is that he has no ideas. I don't know if that's true or not. I'm also, I'm not sure how desperately important it is. It should be possible to be a great poet without ideas being at the centre of your work. If you accept the idea that the essence of poetry is invention, i.e. to say old things in a fantastically new way, then I think he qualifies very well as a great poet.James: Yes..Henry: Well, very well. I think Auden said what he said because he was anxious that it was true of himself.James: Yeah, I mean there's a strong argument that Auden had far too many ideas and the sorts of mad schemes and fantastical theories about history that Auden spent his spare time chasing after is certainly a kind of argument that poets maybe shouldn't have as many ideas, although it's just reading. Seamus Perry's got a very good little book on Tennyson, and the opening chapter is all about arguments about people who have tended to dislike Tennyson. And there are all kinds of embarrassing anecdotes about the elderly Tennyson trying to sort of go around dinner parties saying profound and sage-like things and totally putting his foot in it and saying things are completely banal. I should have made a note that this was sort of slightly, again, intensifying my alarm about is there occasionally a tinsely hollowness about Tennyson. I'm now being way too harsh about one of my favourite poets—Henry: I think it depends what you mean by ideas. He is more than just a poet of moods. He gives great expression, deep and strongly felt expression to a whole way of being and a whole way of conceiving of things. And it really was a huge part of why people became interested in the middle ages in the 19th century. I think there's Walter Scott and there's Tennyson who are really leading that work, and that became a dominant cultural force and it became something that meant a lot to people. And whether or not, I don't know whether it's the sort of idea that we're talking about, but I think that sort of thing, I think that qualifies as having ideas and think again, I think he's one of the best writers about the Arthurian legend. Now that work doesn't get into the Oxford Book of English Verse, maybe that's fair. But I think it was very important and I love it. I love it. And I find Tennyson easy to memorise, which is another point in his favour.James: Yeah.Henry: I'm going to read a little bit of Ulysses, which everyone knows the last five or six lines of that poem because it gets put into James Bond films and other such things. I'm going to read it from a little bit from earlier on. I am become a name;For always roaming with a hungry heartMuch have I seen and known; cities of menAnd manners, climates, councils, governments,Myself not least, but honour'd of them all;And drunk delight of battle with my peers,Far on the ringing plains of windy Troy.I am a part of all that I have met;Yet all experience is an arch wherethro'Gleams that untravell'd world, whose margin fadesFor ever and for ever when I move.I think that's amazing. And he can do that. He can do lots and lots and lots of that.James: Yeah, he really can. It's stunning. “Far on the ringing planes of windy Troy” is such an unbelievably evocative phrase.Henry: And that's what I mean. He's got this ability to bring back a sort of a whole mood of history. It's not just personal mood poetry. He can take you into these places and that is in the space of a line. In the space of a line. I think Matthew Arnold said of the last bit of what I just read is that he had this ability in Ulysses to make the lines seem very long and slow and to give them this kind of epic quality that far goes far beyond the actual length of that poem. Ulysses feels like this huge poem that's capturing so much of Homer and it's a few dozen lines.James: Yeah, no, I completely agree. Can I read a little bit of slightly more domestic Tennyson, from In Memoriam, I think his best poem and one of my all time favourite poems and it's got, there are many sort of famous lines on grief and things, but there's little sort of passage of natural description I think quite near the beginning that I've always really loved and I've always just thought was a stunning piece of poetry in terms of its sound and the way that the sound has patented and an unbelievably attentive description natural world, which is kind of the reason that even though I think Keats is a better poet, I do prefer reading Tennyson to Keats, so this is from the beginning of In Memoriam. Calm is the morn without a sound,Calm as to suit a calmer grief,And only thro' the faded leafThe chesnut pattering to the ground:Calm and deep peace on this high wold,And on these dews that drench the furze,And all the silvery gossamersThat twinkle into green and gold:Calm and still light on yon great plainThat sweeps with all its autumn bowers,And crowded farms and lessening towers,To mingle with the bounding main:And I just think that's an amazing piece of writing that takes you from that very close up image that it begins with of the “chestnut patterning to the ground” through the faded leaves of the tree, which is again, a really attentive little bit of natural description. I think anyone can picture the way that a chestnut might fall through the leaves of a chestnut tree, and it's just an amazing thing to notice. And I think the chestnut pattern to the ground does all the kind of wonderful, slightly onomatopoeic, Tennyson stuff so well, but by the end, you're kind of looking out over the English countryside, you've seen dew on the firs, and then you're just looking out across the plane to the sea, and it's this sort of, I just think it's one of those bits of poetry that anybody who stood in a slightly wet and romantic day in the English countryside knows exactly the feeling that he's evoking. And I mean there's no bit of—all of In Memoriam is pretty much that good. That's not a particularly celebrated passage I don't think. It's just wonderful everywhere.Henry: Yes. In Memoriam a bit like the Dunciad—under appreciated relative to its huge merits.James: Yeah, I think it sounds, I mean guess by the end of his life, Tennyson had that reputation as the establishment sage of Victorian England, queen of Victoria's favourite poet, which is a pretty off-putting reputation for to have. And I think In Memoriam is supposed to be this slightly cobwebby, musty masterpiece of Victorian grief. But there was just so much, I mean, gorgeous, beautiful sensuous poetry in it.Henry: Yeah, lots of very intense feelings. No, I agree. I have Tennyson my third tier because I had to have the Gawain poet, but I agree that he's very, very great.James: Yeah, I think the case for third tier is I'm very open to that case for the reasons that I said.Henry: Keats, we both have Keats much higher than Shelly. I think Byron's not on anyone's list because who cares about Byron. Overrated, badly behaved. Terrible jokes. Terrible jokes.James: I think people often think Byron's a better pert without having read an awful lot of the poetry of Byron. But I think anybody who's tried to wade through long swathes of Don Juan or—Henry: My God,James: Childe Harold, has amazing, amazing, beautiful moments. But yeah, there's an awful lot of stuff that you don't enjoy. I think.Henry: So to make the case for Keats, I want to talk about The Eve of St. Agnes, which I don't know about you, but I love The Eve of St. Agnes. I go back to it all the time. I find it absolutely electric.James: I'm going to say that Keats is a poet, which is kind of weird for somebody is sent to us and obviously beautiful as Keats. I sort of feel like I admire more than I love. I get why he's brilliant. It's very hard not to see why he's brilliant, but he's someone I would very rarely sit down and read for fun and somebody got an awful lot of feeling or excitement out of, but that's clearly a me problem, not a Keats problem.Henry: When I was a teenager, I knew so much Keats by heart. I knew the whole of the Ode to a Nightingale. I mean, I was absolutely steeped in it morning, noon and night. I couldn't get over it. And now I don't know if I could get back to that point. He was a very young poet and he writes in a very young way. But I'm going to read—The Eve of St. Agnes is great. It's a narrative poem, which I think is a good way to get into this stuff because the story is fantastic. And he had read Spenser, he was part of this kind of the beginning of this mediaeval revival. And he's very interested in going back to those old images, those old stories. And this is the bit, I think everything we're reading is from the Oxford Book of English Verse, so that if people at home want to read along they can.This is when the heroine of the poem is Madeline is making her escape basically. And I think this is very, very exciting. Her falt'ring hand upon the balustrade,Old Angela was feeling for the stair,When Madeline, St. Agnes' charmed maid,Rose, like a mission'd spirit, unaware:With silver taper's light, and pious care,She turn'd, and down the aged gossip ledTo a safe level matting. Now prepare,Young Porphyro, for gazing on that bed;She comes, she comes again, like ring-dove fray'd and fled.Out went the taper as she hurried in;Its little smoke, in pallid moonshine, died:She clos'd the door, she panted, all akinTo spirits of the air, and visions wide:No uttered syllable, or, woe betide!But to her heart, her heart was voluble,Paining with eloquence her balmy side;As though a tongueless nightingale should swellHer throat in vain, and die, heart-stifled, in her dell.A casement high and triple-arch'd there was,All garlanded with carven imag'riesOf fruits, and flowers, and bunches of knot-grass,And diamonded with panes of quaint device,Innumerable of stains and splendid dyes,As are the tiger-moth's deep-damask'd wings;And in the midst, 'mong thousand heraldries,And twilight saints, and dim emblazonings,A shielded scutcheon blush'd with blood of queens and kings.I mean, so much atmosphere, so much tension, so many wonderful images just coming one after the other. The rapidity of it, the tumbling nature of it. And people often quote the Ode to autumn, which has a lot of that.James: I have to say, I found that totally enchanting. And perhaps my problem is that I need you to read it all to me. You can make an audio book that I can listen to.Henry: I honestly, I actually might read the whole of the E and put it out as audio on Substack becauseJames: I would actually listen to that.Henry: I love it so much. And I feel like it gets, when we talk about Keats, we talk about, On First Looking into Chapman's Homer and Bright Star and La Belle Dame Sans Merci, and these are great, great poems and they're poems that we do at school Ode to a Nightingale because I think The Great Gatsby has a big debt to Ode to a Nightingale, doesn't it? And obviously everyone quotes the Ode to Autumn. I mean, as far as I can tell, the 1st of October every year is the whole world sharing the first stands of the Ode to Autumn.James: Yeah. He may be one of the people who suffers from over familiarity perhaps. And I think also because it sounds so much what poetry is supposed to sound like, because so much of our idea of poetry derives from Keats. Maybe that's something I've slightly need to get past a little bit.Henry: But if you can get into the complete works, there are many, the bit I just read is I think quite representative.James: I loved it. I thought it was completely beautiful and I would never have thought to ever, I probably can't have read that poem for years. I wouldn't have thought to read it. Since university, I don't thinkHenry: He's one of those people. All of my copies of him are sort of frayed and the spines are breaking, but the book is wearing out. I should just commit it to memory and be done. But somehow I love going back to it. So Keats is very high in my estimation, and we've both put him higher than Shelly and Coleridge.James: Yeah.Henry: Tell me why. Because those would typically, I think, be considered the superior poets.James: Do you think Shelly? I think Keats would be considered the superior poetHenry: To Shelly?James: Certainly, yes. I think to Shelly and Coleridge, that's where current fashion would place them. I mean, I have to say Coleridge is one of my all time favourite poets. In terms of people who had just every so often think, I'd love to read a poem, I'd love to read Frost at Midnight. I'd love to read the Aeolian Harp. I'd love to read This Lime Tree Bower, My Prison. I'd love to read Kubla Khan. Outside Milton, Coleridge is probably the person that I read most, but I think, I guess there's a case that Coleridge's output is pretty slight. What his reputation rest on is The Rime of the Ancient Mariner, Kubla Khan, the conversation poems, which a lot of people think are kind of plagiarised Wordsworth, at least in their style and tone, and then maybe not much else. Does anybody particularly read Cristabel and get much out of it nowadays? Dejection an Ode people like: it's never done an awful lot for me, so I sort of, in my personal Pantheon Coleridge is at the top and he's such an immensely sympathetic personality as well and such a curious person. But I think he's a little slight, and there's probably nothing in Coleridge that can match that gorgeous passage of Keats that you read. I think.Henry: Yeah, that's probably true. He's got more ideas, I guess. I don't think it matters that he's slight. Robert Frost said something about his ambition had been to lodge five or six poems in the English language, and if he'd done that, he would've achieved greatness. And obviously Frost very much did do that and is probably the most quotable and well-known poet. But I think Coleridge easily meets those criteria with the poems you described. And if all we had was the Rime of the Ancient Mariner, I would think it to be like Tom O' Bedlam, like the Elegy in a Country Churchyard, one of those great, great, great poems that on its own terms, deserves to be on this list.James: Yeah, and I guess another point in his favour is a great poet is they're all pretty unalike. I think if given Rime of the Ancient Mariner, a conversation poem and Kubla Khan and said, guess whether these are three separate poets or the same guy, you would say, oh, there's a totally different poems. They're three different people. One's a kind of creepy gothic horror ballad. Another one is a philosophical reflection. Another is the sort of Mad Opium dream. I mean, Kubla Khan is just without a doubt, one of the top handful of purposes in English language, I think.Henry: Oh yeah, yeah. And it has that quality of the Elegy in a Country Churchyard that so many of the lines are so quotable in the sense that they could be, in the case of the Elegy in a Country Churchyard, a lot of novels did get their titles from it. I think it was James Lees Milne. Every volume of his diaries, which there are obviously quite a few, had its title from Kubla Khan. Ancient as the Hills and so on. It's one of those poems. It just provides us with so much wonderful language in the space of what a page.James: Sort of goes all over the place. Romantic chasms, Abyssinian made with dulcimer, icy pleasure dome with caves of ice. It just such a—it's so mysterious. I mean, there's nothing else remotely like it at all in English literature that I can think of, and its kind strangeness and virtuosity. I really love that poem.Henry: Now, should we say a word for Shelly? Because everyone knows Ozymandias, which is one of those internet poems that goes around a lot, but I don't know how well known the rest of his body of work is beyond that. I fell in love with him when I read a very short lyric called “To—” Music, when soft voices die,Vibrates in the memory—Odours, when sweet violets sicken,Live within the sense they quicken.Rose leaves, when the rose is dead,Are heaped for the belovèd's bed;And so thy thoughts, when thou art gone,Love itself shall slumber on.I found that to be one of those poems that was once read and immediately memorised. But he has this very, again, broad body of work. He can write about philosophical ideas, he can write about moods, he can write narrative. He wrote Julian and Maddalo, which is a dialogue poem about visiting a madman and taking sympathy with him and asking the question, who's really mad here? Very Swiftian question. He can write about the sublime in Mont Blanc. I mean, he has got huge intellectual power along with the beauty. He's what people want Tennyson to be, I guess.James: Yeah. Or what people think Byron might be. I think Shelly is great. I don't quite get that Byron is so much more famous. Shelly has just a dramatic and, well, maybe not quite just as, but an incredibly dramatic and exciting life to go along with it,Henry: I think some of the short lyrics from Byron have got much more purchase in day-to-day life, like She Walks in Beauty.James: Yeah. I think you have to maybe get Shelly a little more length, don't you? I mean, even there's something like Ode to the West Wind is you have to take the whole thing to love it, perhaps.Henry: Yes. And again, I think he's a bit like George Herbert. He's always thinking you really have to pay attention and think with him. Whereas Byron has got lots of lines you can copy out and give to a girl that you like on the bus or something.James: Yes. No, that's true.Henry: I don't mean that in quite as rude a way as it sounds. I do think that's a good thing. But Shelly's, I think, much more of a thinker, and I agree with you Childe Harold and so forth. It's all crashing bore. I might to try it again, but awful.James: I don't want move past Coledridge without inflicting little Coledridge on you. Can I?Henry: Oh, yes. No, sorry. We didn't read Coledridge, right?James: Are just, I mean, what to read from Coledridge? I mean, I could read the whole of Kubla Khan, but that would be maybe a bit boring. I mean, again, these are pretty famous and obvious lines from Frost at Midnight, which is Coledridge sitting up late at night in his cottage with his baby in its cradle, and he sort of addressing it and thinking about it. And I just think these lines are so, well, everything we've said about Coledridge, philosophical, thoughtful, beautiful, in a sort of totally knockout, undeniable way. So it goes, he's talking to his young son, I think. My babe so beautiful! it thrills my heartWith tender gladness, thus to look at thee,And think that thou shalt learn far other lore,And in far other scenes! For I was rearedIn the great city, pent 'mid cloisters dim,And saw nought lovely but the sky and stars.But thou, my babe! shalt wander like a breezeBy lakes and sandy shores, beneath the cragsOf ancient mountain, and beneath the clouds,Which image in their bulk both lakes and shoresAnd mountain crags: so shalt thou see and hearThe lovely shapes and sounds intelligibleOf that eternal language, which thy GodUtters, who from eternity doth teachHimself in all, and all things in himself.Which is just—what aren't those lines of poetry doing? And with such kind of confidence, the way you get from talking to your baby and its cradle about what kind of upbringing you hope it will have to those flashes of, I mean quite Wordsworthian beauty, and then the sort of philosophical tone at the end. It's just such a stunning, lovely poem. Yeah, I love it.Henry: Now we both got Yeats and Hopkins. And Hopkins I think is really, really a tremendous poet, but neither of us has put Browning, which a lot of other people maybe would. Can we have a go at Browning for a minute? Can we leave him in shreds? James: Oh God. I mean, you're going to be a better advocate of Browning than I am. I've never—Henry: Don't advocate for him. No, no, no.James: We we're sticking him out.Henry: We're sticking him.James: I wonder if I even feel qualified to do that. I mean, I read quite a bit of Browning at university, found it hard to get on with sometimes. I think I found a little affected and pretentious about him and a little kind of needlessly difficult in a sort of off-puttingly Victorian way. But then I was reading, I reviewed a couple of years ago, John Carey has an excellent introduction to English poetry. I think it's called A Little History of Poetry in which he described Browning's incredibly long poem, The Ring in the Book as one of the all time wonders of verbal art. This thing is, I think it's like 700 or 800 pages long poem in the Penguin edition, which has always given me pause for thought and made me think that I've dismissed Browning out of hand because if John Carey's telling me that, then I must be wrong.But I think I have had very little pleasure out of Browning, and I mean by the end of the 19th century, there was a bit of a sort of Victorian cult of Browning, which I think was influential. And people liked him because he was a living celebrity who'd been anointed as a great poet, and people liked to go and worship at his feet and stuff. I do kind of wonder whether he's lasted, I don't think many people read him for pleasure, and I wonder if that maybe tells its own story. What's your case against Browning?Henry: No, much the same. I think he's very accomplished and very, he probably, he deserves a place on the list, but I can't enjoy him and I don't really know why. But to me, he's very clever and very good, but as you say, a bit dull.James: Yeah, I totally agree. I'm willing. It must be our failing, I'm sure. Yeah, no, I'm sure. I'm willing to believe they're all, if this podcast is listened to by scholars of Victorian poetry, they're cringing and holding their head in their hands at this—Henry: They've turned off already. Well, if you read The Ring and the Book, you can come back on and tell us about it.James: Oh God, yeah. I mean, in about 20 years time.Henry: I think we both have Auden, but you said something you said, “does Auden have an edge of fraudulence?”James: Yeah, I mean, again, I feel like I'm being really rude about a lot of poets that I really love. I don't really know why doesn't think, realising that people consider to be a little bit weak makes you appreciate their best stuff even more I guess. I mean, it's hard to make that argument without reading a bit of Auden. I wonder what bit gets it across. I haven't gotten any ready. What would you say about Auden?Henry: I love Auden. I think he was the best poet of the 20th century maybe. I mean, I have to sort of begrudgingly accept T.S. Eliot beside, I think he can do everything from, he can do songs, light lyrics, comic verse, he can do occasional poetry, obituaries. He was a political poet. He wrote in every form, I think almost literally that might be true. Every type of stanza, different lines. He was just structurally remarkable. I suspect he'll end up a bit like Pope once the culture has tur

1:1 Integration Support & Psychedelic Guidance  » Join Unlock God Mode, a 30-day audio course for upgrading your relationship with reality. «  The Mushroom Trip Checklist (ebook)  Check out The James Xander Trip podcast ❤️  Subscribe to my personal YouTube channel [From the vault - Episode 7 of The James Xander Trip] – Ebrahim Turner is an entrepreneur, mindset wizard, and spiritual seeker. His mission is to raise the consciousness of a million entrepreneurs. In this episode, we dive into his experiences with mushrooms, Ayahuasca, vulnerability, self-love, self-worth, and so much more.Join the the Psychedelic Tribe - jamesxander.com ❤️  [Watch this episode on YouTube]In our conversation, we dive into: • Ebrahim's spiritual beginnings• Ebrahim's first mushroom trip• What is the 5D? Going from 3D to 5D.• How business is a spiritual game• Lessons in surrender• Masculine vs feminine• Internal State = External Reality• Ebrahim's opinion of The Secret by Rhonda Byrne• Ebrahim's manifestation formula• Self-worth and Ayahuasca• What is the root cause of trauma• How do we release trauma• Going from victimhood to creator• Lessons from Ayahuasca• Destiny and parallel timelines• The true nature of reality• What is vulnerability?• Ebrahim's journey with self-love• Unconditional love vs attached love• Navigating heartbreak and break-ups• What Ebrahim learned from Peter Crone• What Ebrahim learned from his solo silent retreat• Who are we underneath our stories?• How do we open our heart to love?Listen to the podcast on Spotify and Apple: https://jamesxander.fm/subscribe

Get my free mushroom trip checklist here: jamesxander.com/checklist ❤️ » 1:1 Integration Support & Psychedelic Guidance «» Unlock God Mode – A Course for Upgrading Your Hologram « YOUTUBE:• YouTube channel @emperorjames• YouTube channel @jamesxandertrip [From the vault - Episode 7 of The James Xander Trip] – I am so excited to share my interview with Ebrahim Turner. Ebrahim is an entrepreneur, mindset wizard, and spiritual seeker. His mission is to raise the consciousness of a million entrepreneurs.[Watch this episode on YouTube]In our conversation, we dive into: • Ebrahim's spiritual beginnings• Ebrahim's first mushroom trip• What is the 5D? Going from 3D to 5D.• How business is a spiritual game• Lessons in surrender• Masculine vs feminine• Internal State = External Reality• Ebrahim's opinion of The Secret by Rhonda Byrne• Ebrahim's manifestation formula• Self-worth and Ayahuasca• What is the root cause of trauma• How do we release trauma• Going from victimhood to creator• Lessons from Ayahuasca• Destiny and parallel timelines• The true nature of reality• What is vulnerability?• Ebrahim's journey with self-love• Unconditional love vs attached love• Navigating heartbreak and break-ups• What Ebrahim learned from Peter Crone• What Ebrahim learned from his solo silent retreat• Who are we underneath our stories?• How do we open our heart to love?Listen to the podcast on Spotify and Apple: https://jamesxander.fm/subscribe

Get my free mushroom trip checklist here: jamesxander.com/checklist ❤️ » 1:1 Integration Support & Psychedelic Guidance «» Unlock God Mode – A Course for Upgrading Your Hologram « YOUTUBE:• YouTube channel @emperorjames• YouTube channel @jamesxandertrip [From the vault] - This is a re-share of one of my favorite episodes from The James Xander Trip podcast. Enjoy :)Episode 3 – Paul Scott is an energy healing facilitator, spiritual seeker, plant medicine explorer, and transpersonal counsellor.[Watch this episode on YouTube] Paul joins me today to dive into:• his journeys with LSD, Ayahuasca, and Bufo• how psychedelics brought him closer to God• why do so many people feel disconnected• how he overcame a life-threatening illness• his journey with addiction and sobriety• how Alcoholics Anonymous helped him• how to keep going in the face of adversity• what keeps people stuck in life• his study of A Course in Miracles• his vision quest with the Indigenous people• the planet's current evolution• how to trust and surrender to the Divine• his Ayahuasca experience• his Bufo experience (5-MeO-DMT)• his wild mushroom trip• the difference between LSD and mushrooms• how he met the love of his life, Kathie• his advice and wisdom on love & relationships• the importance of forgiveness & making amends• his thoughts on aging and growing older• the #1 lesson he would impart to his younger selfSupport the podcast:• Watch this episode on YouTube.• Share this episode: jx.fm/episode3• Join the Psychedelic Tribe - jamesxander.com/tribe ❤️Connect with James Xander:• Newsletter• Instagram• Twitter• PatreonTimestamps:• (0:00) - Preview• (02:15) - Introduction• (03:06) - First mystical experience• (05:58) - First awakening experience• (07:48) - How LSD changed Paul's life• (10:20) - Unity consciousness state• (16:25) - Paul's journey with addiction• (18:42) - Dark night of the soul• (26:44) - Surrendering to life• (36:02) - Sobriety & Alcoholics Anonymous• (41:39) - The key to transformation• (44:18) - A Course in Miracles• (50:27) - Paul's Vision Quest• (54:56) - The planet's current evolution• (57:14) - Trusting in the Divine Plan• (01:03:58) - Psychedelics & Ayahuasca• (01:07:20) - Bufo, Sonoran toad (5-MeO-DMT)• (01:17:17) - The importance of integration• (01:18:46) - Remembering past lives• (01:21:52) - Paul's wild mushroom trip• (01:26:02) - LSD vs mushrooms• (01:30:06) - Jaguar / 5-MeO-DMT• (01:34:17) - MDMA & mushrooms• (01:35:13) - The Celestine Prophecy• (01:36:22) - How Paul met Kathie• (01:41:00) - Lessons from love & marriage• (01:45:05) - Advice on love & relationships• (01:49:37) - Forgiveness & making amends• (01:56:51) - Thoughts on aging• (02:00:54) - Lessons to his younger self• (02:05:34) - Just be you• (02:08:50) - Enjoy the ride• (02:10:14) - ConclusionBooks mentioned:• Eating Alive by Jonn Matsen• You Can Heal Your Life by Louise Hay• A Course in Miracles by Helen Schucman• The Celestine Prophecy by James RedfieldSupport the podcast:• Share this episode: jx.fm/episode3• Subscribe to the podcast on YouTube• Support the podcast via PatreonConnect with Paul at:• quantumlife.caConnect with James• Newsletter• Instagram• Twitter• PatreonYou've been listening to The James Xander Trip, episode 3.Special thanks to Paul, Kathie, Sayde, Sasha, Jerry, Lucas, Alejandro, Manny, Azmat, Monty, Ajrina, Fikky, Raka, Mamet, Somnath, Khizer, Artemis, Vlad, and Karim for your contributions and encouragement.Stay tuned for more episodes!Join the Psychedelic Tribe - jamesxander.com ❤️ Resources for your psychedelic trip:• YouTube channel• 4 Essential Touchstones for Your Mushroom Trip• The Mushroom Trip Guide: A Psychedelic Checklist• 1:1 Cosmic Guidance Call with James  Thanks to our monthly supporters Jacquelyn Guiliano Izbel Mark Snow Brent Knight Buy me a coffee ❤️ » Become a Patreon supporter » » Join Unlock God Mode, a 30-day audio course for upgrading your relationship with reality. « The Mushroom Trip Checklist (ebook) Check out The James Xander Trip podcast ❤️ Subscribe to my personal YouTube channel  ★ Support this podcast on Patreon ★

Get my free mushroom trip checklist here: jamesxander.com/checklist ❤️ » 1:1 Integration Support & Psychedelic Guidance «» Unlock God Mode – A Course for Upgrading Your Hologram « YOUTUBE:• YouTube channel @emperorjames• YouTube channel @jamesxandertrip [From the vault] - This is a re-share of one of my most popular episodes from The James Xander Trip podcast. Enjoy :)Jakob Gricar (@jakobgricar) is a spiritual explorer, thrill seeker, and the co-founder of Vortex Retreats. For the last four years, he's done deep work with plant medicine and psychedelic journeys, living and learning with the Indigenous communities in Peru, Colombia, and Ecuador. [Watch this episode on YouTube] He joins me today to dive into: • his Ayahuasca experiences in Peru • his 5-MeO-DMT and Yopo experiences • his mushroom microdosing experiments • how he overcame depression with psilocybin • the lessons he's learned from plant medicine • what it was like to leave his home country • how to listen to the signs from the Universe • his dilemma when it comes to manifestation • how Dolores Cannon's work impacted him • his self-hypnosis experiments • his wild travel stories • and how to live an epic life Timestamps:• (00:00) - Introduction• (01:35) - Jakob's story of healing• (14:00) - Leaving his home country• (26:35) - First mushroom trip• (43:19) - Wild hitchhiking story• (51:57) - First Ayahuasca trip• (01:02:30) - Doing the shadow work• (01:09:25) - Finding the magic in life• (01:24:27) - The true nature of reality• (01:41:00) - Trusting the Divine Plan• (01:55:44) - How to live an epic lifeBooks mentioned:• A Really Good Day by Ayelet Waldman• The Psychedelic Explorer's Guide by James Fadiman• Hatha Yoga Padipika by Swami Muktibodhananda• The Convoluted Universe by Dolores CannonAdditional resources:• Beginner's Guide to Shroom Trips• Top 5 Benefits of Mushroom TripsSupport the podcast:• Share this episode: jx.fm/jakob• Subscribe to the YouTube channel• Join The Psychedelic Tribe - a Discord for reality explorers ❤️ Connect with James• Newsletter• Instagram• Twitter• DiscordYou've been listening to episode 1 of The James Xander Trip. For more conversations like this, visit jamesxander.com.Stay tuned for more episodes!Join the Psychedelic Tribe - jamesxander.com ❤️ Resources for your psychedelic trip: • YouTube channel • 4 Essential Touchstones for Your Mushroom Trip • The Mushroom Trip Guide: A Psychedelic Checklist • 1:1 Cosmic Guidance Call with James  Thanks to our monthly supporters Jacquelyn Guiliano Izbel Mark Snow Brent Knight Buy me a coffee ❤️ » Become a Patreon supporter » » Join Unlock God Mode, a 30-day audio course for upgrading your relationship with reality. « The Mushroom Trip Checklist (ebook) Check out The James Xander Trip podcast ❤️ Subscribe to my personal YouTube channel  ★ Support this podcast on Patreon ★

Hello beautiful soul and welcome to the Ayahuasca podcast! I'm your host, James Xander. In this podcast, we're going to dive into Ayahuasca and it's healing properties, as well as how it relates to spirit, self-love, personal growth, psychedelics, and your soul's journey. We'll explore how Ayahuasca and other plant medicines that can connect us deeper to our soul and unveil the mysteries of the nature of reality.  This podcast is a spin-off from The Microdose, where I dive into psychedelics in general. I also run The James Xander Trip, where I have in-depth conversations with guests from all walks of life about spirituality, mindset, and psychedelics. If you're interested in that, please do check it out on video or audio.  You can also connect with me on my personal YouTube channel.  Thank you so much for tuning in! It's my honour to have you as a listener. My intention is to uplift you, inspire you, and connect you deeper to your heart and your intuition.  Let the trip begin!

James Thanks you and Speaks to YOU!

Remember, we welcome comments, questions and suggested topics at thewonderpodcastQs@gmail.com   S3E39 TRANSCRIPT:----more----   Mark: Welcome back to the Wonder Science-based Paganism. I'm your host, Mark, Yucca: and I'm the other one. Yucca. Mark: and today we have a very special episode. We're interviewing James Morgenstern, who is on the Atheopagan Society Council. And so, along with Yucca and myself and a bunch of other people. And so it's just an opportunity to get to know him and ask his ideas about where he sees the community going and how he came to be a part of this community and all that good kind of stuff. So, welcome James. James: Thanks for having me. Yucca: We're really happy to have you, so Well, why don't we get started with. you know how, how you found or came to agonism. James: So, it's kind of a, a, a long journey that started back in like the late eighties like 87, 88, somewhere around in there. And I, I was, I, I was an, an avid reader back then. And I remember coming across like a group of, at a garage sale, this collection of encyclopedias called Man Myth and Magic. And it was like everything supernatural in the cult from A to Z And I got made fun of a bit in grade school and called Encyclopedia Brown and stuff like that because I like, I, because I read encyclopedias. And so I came across these, bought 'em for like a quarter a book with my allowance and read them all. And that really sort of piqued my interest in, in the cult and whatnot. And there were there were articles in there about like, Paganism and, and Witchcraft and Wicca and, and what have you. And so I started seeking out books all of this under, you know, the cover of secrecy because I, you know, grew up in the Midwest, in central Illinois. And all of that stuff was a big no-no. So I. With, I had gone to you know, I grew up in a tiny little town, so we had gone some friends of mine and I had gone with one of their parents into this town, and there was this store in the mall that I went into, I think it was like, it might have been a b Dalton book Sellers, you know, one of those book sellers that's not around anymore. And I found a copy of Raymond Buckland's, Complete book of witchcraft. And I went through that whole thing. It was like a series of lessons. Anybody familiar with, you know, witchcraft from back in that area is familiar with the big blue book. But it went through the whole self initiation ritual thing that they had at the end of that. And that was sort of my start on that path. I started reading a lot of Scott Cunningham. He had, you know, a lot of good material for like solitary practitioners and and whatnot. And later on in my, you know, in my adult life I got involved with a this was shortly after I was married, I got involved with a group in Springfield, Illinois called the Edge Perception Collective. And we put on seasonal public rituals, you know, for the, for the community there in central Illinois. And from there I got involved with the Diana's Grove Mystery School and which was, those folks were fantastic. There's just some really good, you know, kind nice people. And the. It was interesting. They had like a 200 acre property in the Ozarks and, you know, it was beautiful. Had this, it had been a cattle ranch at one point, and so like the edges of it were forested and there was this big meadow in the center with like a seven circuit labyrinth mode into it. That was huge. And they had all these cabins that had built, had been built on the property by the Amish. And you know, they did week long intensives and, and weekend you know, seminars and things like that on all sorts of different topics. I took several like drumming classes there with lane Redmond and, and whatnot. And the you know, the whole time though, like, looking back, I, I realized that. With, in terms of like the belief in like DA and things like that. I was really sort of going through the motions on it. Like, I don't know that I ever actually really believed that, that there were these beings out there. I think a lot of it was me looking for an alternative to what I was in the middle of and sort of, you know, inundated by, and that was, you know, conservative Christianity you know, Midwestern Bible country, you know, kind of kind of folks. And so I, I, I sort of, I moved to St. Louis in like 2000 and really sort of drifted away from all of that and had this big. Spot in my life, you know? A lot of the stuff that I had done previously, even, you know, even being part of the, of this group and that that community all on my own, you know, was all solo stuff. Mark: Mm. James: And a lot of that, you know, took place primarily in, in, in my head. You know, it's the whole like, you know, you develop like a mind palace or whatever they call it these days where you've got this sort of sacred space in your own skull. And that some of that was coping mechanisms and things like that for, you know, mental health issues and, and whatnot. But but I had this big hole and, and, and that lasted a long time. And I moved to California in like 2013 or 2014. At the beginning of 2014. And I remember like, I don't remember the exact year it was, but I was online and on Facebook, and I don't remember if it was like a suggested group or if I was searching for, you know, some sort of online group to join. I've got a lot of, I've got friends out here, you know, on the west coast that are all part of this sort of like spooky dark, you know, like, you know, witchy, woodsy, you know, forest people type community musicians and artists and whatnot. And so, lots of pagan stuff being posted by them and, and you know, that whole aesthetic. So it may have been a recommended group but I found the Athe O Paganism one and I clicked on it and looked at the about page. Read the description and everything, and that seemed like that's, like, that was really kind of where I was at. Like, I wanted, I wanted all the pagan stuff, but I didn't want all of the praying to God's goddesses or offerings to forest, you know, fairies and, and, and things along those lines. so I joined the group and was just sort of a, a lurker for a while. And then I don't remember exactly how I met you, Mark. I think I, it was, you had posted something about where you lived or something along those lines, and I was like, Holy crap. Like, that's, that's, that's, you know, 20 minutes away, 30 minutes away or whatever. and I don't remember if I sent you a message or if it was in a comment or something. Like I don't, the details of all that are Mark: I think he sent me a message as I recall, and we decided to meet for coffee. James: Yeah. But that was fantastic. And then I read your book and like your whole story of how you came to all this. A lot of that resonated with me cuz I'd been involved with similar groups, you know, in the past, the whole church of all worlds. And you know, I wasn't involved with them at all, but I, I was well aware of them and, and things going on with them. And then, you know, I wanted to I wanted to take a more active role in the community because. I don't know. I feel like, I feel like everybody should want to take a more active role. You know, you gotta participate in community, you know, on some level. At least that's how I feel, you know, for myself. And so I, when a call went out for moderators on the group, you know, I, I stepped up to that and and then was a moderator on and off for a couple of years, I think.  Yucca: A few. Yeah. James: yeah, recently, recently, you know, stepped down from that again. And then when the Atheopagan Society started coming together, you know, and, you know, we decided to put together an actual, like, council of people, you know, I, I. Felt the need to be a part of that, you know, on the, on the ground floor. Mark: Mm-hmm. James: don't know cuz I, it's, it's really given me a lot in terms of like, helping sort of fill that hole that I had in my life for so long with not having any sort of like, ritual, you know, or spiritual life, you know, it was, I dunno, it was like, I struggle with I struggle with a fair amount of mental health issues, you know, depression, things like that. And when having that, having a spiritual life and even in my own head now using words like that is, there's a little bit of dissonance because I don't believe in like a spirit world, but I, when I tend to use the word spirit or spiritual, I'm, it's more in the sense of essential. Mark: Mm-hmm. James: spirit being the essence of a thing. You know, and so a spiritual life for me is an essential life. It's a thing that, you know, it's something that's Yucca: mm. James: Um, and the, the, a paganism group online and just the, you know, approaching spirituality from that standpoint has, has helped me out a lot. And so I, I wanted to, to, to try to give back on some level as much as I'm able anyway. Mark: Well, that's great. Thank you for that. Yeah, it's, it's been great for me because you, you are local to get to know you and, you know, become friends. And now of course we have the Northern California Affinity group the Live Oak Circle, and we've been having in-person meetings with a little group of folks. And to me that's just been wonderful. I've, I've really enjoyed sharing rituals with, with a group like that.  James: In person is definitely, at least for me personally, is far more rewarding than, you know, online. So if there's a certain, there's a certain distance that I feel, you know, with online interactions and they, they just doesn't feel as personal and meaningful to me. Other people get a lot out of it, you know, I know that we have like the the mixers and things like that, you know, on Saturdays and like on Thursdays or whatever online. And I know that there are a lot of people who get a lot out of those, and that's fantastic. You know, I think you should get, you should get that community interaction however you can get it. But yeah. Yucca: well, I really love that we've been able to start building both of those kinds of, of interactions right now as, as we're, we're growing and able to do in person gatherings. Both like we did earlier this spring with the retreat and then with local groups and then the mixers and the text communication, which is what mostly the Facebook discord is. Mark: Mm-hmm. Yucca: So it's, it's lovely to see that diversity and people being able to kind of plug in, in the way that fits in in their life and, and their particular needs. James: Yeah. Yucca: and it seems like James, you've, you've been a big part of a lot of that kind of looking out for and caring for and participating in that online component. James: Yeah. Like, I feel, I feel very, and one of the reasons I wanted to be like help be a moderator and stuff for the, for the Facebook group was that I feel like I tend to get protective of, you know, the groups that I'm, that I'm part of. It's all, it's like chosen family kind of, kind of situation. And I felt like being a moderator helped, like, put me in a role where I could be more effective at doing that. Yucca: Mm-hmm. James: because there's a lot of folks that aren't able to sort of stand up for themselves and you only have so much, aside from just blocking people online you've only got so much that you can do in a group if you aren't a moderator. You know, you don't have the ability to, you know, to shield other people from, you know, abuses and things along those lines. And not that we've had a huge problem with. Folks like that in the, our fa I feel like out of all of the Facebook groups that I've, that I've been a part of and all of just the social media groups in general that I've been a part of, the Atheopagan group is definitely by far the most friendly and problem free group that I've, that I, especially with, you know, now we've got well over 4,000 members. Like, it, it, it shocks me on some level that there wasn't, that there wasn't a lot more moderation issues than there, than there was. We just don't get the trolls. I think a lot of that is, is due in part to like our screening process for people, you know, and and just the, you know, vigilance and the community themselves, like, you know, that even aren't moderators stepping up to, you know, Sort of take charge cuz it's, it's, I feel like it's all of our responsibilities to make sure that we've got a nice, you know, safe, accommodating, friendly community, you know, to be a part of. You know, and every, every group is gonna have issues, but I feel like our group is, is always working on those, you know, when something comes up, when someone brings something to our attention, something was problematic or something that we, that needs to be addressed that we're, that we, we work on it. I feel like that effort is an honest one and that, you know, and that's important. But but yeah, it's by far the, the best group I've been a part of. And I, and I think that speaks a lot for the people that are involved. Mark: I agree. Yeah, I mean, I've, I continue to be amazed by the quality of the community that's come together online, around aop, Paganism, and As you say, with more than 4,000 members, you would imagine that there would be more conflict. And it's not like there's group think because we have really interesting conversations about lots of different things and people have varying perspectives on a variety of different things. But there's a civility and a a fundamental assumption of good intention on the part of one another that I think is really rare for Facebook. I mean, I don't even go to my main Facebook feed anymore. I just hang out in the atheopagan. James: yeah, yeah. And it was, it was really great for me at the retreat to get to meet some of those folks in person. you know, cuz you see a name, you see a name and like an icon on online and I don't know, for me that's Yucca: A real animal person  James: Yeah,  Yucca: really right there in front of you. James: cuz like online there's a, like, I feel like there is sort of a certain degree of anonymity that's necessary because it can just be a dangerous place. So I don't fault people for not putting pictures of themselves up as like their Facebook photo or whatever. You know, I didn't do it for the longest time. Uh uh, now I don't really care. So it's whatever. But but it's nice being able to put a face to, you know, conversations that I've had with folks and, and things along those. Mark: So, I have kind of a two part question, I guess, for you, James. The first one is so what do you see your role as being on the Ethiopia Pagan Society Council? What, what do you see as, you know, what are your responsibilities there? What is, what do you see yourself as doing for the community there? And then the second part of the question is what about the future? What, what sorts of things do you see the society being able to do to foster this community or support it or train it or, you know, whatever. What, what's your vision there? James: I think in terms of my, my role, like, I feel like I, I try to represent the, the greater community as a whole. Mark: Mm. James: Take into consideration, like when we're making decisions and things like that, the needs of, of, of the community as it's been sort of represented to me by my interactions with people on Facebook, you know, in the Facebook group. And, and to a far, far lesser degree, the, the discord sort of, cuz I, I, I started the, that Discord server I don't, a couple years ago or whatever. And Discord is not my, it's not my thing. It's, you know, it's some people that's totally their jam and that's, and they prefer that over everything else and that's totally fine. It's just, it was never really my thing, but there was a call for it online and so I just, I had used it previously for like some gaming. And so I was like, well, you know, I'll start a server and we'll see how that happens and how that works. And now it, you know, it's got a, I think a couple hundred people on it. Mark: I think about 500 Yucca: Yeah, James: is it really? Mark: Yeah. Yucca: It's got some great stuff. Yeah. Mark: Yeah. James: I, yeah, like I said, it's, it is wasn't really my thing. I am not a tech savvy person, so, you know, there were got all these people that jumped on it, that were doing Discord stuff all the time and asking me as a, you know, as like the admin there, you know, Oh, can we do this? Can we do that? And it's like, I have no idea how to do those things. So and I don't have a whole lot of time to learn how to do those things. So like, I, that's a, yeah, that's a whole nother change. But in terms of like my role and what I, you know, what I seem like my responsibilities being like, I, I don't know. I. I think everybody, I think every group and, and it hasn't been a thing that I, that has been something that I feel like I've needed to worry about because our, our group and our organization has, it's worked a lot differently than a lot of other groups that I, that I'm aware of in the Pagan community and not so many that I've been a direct part of in, in terms of like decision making groups and whatnot. But I don't know. There was sort of this idea in my head at one point of like, being kind of a watchdog and making sure that things didn't start going down like a hierarchical you know, sort of problematic path. Often happens with those sort of council type groups in various PE communities. Like I said, I'd been a member of a group in the past. The, the edge of perception, which, you know, all we did was really put on public rituals. That's all we did. We weren't like a, we weren't sort of guiding a community necessarily. So all of our meetings dealt with what are we gonna do for the next, you know, for the solstice or whatever, and you know, who's gonna do what roles. And you know, how is, you know, how much did we spend on supplies for the last one? How much money do we have in the account for supplies for the next one? And you know, and that sort of thing, we were, we were a not for profit five. I think we had, you know, our 5 0 1 3 c, you know, thing or whatever. So we had to, you know, keep track of receipts and all that good stuff for taxes and but There weren't, so, there weren't really any issues in terms of like power struggles or anything along those lines, you know, people wanting to take control of things necessarily. At least none that I was aware of, but I definitely know that there are groups that are like that. You get like an individual who is, and that's one of the things like I, I feel I really sort of commend you for Mark, because you, that's, you have not being sort of the founder of, of this whole thing. You have made, I feel like you've made great strides to not put yourself in a position of. Power and or a position of authority or anything along those lines. You know, you've been pretty good about when people try to appeal to you as an authority on something and say, Well, Mark says this, or whatever. You're very much, I feel like you've done a pretty good job of, of the whole, like, you know, I'm just like, I'm just another member of the community like you, you know, just because my name's on a book or whatnot, that doesn't mean that, like what I say is, is law sort of thing. And I know that's been an issue. So there was an, at one point in my head there was this idea of like, kind of being a watchdog for the community if that sort of thing started to happen, to try to be a bull work against that. But that's, but it's never come up. So, that quickly faded into the background as something unnecessary. So I, so mainly I think I, I feel like I'm just there as support. Like I, like I said before, I, you know, I struggle with a lot of mental health issues and what have you. So my, my ability to do things is, is relatively limited. But I do, I, I, you know, I want to do whatever I'm capable of, you know, and take a more active role other than just seeing posts online and hearing about things and, you know, listening to the podcast and whatnot. And as far as going forward, I'd like to see a lot more opportunities like that provided for the entirety of the community. You know, it's a big community and I think a lot of those opportunities should be like on a, on local levels. You know, like you mentioned before, we've got our local live Oak Circle. Here in Northern California, which, you know, we've had like, what, like almost a dozen people Mark: Yeah. James: I think involved, you know, that have that at least, you know, I've seen, you know, active, we've got our own little discord server Mark: Mm. James: and whatnot to help coordinate stuff. And then you know, we've had Facebook members who have posted things about their local meetups, you know, one in Chicago that looked like had a fantastic turnout. And I like seeing it. It makes me happy to see things like that happening because I, community is something that's really important to me. And I think it's, I think a lot of the reason it's really important to me is, is because of how little direct access I have to it. You know, I'm, I'm sort of isolated out in the redwoods, you know, and So, and community interactions are, are, have become far more important to me. They're more meaningful to me because I have them, you know, so rarely. So that's an important step going forward, I think, is helping to foster those local communities Mark: Mmh. James: to build a greater, you know, broader, you know, general community. The, I thought that the Sun Tree retreat was a, was a fantastic success in terms of like turnout and whatnot. So I'd really love to see more events like that going forward. Like maybe regional regional ones and then, you know, a like a main sort of national one or whatever here in the States. And it would be fantastic to see. Because we've got members of the Facebook group from all over the world, you know? And we've got affinity groups for larger affinity groups, for like regional affinity groups for some of those areas. But it'd be great to see them putting together, you know, events and it, and I think a lot of people think if the, if like, Oh, we, if we're gonna do that, we're gonna need all of these things and we're gonna need this awesome space, and we're gonna need, you know, speakers or we're gonna need, It's like, you don't really, you just get together, get together and have a meal, you know, and make it a ritual, you know, be, be mindful of the various parts of the meal that you're, you know, as, as they're, as they're served or consumed or whatever. Or get together and, you know, if you're into drumming and stuff, you have a drum circle or sing some songs together or, you know, just do some, do something. As a community and it'll grow from that. You don't have to have like a fancy convention space or, you know, retreat center to go to or something along those lines. But I think building those communities is important because we, we do better together. You know, we, we move forward better, faster, more stronger together than we do, you know, as individuals. And some people, you know, social interaction is not a thing for them and they don't do well in groups and that's fine. You can totally do it by yourself. But, you know, I feel like as a, as a community though, moving forward, like these smaller local localized groups are really. I think that the next best step forward. Mark: Hmm. I think that's really well said about community and humanity as a social animal. You know, we, we get e even those of us that are very introverted will usually get something out of social interaction. They may not be able to take very much of it. But there's a, there's a sort of a, an energizing or a charge that comes with interacting with other people who see you and are authentic and open and kind and, you know, fostering that kind of a climate is, it's super important to me and it seems. That's what people are gravitating to in, in the online communities is like, wow, these people are nice and they're thoughtful and they're interesting and they, and they're rational and and they are open to the idea of secularizing the world in, you know, in ways that are moving and impactful. So, yeah. Yeah. That's very cool. I didn't realize that you had joined the council with the idea of being sort of a watchdog on, you know, on the power dynamics, but I'm, I'm glad to hear that you haven't felt that was necessary. James: Yeah. I mean that was sort of, it wasn't like a main reason, you know, the main reason was like, I, I wanted to be a part of it. I, you know, I wanted to be a part of, I wanted to give back, you know, cuz I had gotten quite a bit out of, you know, the online community and, and whatnot. And wanted to give back beyond just being a moderator on the Facebook group. And the, the whole like watchdog thing was sort of a secondary, a secondary thing, you know, one of those creeping things in the back of my head. And it was like, Oh, I've, like, I've seen groups like this come together before with really good intentions and then a cult of personality forms around one person. And and then it all falls apart. And I didn't wanna see that happen. You know, like I said, I, I feel, I feel kind of protective of our community. , which can have its own drawbacks because I, I, there are times when I'm feeling probably too protective and might see threats where there aren't any. And that's, you know, that's, that's my own shoot to deal with. The yeah, I think other things that we could do, like I, I, I think I probably mentioned previously about you know, we've got members of the community who probably are a little isolated and not as able and like some sort of like, outreach program or something along those lines, you know, to bring resources to those people. You know, I think this, this podcast has obviously been a great. Because you know, like you had mentioned to me previously about like the number of new members coming to the Facebook group because they heard the podcast which is fantastic, you know, but that's one of those things that like is of, it's available to everybody all over the world, you know, You know, you don't have to be on a specific social media platform or whatnot. This podcast is available on, you know, numerous different podcast platforms and everybody's got, and I think network, maybe possibly networking more with other similar like-minded groups. Yucca: Mm-hmm. James: You know, I think that might be a good step in the right direction. Cuz you know, In the end to get sort of philosophical, we're all in this together. Yucca: Yeah. James: that's not just like the a o paganism group online. And that's not just, you know, our, our local circles. It's, you know, everybody we're, and you know, we might not all completely agree on things all the time, but we, none of us get out of this alive. So we should all work together to make, to make the experiences as, as as pleasant as possible. Yucca: Hmm. Mark: Yeah. James: and that, you know, and that in that involves a lot of work. And not, not necessarily like physical footwork type stuff, but like personal work, you know, for each of us. Things like Like dealing with issues of racism and ableism and things along those lines. You know, that's, that's stuff that has to be worked on, on a personal level. And you know, we all have a lot of, I think a lot of us the vast majority of us have a lot of internalized, you know, issues with those things. Things that have become normalized for us because it's just, they're, they just are things that have never been an issue. You know, it's a thing we've talked about in the Facebook group. Paganism in general for the, for a long time was a primarily white thing, Yucca: Mm-hmm. James: And and so I think a lot of people of color and whatnot really felt it was inaccessible to them, Mark: Yeah. Or that they were unwelcome. James: or that they were unwelcome. Exactly. Because there's still this huge trend, and that's why I'm I really. One of the things that I really like about Atheopagan and that that drew me to it, is that it's not based in a culture, a preexisting culture. It's not based around a preexisting set of traditions. You know, it encourages, you know, a DIY approach. You know, create your own rituals, create your own traditions, you know, start new ones. Don't, you know, like we, it's not the goal to recreate some lost civilization or culture, or to live in, you know, a a, a pretend past that never really existed. Cuz that's what most of these groups, you know, I feel like to some degree do. And it's not about escapism either, Yucca: Mm-hmm. James: Which is a thing that I found. I've gotten a lot of flack in the past for, for bringing the issue up in groups that I've been a part of that I feel like a lot of people were, you know, they'll be a part of a group that espouses like, you know, justice or something along those lines. I'm not gonna name any groups in particular. But they'll espouse values like justice. But then when issues of justice are brought up, people, you know, start going on the whole, like, why do you gotta make this political? It's like, uh, how is it not, How is that not like everything is political. If it involves people, it's political. So, You know, every aspect of our lives is affected by politics. You know, nobody lives in a. Yucca: Mm-hmm. James: from the rest of the world. So literally every aspect of our life is, has been affected or is constantly affected by politics. Whether it be the laws that we're living under or the regulations we have to abide by when doing things to our homes or you know, our yards, you know, down to like HOA organizations with how tall your grass can be and crap like that. Um, it's all politics, you know, And so, and I understand like people who get tired of hearing about hearing all the arguing Yucca: Mm-hmm. James: what have you, and I think that's primarily, it seems to be primarily an American issue, you know, a US issue. But you know, everybody knows what's going on in this country, you know, right now and has been for a while. So, you know, the whole world knows the sort of situation we're living in. So I think it's understandable that people are burnt out. . And, but most of those people who are like, Why do you gotta make it political, are the ones who aren't really all that negatively affected by politics. Mark: Right. They're  James: tired of hearing people argue about it because it interrupts their peace and quiet and they come into these groups because they're trying to escape rather than, you know. But for me, like I said, a spiritual life is an essential life and as an essential part of life, it's politics is unavoidable Mark: Mm. James: cuz that's an essential part of life. You can't exist in the world without, with other people, without politics. So, you know, that's I think working on those issues on an individual level is important. And working on those issues as a community, you know, supporting each other. You know, I, I feel like our community has been really good in like the comment sections and stuff on Facebook of offering up resources when issues come up and someone says, Well, I don't know how to do that, or I don't, you know, or where do I go to find that information? There's usually always someone who's got a list of links or books to read or, you know, or, or YouTubers to follow, or, you know, something along those lines that are, you know, resources. And then it's incumbent upon us to take personal responsibility then at that point, and read those things, you know, or, you know, or, or, or look up those papers or, or what have you. And you know, it so yeah, I the whole escapism thing, that's Mark: Yeah, we've, we've talked about that here before. I mean, it's, it's tricky because you can use sort of fantastic language and, and framing to. Make your life a lot as a tool to make your life a lot more enchanted. Right. James: Oh yeah. Mark: But you need to keep in mind, you know, it's that ability to recognize the difference between metaphor and reality. You know  James: And I, I'm a, I'm a big fan of like, the myth poetic, you know, as, as a tool, you know, for, like you said, re enchanting, you know, your life. But there's a, it be, it starts to become escapism when that becomes the, your preferred realm to exist in. Cuz it's not a real place. And you live in the real world and there's no getting around that. Mark: sure. When you start blaming fairies for things, James: Or Mark: It's a problem. James: right, or you know, like a thing you had mentioned, and I think you had mentioned it in, in your book, you know, with people like excusing behaviors, because you know, it's the will of the gods or, or whatnot. And the spiritual bypassing that takes place, you know, where people are like, Oh, well the reason this bad thing is happening in your life is because, you know, maybe you've angered some spirits or something along those lines. And, which is really just a fancy way of victim blaming at that point.  Yucca: It's a way of not taking responsibility, James: yeah, exactly. And so that's, that was going back to like the first question. You know, that's, that's another thing that sort of drew me to Athe o Paganism, was that, that that wasn't a part of all this. There was no, there was no road. For that sort of approach to things, you know, personal responsibility and and, you know, taking steps in our own sort of growth and development, you know, are are built in. And that's that's very appealing to me and I think needed, you know, in. Mark: Yeah. One thing that I've really appreciated about many people in the Pagan community, I certainly wouldn't say all of them, but many people in the Pagan community, is that there is this kind of dedication to personal growth, you know, to, to doing the work to become the best people they can and. I just see that as essential. You know, it's like if, if the goal is excellence in how we interact with one another in the world that we create in our engagement with the rest of the natural world in all of that, then it, you know, it starts with the wrestling that's happening in your head and, you know, figuring that stuff out and getting as clear and as kind and as balanced as we can. And so it, so that was one of the things that drew me back towards Paganism. And after I got sick of it, you know, there were those people that were living in a fantasy world and were, you know, causing harm out of that. But then there were these other people who were just amazing. Humble, fantastic, incredible people. And I wanted those people . I, you know, I, I wanted to go back and get them. So that's, that's been part of what this has been about. James: yeah. I've had, and like, you know, I, I skipped over in my story about how I got to aio Paganism. I skipped over a lot of the stuff that I got involved in, looking for ways of like making meaning in the world. That were more solo like, I got into Chaos Magic, and I got into the, you know, I was involved in the Lima for, for a while, Mark: Mm-hmm. James: you know, joined some initiatory orders and, and what have you. And know, it was all, you know, brain hacking, trying to figure out how to make myself that better person, you know, that you just mentioned. And doing it on your own by yourself is often very difficult. And so I, I think having a community that's all also working towards that. And like you said, not everybody involved in those groups was good. But there were definitely some jewels, you know, that stood out. But for some of them, like the, the, the, the Leic community there was a lot of just. I, I pretty much left all of, I left the Lima because of a lot of the just really horrible, toxic stuff. And I've always been a proponent of the idea that whatever it is that you're championing, whatever cause that you're standing behind, whatever beliefs that you are espousing, look around at the other people who are going, Yes, that's what that I'm on, pa on. I'm right there with you. I'm on the same page as you are. You believe what I believe and I absolutely support you. And if those people are neo-Nazis, and if those people are, you know, just you know, white nationalists and racists and terrible people, then you need to, you need to rethink these ideas that you're championing. Cause if they're saying, Oh, no, no, I totally agree with you, I don't think that's a good thing. and, So, you know, I, I, I've had these conversations to get political. I've had these conversations with folks who, you know, espouse like conservative values and whatnot, and they're like, Yeah, but you know, I don't agree with those guys, but yeah, but they agree with you. Like you don't agree with those guys cuz you don't, because they're on, you're just sort of cherry picking, you know, the things of their ideology that they, that you don't agree with. And I don't know that you're actually looking at, at what they believe and what you believe with an unbiased, you know, viewpoint. And I think that your ideas and their ideas line up far more than you're willing to admit to. And because on some level you do agree with them because if they're agreeing with you, how is that not the same thing? You know, if you say XYZ and they're like, Yes, xyz, and then you say, Oh yeah, but I don't agree with their xyz, but it's it's the same xyz. Then, you know, I think that needs some reflection and some rethinking. And so, yeah, I don't know where I was going with that. I've got my mid-afternoon coffee, caffeine hitting my, hitting my head and it's sending me on spirals. Yeah. What were we saying? Yucca: We had been talking about the gyms in the community, and you'd said that you'd kind of skipped over some of the, the, James: yeah, Yucca: the various groups that you'd been involved in and stopped being involved in. James: yeah. Cuz I think when, when, for me it was like a matter of percentages, you know, if there's like three or four people in the community that are absolutely wonder. People and the, the overwhelming majority of the community is not, then that's, then you, you can't, you can't it, I personally can't stay in a community like that. I can't stay involved with a group like that. Like I, it, it's always terrible to have to sort of leave a group because you know you're gonna miss those people probably, especially if you developed any sort of personal relationship with them. And you can always stay, you know, connected with those people outside of that group. But being part of the group itself is just not an option any longer. Again, I think, I feel like you gotta look around at the people who are, who are standing behind you and chanting along with you and see what sort of flags they're waving and, you know, if those are flags that strike you as you know, bad things, then maybe you should think about. You know why it is that they're chanting along with you. And I, and it's mostly been like, you know, events that have taken place here in the US over the last, like six years or so that have really sort of brought that sort of idea to a head for me. You know, or also if you don't, the people who are on your side are championing ideas that actively seek to harm or impede the lives of people you care about, then maybe you should rethink those ideas also, because if you really care about those people, why would you want to promote the things that are going to hurt them, you know? And I feel like in our, to bring it back to, you know, our community, I feel like we are, I feel like we're, we can always do better, but I feel like we're doing a pretty good job. And that is, and that's not to sort of say, you know, to let us off the hook in any way, shape or form. The work is, the work is constant and ongoing and not quick. You know, there is no fast like flip a switch and suddenly you're not racist, you know, or you flip a switch and suddenly you're not ableist anymore. You know, those are, they're patterns of behavior that come about from living in a system that promotes all of those things and oftentimes rewards those things. So, you know, working out of those situations, those methods of thought and whatnot is a. It's a lot of deep work, but I feel like as a community we can support each other in that work. And that's what part of what I was saying about when conversations like that have come up on the Facebook group, you know, people offering up resources, you know, books, you know, books to read and things along those lines. I know we've got, there's like a book club like an atheopagan book club and I think that they've read some, some pretty good books, you know, in, in that regard on some of those issues. I definitely, I'm not a part of it cuz reading books for me is a, it's a whole thing that's gets too complicated to get into right now. But but I definitely encourage them to read more of those books that help work on those issues. You know, everybody likes to read, you know, the fun books. Things like gathering loss is a popular one. Or what's the other, the Mark: reading Sweet Grass. James: Yeah. Braiding, sweetgrass. Those books, those books come up a lot in conversations. and those are great. Yeah. Yeah, they're great. I, I'd like to, you know, I'd like to see more opportunities for for unlearning the sort of problematic tendencies that, that, you know, the overwhelming majority of us tend to have. Mark: Mm. James: cuz that makes the community more accessible to the folks, you know, like I mentioned before, that felt it, you know, this sort of spirituality inaccessible before, Mark: Mm-hmm. James: Yeah. And, and build your own tradit. You know, around that sort of thing cuz that can help reinforce all of that and Mark: You know, I, I need to put in a word about that. I, I wrote a blog post probably four or five months ago now. In which I agree for myself, I, I want to create new culture. But I can see how for people of color, they might want to draw culture from their ancestors forward. Um, and so, you know, when I talk about, when I talk about Ethiopia, Paganism being a modern thing that just got started in the early two thousands, and it's not rooted in any culture that really comes out of the fact that I just designed it for me and I'm this white guy you know, this sort of Mongol American white guy. And I think. I've, I've since done more thinking about that, and I think that it's really important for us to acknowledge that there's a place for drawing indigenous traditions, drawing traditions of African ancestry, you know, drawing those, those pieces forward into the ritual practices of people that come out of those, those ethnicities. James: I, I absolutely agree. I think on, on a personal level, I think, you know, for your own like personal ritual and spiritual life, I think drawing on, on, on your heritage is, is absolutely, although I don't like using that word, heritage I think drawing on that is Backgrounds. is, is, is important and can be really sort of empowering and enriching and whatnot. I think it, where the issue comes in is when the overwhelming majority of a group comes from a particular background Mark: Yeah. James: and they try to make those aspects of their background, the primary focus of the community's background. So like, you know, taking a recent holiday for example. So that's an Irish thing, you know, that's a Gaelic culture cultural thing. Yucca: Mm. Mark: Mm-hmm. James: so everybody's like, everybody talks about sow and it's like, I mean, it's not, it's not like a solar festival, you know, it's not one of the cross quarter you know, holidays that is tied to an astronomical. Or anything along those lines, like the solstice and equinoxes. So it is a very sort of culturally specific thing, and not everybody celebrates that. And so when everybody's almost sort of insisted be called that because Halloween is too much of a, I mean, it's, it's even got its own cultural sort of baggage, you know, in terms of like all Hall's Day being, you know, kind of a, a, a more Christian centric holiday and the whole, the whole co-opting of, of, you know, pagan holidays by Christianity idea and those sorts of things. But I think a lot of people, when, when the community, when the greater community refers to it as a specific cultural thing like sa, those people who did not come, did not grow up in that background. Feel isol, you know, separated and they feel like they're not able to take, they feel excluded. So I feel like as a greater, you know, sort of global community or whatever, coming up with new non culturally specific things is great. And then incorporate in your own personal rituals and whatnot, and even your own local group rituals, incorporate aspects of the, of, of your own background into that. And then your group can each, each person can bring their own cultural background into the mix. And you have this, you know, lovely bouquet of, of mixed flowers, you know, that everybody can enjoy. The but yeah, I think that when people lean into those sort of traditional ideas of the holidays, You know, of our, like, you know, that can be one of the things that isolates people who have traditionally been sort of excluded from these sort of circles, and it makes us less inclusive. You know, I personally celebrate sound because That's my background. You know, I'm 93% Scottish and Irish and with a smidge of, you know, other, you know, I'm a, I'm a American mut, you know, with a blend of, of European backgrounds. And but I wasn't raised in any of those cultures, you know, that's a, so that's a thing. One of my. I don't wanna say pet peeves cuz that's not what it is. One of my issues that I struggle with a lot of times is I don't believe that for the most part Americans have in general, white America doesn't have a recognizable, consistent culture or cultural background to draw from. Which I think is one of the reasons why so many folks look to, like Ancient Ireland and Ancient Scotland or ancient Germany and you know, or Scandinavia, they look to Asat true, you know, because of their roots and their heritage and they, or they look to, you know, like the Celtic sort of stuff because of their, you know, their ancestry. It's like, that's great, but you likely weren't raised with any of those traditions, assuming those traditions are real at all. And so, In a way that's sort of a, it's a hot button topic and I'll probably get flack for it and people will talk about me. But I feel like in a way that's sort of still a matter of cultural appropriation cuz you weren't raised in that culture and there are people who legitimately went through terrible things because of their connection to that culture. They were prohibited from practicing just like here in the United States with the, with, you know, indigenous peoples being legally prohibited from pr, from practicing, you know, you know, uh, their, their ancestral traditions and what whatnot to step up. Having not gone through any of that and just adopt those things and say, Well that's, you know, that's my, that's, you know, my heritage. It's like you're, I. I guess blood wise down the road, always, you've got that connection to people who participated in that. But you, you never did. You're, you know, that's not part of your, your culture for the overwhelming, not for everybody. Obviously there are exceptions. People who are like first generation Americans and whatnot. They may have relatives who who carried some of some older traditions and stuff forward. But this idea of participating in these like ancient traditions, like, I mean, it's, Yucca: I think it doesn't necessarily just have to be first generation either. I mean, there, you know, there's a, James: but those traditions have to have been carried forward. Like, I feel like you need to have been raised in the culture to, to really, because otherwise you're, you are participating in a thing without, without any sort of, you know, you're participating in a thing that other people were punished for without. The threat of punishment, you know, and without having gone through those  Yucca: I, think it's really very specific to different ones. I mean that some, some times when those ancestors were forced to stop, Doing tho having those traditions. You know, my, my father's first language, he was not allowed to speak that outside of the home. And his, you know, his, his mother wasn't allowed to speak it. So I wasn't, I didn't get that language from him. Right. But, but there's still a connection that I have to that culture, right? Or, you know, and, and so for instance, my, my child is relearning the language even though there's a generational gap between, you know, what she was, how she's been raised, the culture that she was raised in, and, and wanting to like to rebrace, right, to reclaim and rekindle some of that. James: And I think as long as, as, as those things are being passed down with the knowledge of, of the struggle that people went through regarding those things, like how the, how the, you know, and that's, you know, the reason that you're doing it. But I think a lot of that is disregarded when people just sort of pick up a book on Celtic paganism or something along those lines, and they think that they're participating in these like ancient Celtic rituals and whatnot, which is Yucca: My personal pet peeve around that is when it gets all lumped into one culture, it's like, wait, but, but we're a lot of different cultures, you know? James: I've been involved in Drewry and things like that, and there's this idea of like this Dr. Reconstructionism and whatnot, which I think is. The fact of the matter is, is we don't know what any of the, there was nothing written down and we don't know what was practiced. So these like ancient rights or ancient rituals, they're not ancient. They're all new modern inventions. And there's that zero evidence that, you know, and there's a lot of hearsay and people are like, Well, no, this was passed down. Word of mouth. It's like, yeah. And we've all played telephone, we've all played that game. And there's a good chance that the way that you're doing things is absolutely nothing like what people did then. You know, and you've got the influence of Christianity and things like that. And to think that, to think that, like, I don't know. I think the assumption that, like the monks that wrote down a lot of this stuff, when they were encountering these new cultures, you know, as they were, were coming into the areas that they weren. Repainting and reinterpreting and just straight up lying about things. I think I, I don't think that's an honest approach to, to what that is. So,  Mark: Well, and, and James, this also goes to the lionization of the ancient, right? I mean, there's that whole idea that because something is old, that it's got a deep validity to it. And that's, that's one that I just. Honestly, I don't go with, I mean, to me, cultures are valid just because they're valid and it doesn't matter whether they started recently or, and then, then there are cultures that aren't so valid, like Joseph Smith's arrangement that has now taken off and has many followers all over the world that you know, the values of, which I find really problematic. But just because something is new doesn't make it invalid. And just because something is old doesn't make it valid. But particularly for people where there's been genocidal effort to extinguish the culture, I think it is really important to be able to say to someone who's, you know, grandfather and father were, you know, grandparents and, and parents were not allowed to speak their native language, that they are still entitled to relearn that language and restart those cultural traditions again. James: Sure, I think. But I think that a lot, and I think a lot of it is for me personally, that's it. It's all continued upon intent. Mark: Mm-hmm. James: if you're, if I think if you're going to do that, then you need to be learning about the struggles that they went through. You need to be informing yourself about the reasons why this is an issue, you know? It's like, you know, the, it's, for me, it's like the, the whole like, you know, When it comes to, like in, in indigenous folks, you get the person who does their 23andme DNA test and they get the thing that says, Oh, you're 0.05% Native American. And they're like, Oh, cool. Well, I'm just gonna start practicing Cherokee, you know, traditions or, or whatnot cuz you know, well I'm part, you know, I'm part Native American and what, and, and not learning why that's a, why that's a problem. Mark: Yeah. James: It's like if you're, I, you know, because in all likelihood, you, you, you really, the only connection you have is a genetic, is a genetic connection to those, you know, to those folks because you've not, you know, I don't know. It's a, it's a, it's a complicated. It's definitely not cut and dry. There are definitely, you know, exceptions to the rule and, and, and all of that good stuff. There's, I come from a, you know, a line of people who are very, very far removed from any of that. I, the, the research that I've done on my own family, you know, I got as far back as like the 15 hundreds to some, you know, Sept of SCOs who, you know, the, the, the McCulloughs or, or whatnot. And they were like a, they didn't have their own tartan, which was a, which was a pretty modern invention. They didn't have their own, you know, sort of clan, steel and motto or insignia or anything. There were like a vassal clan of some other larger clan, but. I wasn't raised with any of that. My grandparents weren't raised with any of that. My great grandparents weren't raised with any of that. You know, if anything, there's more Appalachian you know, traditions and culture, which is a mishmash of, of, you know, a number of things. Because the farther you get from the source, the more diluted those things sort of become, the more integrated with other, you know, cultures and, and, and traditions and whatnot. Those things become and they become their own thing, you know? So like, I feel like for me, like I've, I've, I've tried to educate myself on the struggles of those people from my background who were barred from like my Irish ancestors who were barred from speaking Irish, you know, by the English in my. I try to educate myself about that. And I try not to just take it for granted that I'm just allowed because my, you know, my grandmother's last name was Bailey, you know, and I think that there's the overwhelming majority of people that I have encountered in the Pagan community. That's really the sort of approach. There's this romanticized like idea of like ancient Celtic Ireland, you know, that people pursue. And and it goes, it goes back to the whole escapism thing for me. And you know, I think a lot of people are what draws a lot of people to modern paganism. And the new age movement is a dissatisfaction with the way the world is right now and a lack of sort of, Lack of meaningful internal life you know, to to help give them a sense of comfort and whatnot in, you know, the, the sort of times that we're having. And I think that there's that appeal to, it's the reason we read, you know, that's the reason we read fantasy books and things like that, you know, So for a brief time we can live in a world that is not this one. Mark: Yeah, but this one is so amazing. Yucca: Yeah. James: it really is. You open your eyes and you look at the world around you and you see like really look and see the various processes taking place on the. Smaller levels, you can just keep going. You know, like, Oh, well why does that happen? And there's a whole process involved and it's like, and then you can take a piece of that process and say, Well, why does that happen? And there's this whole other process involved, and it's this like fractal rabbit hole that, you know, winds up down in some quantum, you know, wormhole thing Mark: Some probabilistic. Weird. James: Yeah. Mark: Yeah, James: until we're just speculating, because we really don't know, because we are physically incapable of seeing any more detail from that for now. And you can do the same to the greater scale, you know, because the immensity of this universe and reality in general, as you know, is astounding and incredibly humbling. For me to contemplate. I've spent many a night lying on my back as a kid. I had, I built a skateboard ramp for myself, and there would be times when I would lay down on the deck of that skateboard ramp and living in rural America, there wasn't a lot of street lights and things like that to obscure my view of the sky. And spent a lot of time laying, just looking up at the stars in the moon and whatnot, and always feeling that sensation of sort of being held to the earth. Mark: Hmm. James: Like at any moment I could fall off of it Yucca: Hmm mm. James: into the, you know, the sky, you know, up into the, that vastness, because what is up Mark: Mm-hmm. James: that's arbitrary you know, it's in relation to where, you know, to where the ground is. That's up. Mark: Yeah. James: But in the, in the schema things, there is no up. There's no down. It just, we have to put these sort of descriptions on things to help us make sense because of how limited we are in, in our, in our perception. But I think going back to yet another thing that drew me to a, the o paganism is that whole idea of like, that's, I'm, I'm part of all of that. That's, that, that craziness, that just overwhelming levels of complexity. And like we talked you know, yesterday, mark, about the human brain and how, how little we really know about how it operates. This chunk of fat and water and whatnot that sits inside, you know, this bone on the top of our head or our bodies. Excuse me. Throat thing happening. The, the overwhelming, like, I don't know the awe that sets in Yucca: Mm-hmm. Mark: Mm-hmm. James: the, you just, there are times when it just takes my breath away. And it's the appreciation of that and knowing that every other person who's part of the, you know, not just part of our community, but every other person in the entire world is also part of that. Mark: Mm-hmm. James: And if there's anything that connects us, that's, it's that, you know, we're all part of this sort of greater mechanism. I don't know that like, I guess you could call it an organism if you wanted. Yucca: Mm-hmm. James: You know, I guess it all depends on per. , but we're all tiny, tiny, tiny little pieces of this huge thing that operates in a relatively specific manner. Mark: Mm. James: even though it seems like, you know, at times all of the stuff is so random and whatnot. That's sort of the point, is that that's how it works, is that there's no sort of predetermined path. No one has laid it all out, you know, and mapped everything out. Like what's the point of that? You know? Excuse me, my throat. So Yucca: Yeah. Well, I'll, Yeah. James: having me on.  Yucca: Yeah. So thank you James. This has been, This has been amazing. Mark: It has, it's the, I mean, we've wandered into all these really essential subject matters about, about our path and about our community, and it's just been a really great conversation. Thank you. James: Yeah, thank you for, for tolerating my, my ramblings.  Yucca: Well, thank you for sharing them with us. We really appreciate it. Oh, James: my pleasure. Mark: And we'll see you all next week. Everybody. Have a great week.    .

About JamesJames has been part of AWS for over 15 years. During that time he's led software engineering for Amazon EC2 and more recently leads the AWS Commerce Platform group that runs some of the largest systems in the world, handling volumes of data and request rates that would make your eyes water. And AWS customers trust us to be right all the time so there's no room for error.Links Referenced:Email: jamesg@amazon.comTranscriptAnnouncer: 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: This episode is sponsored in part by our friends at Vultr. 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My thanks to them for sponsoring this ridiculous podcast.Corey: Finding skilled DevOps engineers is a pain in the neck! And if you need to deploy a secure and compliant application to AWS, forgettaboutit! But that's where DuploCloud can help. Their comprehensive no-code/low-code software platform guarantees a secure and compliant infrastructure in as little as two weeks, while automating the full DevSecOps lifestyle. Get started with DevOps-as-a-Service from DuploCloud so that your cloud configurations are done right the first time. Tell them I sent you and your first two months are free. To learn more visit: snark.cloud/duplo. Thats's snark.cloud/D-U-P-L-O-C-L-O-U-D. Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. And I've been angling to get someone from a particular department at AWS on this show for nearly its entire run. If you were to find yourself in an Amazon building and wander through the various dungeons and boiler rooms and subterranean basements—I presume; I haven't seen nearly as many of you inside of those buildings as people might think—you pass interesting departments labeled things like ‘Spline Reticulation,' or whatnot. And then you come to a very particular group called Commerce Platform.Now, I'm not generally one to tell other people's stories for them. My guest today is James Greenfield, the VP of Commerce Platform at AWS. James, thank you for joining me and suffering the slings and arrows I will no doubt be hurling at you.James: Thanks for having me. I'm looking forward to it.Corey: So, let's start at the very beginning—because I guarantee you, you're going to do a better job of giving the chapter and verse answer than I would from a background mired deeply in snark—what is Commerce Platform? It sounds almost like it's the retail website that sells socks, books, and underpants.James: So, Commerce Platform actually spans a bunch of different things. And so, I'm going to try not to bore you with a laundry list of all of the things that we do—it's a much longer list than most people assume even internal to AWS—at its core, Commerce Platform owns all of the infrastructure and processes and software that takes the fact that you've been running an EC2 instance, or you're storing an object in S3 for some period of time, and turns it into a number at the end of the month. That is what you asked for that service and then proceeds to try to give you as many ways to pay us as easily as possible. There are a few other bits in there that are maybe less obvious. One is we're also responsible for protecting the platform and our customers from fraudulent activity. And then we're also responsible for helping collect all of the data that we need for internal reporting to support some of the back-ends services that a business needs to do things like revenue recognition and general financial reporting.Corey: One of the interesting aspects about the billing system is just how deeply it permeates everything that happens within AWS. I frequently say that when it comes to cloud, cost and architecture are foundationally and fundamentally the same exact thing. If your entire service goes down, a few interesting things happen. One, I don't believe a single customer is going to complain other than maybe a few accountants here and there because the books aren't reconciling, but also you've removed a whole bunch of constraints around why things are the way that they are. Like, what is the most efficient way to run this workload?Well, if all the computers suddenly become free, I don't really care about efficiency, so much is, “Oh, hey. There's a fly, what do I have as a flyswatter? That's right, I'm going to drop a building on it.” And those constraints breed almost everything. I've said, for example, that S3 has infinite storage because it does.They can add drives faster than we're able to fill them—at least historically; they added some more replication services—but they're going to be able to buy hard drives faster than the rest of us are going to be able to stretch our budgets. If that constraint of the budget falls away, all bets are really off, and more or less, we're talking about the destruction of the cloud as a viable business entity. No pressure or anything.James: [laugh].Corey: You're also a recent transplant into AWS billing as a whole, Commerce Platform in general. You spent 15 years at the company, the vast majority of that over an EC2. So, either it was you've been exiled to a basically digital Siberia or it was one of those, “Okay, keeping all the EC2 servers up, this is easy. I don't see what people stress about.” And they say, “Oh, ho ho, try this instead.” How did you find yourself migrating over to the Commerce Platform?James: That's actually one I've had a lot from folks that I've worked with. You're right, I spent the first 15 or so years of my career at AWS in EC2, responsible for various things over there. And when the leadership role in Commerce Platform opened up, the timing was fortuitous, and part of it, I was in the process of relocating my family. We moved to Vancouver in the middle of last year. And we had an opening in the role and started talking about, potentially, me stepping into that role.The reason that I took it—there's a few reasons, but the primary reason is that if I look back over my career, I've kind of naturally gravitated towards owning things where people only really remember that they exist when they're not working. And for some reason, you know, I enjoy the opportunity to try to keep those kinds of services ticking over to the point where people don't notice them. And so, Commerce Platform lands squarely in that space. I've always been attracted to opportunities to have an impact, and it's hard to imagine having much more of an impact than in the Commerce Platform space. It underpins everything, as you said earlier.Every single one of our customers depends on the service, whether they think about it or realize it. Every single service that we offer to customers depends on us. And so, that really is the sort of nexus within AWS. And I'm a platform guy, I've always been a platform guy. I like the force multiplier nature of platforms, and so Commerce Platform, you know, as I kind of thought through all of those elements, really was a great opportunity to step in.And I think there's something to be said for, I've been a customer of Commerce Platform internally for a long time. And so, a chance to cross over and be on the other side of that was something that I didn't want to pass up. And so, you know, I'm digging in, and learning quickly, ramping up. By no means an expert, very dependent on a very smart, talented, committed group of people within the team. That's kind of the long and short of how and why.Corey: Let's say that I am taking on the role of an AWS product team, for the sake of argument. I know, keep the cringe down for a second, as far as oh, God, the wince is just inevitable when the idea of me working there ever comes up to anyone. But I have an idea for a service—obviously, it runs containers, and maybe it does some other things as well—going from idea to six-pager to MVP to barely better than MVP day-one launch, and at some point, various things happen to that service. It gets staff with a team, objectives and a roadmap get built, a P&L and budget, and a pricing model and the rest. One the last thing that happens, apparently, is someone picks the worst name off of a list of candidates, slaps it on the product, and ships it off there.At what point does the billing system and figuring out the pricing dimensions for a given service tend to factor in? Is that a last-minute story? Is that almost from the beginning? Where along that journey does, “Oh, by the way, we're building this thing. Maybe we should figure out, I don't know, how to make money from it.” Factor into the conversation?James: There are two parts to that answer. Pretty early on as we're trying to define what that service is going to look like, we're already typically thinking about what are the dimensions that we might charge along. The actual pricing discussions typically happen fairly late, but identifying those dimensions and, sort of, the right way to present it to customers happens pretty early on. The thing that doesn't happen early enough is actually pulling the Commerce Platform team in. but it is something that we're going to work this year to try to get a little bit more in front of.Corey: Have you found historically that you have a pretty good idea of how a service is going to be priced, everything is mostly thought through, a service goes to either private preview or you're discussing about a launch, and then more or less, I don't know, someone like me crops up with a, “Hey, yeah, let's disregard 90% of what the service does because I see a way to misuse the remaining 10% of it as a database.” And you run some mental math and realize, “Huh. We're suddenly giving, like, eight petabytes of storage per customer away for free. Maybe we should guard against that because otherwise, it's rife with misuse.” It used to be that I could find interesting ways to sneak through the cracks of various services—usually in pursuit of a laugh—those are getting relatively hard to come by and invariably a lot more trouble than they're worth. Is that just better comprehensive diligence internally, is that learning from customers, or am I just bad at this?James: No, I mean, what you're describing is almost a variant of the Defender's Dilemma. They are way more ways to abuse something than you can imagine, and so defending against that is pretty challenging. And it's important because, you know, if you turn the economics of something upside down, then it just becomes harder for us to offer it to customers who want to use it legitimately. I would say 90% of that improvement is us learning. We make plenty of mistakes, but I think, you know, one of the things that I've always been impressed by over my time here is how intentional we are trying to learn from those mistakes.And so, I think that's what you're seeing there. And then we try very hard to listen to customers, talk to folks like you, because one of the best ways to tackle anything it smells of the Defender's Dilemma is to harness that collective creativity of a large number of smart people because you really are trying to cover as much ground as possible.Corey: There was a fun joke going around a while back of what is the most expensive environment you can get running on a free tier account before someone from AWS steps in, and I think I got it to something like half a billion dollars in the first month. Now, I haven't actually tested this for reasons that mostly have to do with being relatively poor compared to, you know, being able to buy Guam. And understanding as well the fraud protections built into something like AWS are largely built around defending against getting service usage for free that in some way, shape or form, benefits the attacker. The easy example of that would be mining cryptocurrency, which is just super-economic as long as you use someone else's AWS account to do it. Whereas a lot of my vectors are, “Yeah, ignore all of that. How do I just make the bill artificially high? What can I do to misuse data transfer? And passing a single gigabyte through, how much can I make that per gigabyte cost be?” And, “Oh, circular replication and the Lambda invokes itself pattern,” and basically every bad architectural decision you can possibly make only this time, it's intentional.And that shines some really interesting light on it. And I have to give credit where due, a lot of that didn't come from just me sitting here being sick and twisted nearly so much as it did having seen examples of that type of misconfiguration—by mistake—in a variety of customer accounts, most confidently my own because it turns out that the way I learn things is by screwing them up first.James: Yeah, you've touched on a couple of different things in there. So, you know, maybe the first one is, I typically try to draw a line between fraud and abuse. And fraud is essentially trying to spend somebody else's money to get something for free. And we spent a lot of time trying to shut that down, and we're getting really good at catching it. And then abuse is either intentional or unintentional. There's intentional abuse: You find a chink in our armor and you try to take advantage of it.But much more commonly is unintentional abuse. It's not really abuse, you know. Abuse has very negative connotations, but it's unintentionally setting something up so that you run up a much larger bill than you intended. And we have a number of different internal efforts, and we're working on a bunch more this year, to try to catch those early on because one of my personal goals is to minimize the frequency with which we surprise customers. And the least favorite kind of surprise for customers is a [laugh] large bill. And so, what you're talking about there is, in a sufficiently complex system, there's always going to be weaknesses and ways to get yourself tied up in knots.We're trying both at the service team level, but also within my teams to try to find ways to make it as hard as possible to accidentally do that to yourself and then catch when you do so that we can stop it. And even more on the intentional abuse side of things, if somebody's found a way to do something that's problematic for our services, then you know, that's pretty much on us. But we will often reach out and engage with whoever's doing and try to understand what they're trying to do and why. Because often, somebody's trying to do something legitimate, they've got a problem to solve, they found a creative way to solve it, and it may put strain on the service because it's just not something we designed for, and so we'll try to work with them to use that to feed into either new services, or find a better place for that workload, or just bolster what they're using. And maybe that's something that eventually becomes a fully-fledged feature that we offer the customers. We're always open to learning from our customers. They have found far more creative ways to get really cool things done with our services than we've ever imagined. And that's true today.Corey: I mean, most of my service criticisms come down to the fact that you have more-or-less built a very late model, high performing iPad, and I'm out there complaining about, “What a shitty hammer this thing is, it barely works at all, and then it breaks in my hand. What gives?” I would also challenge something you said a minute ago that the worst day for some customers is to get a giant surprise bill, but [unintelligible 00:13:53] to that is, yeah, but, on some level, that kind of only money; you do have levers on your side to fix those issues. A worse scenario is you have a customer that exhibits fraud-like behavior, they're suddenly using far more resources than they ever did before, so let's go ahead and turn them off or throttle them significantly, and you call them up to tell them you saved them some money, and, “Our Superbowl ad ran. What exactly do you think you're doing?” Because they don't get a second bite at that kind of Apple.So, there's a parallel on both sides of this. And those are just two examples. The world is full of nuances, and at the scale that you folks operate at. The one-in-a-million events happen multiple times a second, the corner cases become common cases, and I'm surprised—to be direct—how little I see you folks dropping the ball.James: Credit to all of the teams. I think our secret sauce, if anything, really does come down to our people. Like, a huge amount of what you see as hopefully relatively consistent, good execution comes down to people behind the scenes making sure. You know, like, some of it is software that we built and made sure it's robust and tested to scale, but there's always an element of people behind the scenes, when you hit those edge cases or something doesn't quite go the way that you planned, making sure that things run smoothly. And that, if anything, is something that I'm immensely proud of and is kind of amazing to watch from the inside.Corey: And, on some level, it's the small errors that are the bigger concern than the big ones. Back a couple years ago, when they announced GP3 volumes at re:Invent, well, great, well spin up a test volume and kick the tires on it for an hour. And I think it was 80 or 100 gigs or whatnot, and the next day in the bill, it showed up as about $5,000. And it was, “Okay, that's not great. Not great at all.” And it turned out that it was a mispricing error by I think a factor of a million.And okay, at least it stood out. But there are scenarios where we were prepared to pay it because, oops, you got one over on us. Good job. That's never been the mindset I've gotten about AWS's philosophy for pricing. The better example that I love because no one took it seriously, was a few years before that when there was a LightSail bug in the billing system, and it made the papers because people suddenly found that for their LightSail instance, they were getting predicted bills of $4 billion.And the way I see it, you really only had to make that work once and then you've made your numbers for the year, so why not? Someone's going to pay for it, probably. But that was such out-of-the-world numbers that no one saw that and ever thought it was anything other than a bug. It's the small pernicious things that creep in. Because the billing system is vast; I had no idea when I started working with AWS bills just how complicated it really was.James: Yeah, I remember both of those, and there's something in there that you touched on that I think is really important. That's something that I realized pretty early on at Amazon, and it's why customer obsession is our flagship leadership principle. It's not because it's love and butterflies and unicorns; customer obsession is key to us because that's how you build a long-term sustainable business is your customers depend on you. And it drives how we think about everything that we do. And in the billing space, small errors, even if there are small errors in the customer's favor, slowly erode that trust.So, we take any kind of error really seriously and we try to figure out how we can make sure that it doesn't happen again. We don't always get that right. As you said, we've built an enormous, super-complex business to growing really quickly, and really quick growth like that always acts as kind of a multiplier on top of complexity. And on the pricing points, we're managing millions of pricing points at the moment.And our tools that we use internally, there's always room for improvement. It's a huge area of focus for us. We're in the beginning of looking at applying things like formal methods to make sure that we can make very hard guarantees about the correctness of some of those. But at the end of the day, people are plugging numbers in and you need as many belts and braces as possible to make sure that you don't make mistakes there.Corey: One of the things that struck me by surprise when I first started getting deep into this space was the fact that the finalized bill was—what does it mean to have this be ‘finalized?' It can hit the Cost and Usage Report in an S3 bucket and it can change retroactively after the month closed periodically. And that's when I started to have an inkling of a few things: Not just the sheer scale and complexity inherent to something like the billing system that touches everything, but the sheer data retention stories where you clearly have to be able to go back and reconstruct a bill from the raw data years ago. And I know what the output of all of those things are in the form of Cost and Usage Reports and the billing data from our client accounts—which is the single largest expense in all of our AWS accounts; we spent thousands and thousands and thousands of dollars a year just on storing all of that data, let alone the processing piece of it—the sheer scale is staggering. I used to wonder why does it take you a day to record me using something to it's showing up in the bill? And the more I learned the more it became a how can you do that in only a day?James: Yes, the scale is actually mind-boggling. I'm pretty sure that the core of our billing system is—I'm reasonably confident it's the largest or one of the largest data processing systems on the planet. I remember pretty early on when I joined Commerce Platform and was still starting to wrap my head around some of these things, Googling the definition of quadrillion because we measured the number of metering events, which is how we record usage in services, on a daily basis in the quadrillions, which is a billion billions. So, it's just an absolutely staggering number. And so, the scale here is just out of this world.That's saying something because it's not like other services across AWS are small in their own right. But I'm still reasonably sure that being one of a handful of services that is kind of at the nexus of AWS and kind of deals with the aggregate of AWS's scale, this is probably one of the biggest systems on the planet. And that shows up in all sorts of places. You start with that input, just the sheer volume of metering events, but that has to produce as an output pretty fine-grained line item detailed information, which ultimately rolls up into the total that a customer will see in their bill. But we have a number of different systems further down the pipeline that try to do things like analyze your usage, make sensible recommendations, look for opportunities to improve your efficiency, give you the ability to slice and dice your data and allocate it out to different parts of your business in whatever way it makes sense for your business. And so, those systems have to deal with anywhere from millions to billions to recently, we were talking about trillions of data points themselves. And so, I was tangentially aware of some of the scale of this, but being in the thick of it having joined the team really just does underscore just how vast the systems are.Corey: I think it's, on some level, more than a little unfortunate that that story isn't being more widely told, more frequently. Because when Commerce Platform has job postings that are available on the website, you read it and it's very vague. It doesn't tend to give hard numbers about a lot of these things, and people who don't play in these waters can easily be forgiven for thinking the way that you folks do your job is you fire up one of those 24 terabyte of RAM instances that—you know, those monstrous things that you folks offer—and what do you do next? Well, Microsoft Excel. We have a special high memory version that we've done some horse-trading with our friends over at Microsoft for.It's, yeah, you're several steps beyond that, at this point. It's a challenging problem that every one of your customers has to deal with, on some level, as well. But we're only dealing with the output of a lot of the processing that you folks are doing first.James: You're exactly right. And a big focus for some of my teams is figuring out how to help customers deal with that output. Because even if you're talking about couple of orders of magnitude reduction, you're still talking about very large numbers there. So, to help customers make sense of that, we have a range of tools that exist, we're investing in.There's another dimension of complexity in the space that I think is one that's also very easy to miss. And I think of it as arbitrary complexity. And it's arbitrary because some of the rules that we have to box within here are driven by legislative changes. As you operate more and more countries around the world, you want to make sure that we're tax compliant, that we help our customers be tax compliant. Those rules evolve pretty rapidly, and Country A may sit next to Country B, but that doesn't mean that they're talking to one another. They've all got their own ideas. They're trying to accomplish r—00:22:47Corey: A company is picking up and relocating from India to Germany. How do we—James: Exactly.Corey: —change that on the AWS side and the rest? And it's, “Hoo boy, have you considered burning it all down and filing an insurance claim to start over?” And, like, there's a lot of complexity buried underneath that that just doesn't rise to the notice of 99% of your customers.James: And the fact that it doesn't rise to the notice is something that we strive for. Like, these shouldn't be things that customers have to worry about. Because it really is about clearing away the things that, as far as possible, you don't want to have to spend time thinking about so that you can focus on the thing that your business does that differentiates you. It's getting rid of that undifferentiated heavy lifting. And there's a ton of that in this space, and if you're blissfully unaware of it, then hopefully that means that we're doing our job.Corey: What I'm, I think, the most surprised about, and I have been for a long time. And please don't take this as an insult to various other folks—engineers, the rest, not just in other parts of AWS but throughout the other industry—but talking to the people who work within Commerce Platform has always been just a fantastic experience. The caliber of people that you have managed to attract and largely retain—we don't own people, they do matriculate out eventually—but the caliber of people that you've retained on your teams has just been out of this world. And at first, I wondered, why are these awesome people working on something as boring and prosaic as billing? And then I started learning a little bit more as I went, and, “Oh, wow. How did they learn all the stuff that they have to hold in their head in tension at once to be able to build things like this?” It's incredibly inspiring just watching the caliber of the people that you've been able to bring in.James: I've been really, really excited joining this team, as I've gotten other folks on the team because there's some super-smart people here. But what's really jumped out to me is how committed the team is. This is, for the most part, a team that has been in the space for many years. Many of them have—we talk about boomerangs, folks who live AWS, go spend some time somewhere else and come back and there's a surprisingly high proportion of folks in Commerce Platform who have spent time somewhere else and then come back because they enjoy the space, they find that challenging, folks are attracted to the ability to have an impact because it is so foundational. But yeah, there's a super-committed core to this team. And I really enjoy working with teams where you've got that because then you really can take the long view and build something great. And I think we have tons of opportunities to do that here.Corey: It sounds ridiculous, but I've reached out to team members before to explain two-cent variances in my bill, and never once have I been confronted with a, “It's two cents. What do you care?” They understand the requirement that these things be accurate, not just, “Eh, take our word for it.” And also, frankly, they understand that two cents on a $20 bill looks a little different on a $20 million bill. So yeah, let us figure out if this is systemic or something I have managed to break.It turns out the Cost and Usage Report processing systems don't love it when there's a cost allocation tag whose name contains an emoji. Who knew? It's the little things in life that just have this fun way of breaking when you least expect it.James: They're also a surprisingly interesting problem. So like, it turns out something as simple as rounding numbers consistently across a distributed system at this scale, is a non-trivial problem. And if you don't, then you do get small seventh or eighth decimal place differences that add up to something that then shows up as a two-cent difference somewhere. And so, there's some really, really interesting problems in the space. And I think the team often takes these kinds of things as a personal challenge. It should be correct, and it's not, so we should go make sure it is correct. The interesting problems abound here, but at the end of the day, it's the kind of thing that any engineering team wants to go and make sure it's correct because they know that it can be.Corey: This episode is sponsored in parts by our friend EnterpriseDB. EnterpriseDB has been powering enterprise applications with PostgreSQL for 15 years. And now EnterpriseDB has you covered wherever you deploy PostgreSQL on premises, private cloud, and they just announced a fully managed service on AWS and Azure called BigAnimal, all one word. Don't leave managing your database to your cloud vendor because they're too busy launching another half dozen manage databases to focus on any one of them that they didn't build themselves. Instead, work with the experts over at EnterpriseDB. They can save you time and money, they can even help you migrate legacy applications, including Oracle, to the cloud.To learn more, try BigAnimal for free. Go to biganimal.com/snark, and tell them Corey sent you.Corey: On the one hand, I love people who just round and estimate—we all do that, let's be clear; I sit there and I back-of-the-envelope everything first. But then I look at some of your pricing pages and I count the digits after the zeros. Like, you're talking about trillionths of a dollar on some of your pricing points. And you add it up in the course of a given hour and it's like, oh, it's $250 a month, most months. And it's you work backwards to way more decimal places of precision than is required, sometimes.I'm also a personal fan of the bill that counts, for example, number of Route 53 zones. Great. And it counts them to four decimal places of precision. Like, I don't even know what half of it Route 53 zone is at this point, let alone something to, like, ah the 1,000th of the zone is going to cause this. It's all an artifact of what the underlying systems are.Can you by any chance shed a little light on what the evolution of those systems has been over a period of time? I have to imagine that anything you built in the early days, 16 years ago or so from the time of this recording when S3 launched to general availability, you probably didn't have to worry about this scope and scale of what you do, now. In fact, I suspect if you tried to funnel this volume through S3 back then, the whole thing would have collapsed under its own weight. What's evolved over the time that you had the billing system there? Because changes come slowly to your environment. And frankly, I appreciate that as a customer. I don't like surprising people in finance.James: Yeah, you're totally right. So, I joined the EC2 team as an engineer myself, some 16 years ago, and the very first thing that I did was our billing integration. And so, my relationship with the Commerce Platform organization—what was the billing team way back when—it goes back over my entire career at AWS. And at the time, the billing team was similar, you know, [unintelligible 00:28:34] eight people. And that was everything. There was none of the scale and complexity; it was all one system.And much like many of our biggest, oldest services—EC2 is very similar, S3 is as well—there's been significant growth over the last decade-and-a-half. A lot of that growth has been rapid, and rapid growth presents its own challenges. And you live with decisions that you make early on that you didn't realize were significant decisions that have pretty deep implications 15 years later. We're still working through some of those; they present their own challenges. Evolving an existing system to keep up with the growth of business and a customer base that's as varied and complex as ours is always challenging.And also harder but I also think more fun than a clean sheet redo at this point. Like, that's a great thought exercise for, well, if we got to do this again today, what would we do now that we've learned so much over the last 15 years? But there's this—I find it personally fascinating challenge with evolving a live system where it's like, “No, no, like, things exist, so how do we go from there to where we want to be next?”Corey: Turn the billing system off for 18 months, rebuild—James: Yeah. [laugh].Corey: The whole thing from first principles. Light it up. I'm sure you'd have a much better billing system, and also not a company left anymore.James: [laugh]. Exactly, exactly. I've always enjoyed that challenge. You know, even prior to AWS, my previous careers have involved similar kinds of constraints where you've got a live system, or you've got an existing—in the one case, it was an existing SDK that was deployed to tens of thousands of customers around the world, and so backwards compatibility was something that I spent the first five years of my career thinking about it way more detail than I think most people do. And it's a very similar mindset. And I enjoy that challenge. I enjoy that: How do I evolve from here to there without breaking customers along the way?And that's something that we take pretty seriously across AWS. I think SimpleDB is the poster child for we never turn things off. But that applies equally to the services that are maybe less visible to customers, and billing is definitely one of them. Like, we don't get to switch stuff off. We don't get to throw things away and start again. It's this constant state of evolution.Corey: So, let's say that I were to find a way to route data through a series of two Managed NAT Gateways and then egress to internet, and the sheer density of the expense of that traffic tears a hole in the fabric of space-time, it goes back 15 years ago, and you can make a single change to how the billing system was built. What would it be? What pisses you off the most about the current constraints that you have to work within or around?James: I think one of the biggest challenges we've got, actually, is the concept of an account. Because an account means half-a-dozen different things. And way back, when it seemed like a great idea, you just needed an account; an account was your customer, and it was the same thing as the boundary that you put all your resources inside. And of course, it's the same thing that you're going to roll all of your usage up and issue a bill against. And that has been one of the areas that's seen the most evolution and probably still has a pretty long way to go.And what's interesting about that is, that's probably something we could have seen coming because we watched the retail business go through, kind of, the same evolution because they started with, well, a customer is a customer is a customer and had to evolve to support the concept of sellers and partners. And then users are different than customers, and you want to log in and that's a different thing. So, we saw that kind of bifurcation of a single entity into a wide range of different related but separate entities, and I think if we'd looked at that, you know, thought out 15 years, then yeah, we could probably have learned something from that. But at the same time, when AWS first kicked off, we had wild ambitions for it, but there was no guarantee that it was going to be the monster that it is today. So, I'm always a little bit reluctant to—like, it's a great thought exercise, but it's easy to end up second-guessing a pretty successful 15 years, so I'm always a little bit careful to walk that line. But I think account is one of the things that we would probably go back and think about a little bit more.Corey: I want to be very clear with this next question that it is intentionally setting up a question I suspect you get a lot. It does not mirror my own thinking on the matter even slightly, but I get a version of it myself all the time. “AWS bills, that sounds boring as hell. Why would you choose to work on such a thing?” Now, I have a laundry list of answers to that aren't nearly as interesting as I suspect yours are going to be. What makes working on this problem space interesting to you?James: There's a bunch of different things. So, first and foremost, the scale that we're talking about here is absolutely mind-blowing. And for any engineer who wants to get stuck into problems that deal with mind-blowingly large volumes of data, incredibly rich dimensions, problems where, honestly, applying techniques like statistical reasoning or machine learning is really the only way to chip away at it, that exists in spades in the space. It's not always immediately obvious, and I think from the outside, it's easy to assume this is actually pretty simple. So, the scale is a huge part of that.Corey: “Oh, petabytes. How quaint.”James: [laugh]. Exactly. Exactly I mean, it's mind-blowing every time I see some of the numbers in various parts of the Commerce Platform space. I talked about quadrillions earlier. Trillions is a pretty common unit of measure.The complexity that I talked about earlier, that's a result of external environments is another one. So, imposed by external entities, whether it's a government or a tax authority somewhere, or a business requirement from customers, or ourselves. I enjoy those as well. Those are different kinds of challenge. They really keep you on your toes.I enjoy thinking of them as an engineering problem, like, how do I get in front of them? And that's something we spend a lot of time doing in Commerce Platform. And when we get it right, customers are just unaware of it. And then the third one is, I personally am always attracted to the opportunity to have an impact. And this is a space where we get to hopefully positively impact every single customer every day. And that, to me is pretty fulfilling.Those are kind of the three standout reasons why I think this is actually a super-exciting space. And I think it's often an underestimated space. I think once folks join the team and sort of start to dig in, I've never heard anybody after they've joined, telling me that what they're doing is boring. Challenging, yes. Is frustrating, sometimes. Hard, absolutely, but boring never comes up.Corey: There's almost no service, other than IAM, that I can think of that impacts every customer simultaneously. And it's easy for me to sit in the cheap seats and say, “Oh, you should change this,” or, “You should change that.” But every change you have is so massive in scale that it's going to break a whole bunch of companies' automations around the bill processing in different ways. You have an entire category of user persona who is used to clicking a certain button in this certain place in the console to generate the report every month, and if that button moves or changes color, or has a different font, suddenly that renders their documentation invalid, and they're scrambling because it's not their core competency—nor should it be—and every change you make is so constricted, just based upon all the different concerns that you've got to be juggling with. How do you get anything done at all? I find that to be one of the most impressive aspects about your organization, bar none.James: Yeah, I'm not going to lie and say that it isn't a challenge, but a lot of it comes down to the talent that we have on the team. We have a super-motivated, super-smart, super-engaged team, and we spend a lot of time figuring out how to make sure that we can keep moving, keep up with the business, keep up with a world that's getting more complicated [laugh] with every passing day. So, you've kind of hit on one of the core challenges there, which is, how do we keep up with all of those different dimensions that are demanding an increasing amount of engineering and new support and new investment from us, while we keep those customers happy?And I think you touched on something else a little bit indirectly there, which is, a lot of our customers are actually pretty technical across AWS. The customers that Commerce Platform supports, are often the least technical of our customers, and so often need the most help understanding why things are the way they are, where the constraints are.Corey: “A big bill from Amazon. How many books did you people buy last month?”—James: [laugh]. Exactly.Corey: —is still very much level of understanding in some cases. And it's not because they're dumb; far from it. It's just, imagine that some people view there as being more to life than understanding the nuances and intricacies of cloud computing. How dare they?James: Exactly. Who would have thought?Corey: So, as you look now over all of your domain, such as it is, what sucks the most? What are you looking to fix as far as impactful changes that the rest of the world might experience? Because I'm not going to accept one of those questions like, “Oh, yeah, on the back-end, we have this storage subsystem for a tertiary thing that just annoys me because it wakes us up once in a whi”—no, no, I want something customer-facing. What's the painful thing you're looking at fixing next?James: I don't like surprising customers. And free tier is, sort of, one of those buckets of surprises, but there are others. Another one that's pretty squarely in my sights is, whether we like it or not, customer accounts get compromised. Usually, it's a password got reused somewhere or was accidentally committed into a GitHub repository somewhere.And we have pretty established, pretty effective mechanisms for finding all of those, we'll scan for passwords and credentials, and alert customers to those, and help them correct that pretty quickly. We're also actually pretty good at detecting when an account does start to do something that suggests that it's been compromised. Usually, the first thing that a compromised account starts to do is cryptocurrency mining. We're pretty quick to catch those; we catch those within a matter of hours, much faster most days.What we haven't really cracked and where I'm focused at the moment is getting back to the customer in a way that's effective. And by that I mean specifically, we detect an account compromised super-quickly, we reach out automatically. And so, you know, a customer has got some kind of contact from us usually within a couple of hours. It's not having the effect that we need it to. Customers are still being surprised a month later by a large bill. And so, we're digging into how much of that is because they never saw the contact, they didn't know what to do with the contact.Corey: It got buried with all the other, “Hey, we saw you spun up an S3 bucket. Have you heard of what S3 is?” Again, that's all valuable, but you have 300-some-odd services. If you start doing that for every service, you're going to hit mail sending limits for Gmail.James: Exactly. It's not just enough that we detect those and notify customers; we have to reduce the size of the surprise. It's one thing to spend 100 bucks a month on average, and then suddenly find that your spend has jumped $250 because you reused the password somewhere and somebody got ahold of it and it's cryptocurrency-mining your account. It's a whole different ballgame to spend 100 bucks a month and then at the end of the month discover that your bill is suddenly $2,000 or $20,000. And so, that's something that I really wanted to make some progress on this year. Corey: I've really enjoyed our conversation. If people want to learn more about how you view these things, how you're approaching some of these problems, or potentially are just the right kind of warped to consider joining up, where's the best place for them to go?James: They should drop me an email at jamesg@amazon.com. That is the most direct way to get hold of me, and I promise I will get back to you. I try to stay on top of my email as much as possible. But that will come straight to me, and I'm always happy to talk to folks about the space, talk to folks about opportunities in this team, opportunities across AWS, or just hear what's not working, make sure that it's something that we're aware of and looking at.Corey: Throughout Amazon, but particularly within Commerce Platform, I've always appreciated the response of, whenever I report something, no matter how ridiculous it is—and I assure you there's an awful lot of ridiculousness in my bug reports—the response has always been the same: “Tell me more. Help me understand what it is you're trying to achieve—even if it is ridiculous—so we can look at this and see what is actually going on.” Every Amazonian team has been great about that or you're not at Amazon very long, but you folks have taken that to an otherworldly level. I just want to thank you for doing that.James: I appreciate you for calling that out. We try, you know, we really do. We take listening to our customers very seriously because, at the end of the day, that's what makes us better, and that's how we make sure we're in it for the long haul.Corey: Thanks once again for being so generous with your time. I really appreciate it.James: Yeah, thanks for having me on. I've enjoyed it.Corey: James Greenfield, VP of Commerce Platform at AWS. 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—possibly on YouTube as well—about how you aren't actually giving this five-stars at all; you have taken three trillions of a star off of the rating.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.

The presenter is James Thurston, G3ict, who is joined by Chris Misra, University of Massachusetts, Amherts.  SPEAKER: Please welcome James Thurston and Chris Misra.  James is the Vice President for G3ict, where he leads the design and implementation of new worldwide advocacy strategies and programs to scale up G3ict's global impact. G3ict is the global Initiative for Inclusive Information and Communication Technologies promoting the rights of Persons with Disabilities in the Digital Age.   Chris is the Vice Chancellor and CIO at the University of Massachusetts – Amherst.  At the University of Massachusetts Amherst, information technology plays a crucial role in many key areas, including but not limited to student success and engagement, research competitiveness, and multi-modal education.   Today they will be looking at how leveraging accessibility and inclusion can provide an adaptive and accessible multi-modal IT ecosystem to support campuses. Chris will review findings, digital inclusion gaps, next steps for improvements at the University of Massachusetts – Amherst and more!   JAMES: Our goal with this session is to share with all of you some detail about how the U Mass approach to being more accessible, more inclusive through technology. Through its technology assets and deployments and Chris and I over the next hour want to surface and share with you, I think, what are some valuable and actionable experiences from U-mass, that will hopefully apply to your own accessibility journey in your higher education institution. This particular session is the third in the IAAP higher ed series. It's also the first of the next three sessions, which relate to, and are sort of sourced from, G3ict's work with universities and higher education institutions, using our smart university digital inclusion maturity model tool. And I'm just going to briefly give you a little bit of information on that, just so it will make a little bit more sense as Chris and I start to have a conversation about our work with Chris and what Chris has been leading and driving there at the University of Massachusetts model. The smart university digital inclusion maturity model tool, it's an assessment tool and a benchmarking tool. And it's really to help universities better understand how their digital transformation, how they're using technology, how their use of data is either supporting accessibility inclusion of people with disabilities or potentially presenting barriers to the inclusion of people with disabilities, including faculty, staff and students. And even, really, the broader community where the university might sit. So, the tool itself, the assessment tool, it's made up of 28 variables, we call them enablers, and they define what it really means to be an inclusive smart university. They enable accessibility and enable inclusion. These variables, or enablers, contribute to the university's building up the capabilities that we know support greater inclusion in accessibility at a university. And these capabilities, and with the tool we're able to look at the role of things like leadership, the existence of a digital inclusion strategy or not, we look at the accessibility of the university's engagement channels, how it's pushing information out, getting information back, are those accessible, we look at things like the culture of diversity, is the university employing people with disabilities, is it training on disability and accessibility. We look at things like procurement, what systems does the university have in place to make sure that its investments in technology and its deployments of technology are accessible. So, a whole range of issues that we know are pretty critical to a university becoming increasingly accessible, increasingly inclusive. And, of course, we do dig into technology and data, which are the backbone and the life blood of a smart university. And the way that we use these variables, these 28 enablers, these 18 capabilities, is in a three-step process. That is pretty straightforward. We do some analysis of documents, I.T. strategies, digital inclusion strategies, budgets, accessibility statements. We do some analysis of those. We make available to the university an online self-assessment where they sort of write themselves across these variables. And then we actually do an expert site visit where we curate a team of global experts on inclusion and accessibility and bring them in to engage with the university, dig into some of these variables, and hopefully, at the same time, provide some help and assistance on pain points, issues that the university might be experiencing. And then the final step is we deliver a road map, which includes a set of scores for each of these variables and a set of priorities and recommendations for moving forward. So, if you're at a level 2 on a scale of 1 to 5 for procurement, these are the kinds of things you might think about doing to get to levels 3, 4 and 5. So pretty straightforward. The process with U Mass, we'll be talking -- jumping in with Chris in just a minute. We, I think, started that process last spring and sort of did the site visit, I think, in early summer this past year. And in that process, we reviewed probably more than 20 documents, these budgets, these strategies, these org charts, policy statements. We talked with more than 40 U Mass faculty and staff over ten different listening sessions. And then we delivered the road map. And in the road map, U Mass, I think, had real relative strengths in the area of leadership and other areas identified where there's an opportunity to really make some steps to have some improvements in the capabilities and ultimately in the accessibility and inclusion there. So that's a little bit of a background on how G3ict came to be working with U Mass. I thought it might be useful to sort of frame our conversation. And with that, I'm really excited now, and I've been I've been looking forward to this discussion, Chris, for quiet a while, of jumping in with you and hearing a little bit about the U Mass Amherst journey, where you are, where you're headed but maybe we can start, if you can tell us a little bit about the University of Massachusetts Amherst, give us a general sense of the university and how you're deploying technology there. CHRIS: Sure, thanks, James. So, U-Mass Amherst, for those of you who aren't familiar with Massachusetts geography, I grew up in Massachusetts, so I know, we're about 90 minutes west of Boston, 175 miles north northeast of New York City. It's a relatively rural area, but it's a significant institution. We have about 24,000 undergraduate students, about 7,500 graduate students. About 1,500, instructional faculty. Largest state institution in New England, research one, $233 million, $1.3 billion budget, big. 1500-acre campus, which is the biggest thing is trying to find your way around the campus. Our journey of accessibility came about really through just conversations and advocacy within the campus in terms of this has to be a key responsibility for us. Our technology platform is really very traditional, higher education. We migrated many of our services to the Cloud, excessive use of Zoom recently, Google, exchanging out platforms, and the challenge with the campus of this size is really just managing the breadth and depth of both a campus and a highly decentralized institution. JAMES: Great, thanks, Chris. We probably started having conversations about a year ago, actually, just as we were coming into the pandemic and universities, in particular, I think, we're scrambling to try to figure out, okay, how do we fulfill our mission in this environment. Can you talk a little bit about sort of what that looked like as we were coming into the pandemic from a CIO perspective, the kinds of things that you were thinking about and needing to take steps on? CHRIS: Sure. There were sort of two interesting aspects. I mean, aside from it's amongst the longest days of my career in the past and probably ever going forward just in terms of how do you migrate an institution that size to an online education. We made a very early determines, we were one of the early schools who decided to go remote, we thought it would be two weeks, we took a double spring break. We quickly ramped up the technology portfolio. We were fortunate that we already had tools like Zoom, we had pretty good practice of online education, fairly robust online education school, but not a lot of digitally native capacity to teach instructionally remote. So, there's really two principal areas of impact. There's a principal area of impact in academics, and the impact in administration. Since we extended out the spring break for an extra week, we actually had two weeks to figure out how we were going to do these academics. But that meant we had to move the administration into an online world in a very short order of time. From the basic things, how are we going to pick up the mail to how are we going to communicate, how do staff meetings work, and recognizing that institutionally we were a face-to-face campus, our staff meetings were face to face, our one-on-one meetings were face to face and we had to comport all of that. So, the social change was actually significant, and that led quickly to substantial change in the academic side as well. We saw increases of -- astounding increases in Zoom utilization. One of my favorite statistics on Zoom utilization is in the first week of -- I'm sorry -- in the first day of the first week when we brought our academics online, we used more Zoom time the entire month previously. So, each day in April, we used the same number of Zoom hours in the entire month of February. And that pace continued through the balance of the spring semester. JAMES: Chris, I remember that data point as well. And I often use it myself because I think it is a really easy, compelling example of this accelerated digital transformation. Can you talk a little bit about where -- how accessibility fits into I.T. and into the university in general? I know, you've got a really great I.T. strategy, accessibility is embedded in there. I don't think that there's a specific digital inclusion or necessarily accessibility strategy, but maybe a little bit about strategy and organizational structure, just so we understand how accessibility fits in. CHRIS: Absolutely. So, we've actually been fortunate from an I.T. perspective, we've had staff supporting accessibility but a very modest staff. I think when James did the assessment, we had a single staff member, at a high point we had two staff, and we're in the process of transitioning that as well. So, our overall accessibility strategy comes multi fold. My team is responsible for the information technology, and that's across the board. That means we support students' technology use in the classroom, we support faculty's technology use, we provide general technology use for administration. We do not have responsibility for accessibility accommodations per se, we have a disability services team on campus, it's organized in our student affairs area. So, really, it's a key partnership working between student affairs, working with my central I.T. organization. I will say from a maturity perspective, though, we had staff, it was very much more about boutique service, solving discrete individual accommodations, and it hadn't crossed the line of being generalizable to most of our day-to-day normal use of population technology. It was very much targeted at a subset population that had self-disclosed a need for an accommodation. JAMES: And I know as part of this conversation, we'll get into a bit later, a discussion of these issues of silos and coordination and collaboration, which we had a lot of conversation about when we were working with you. So, maybe we can jump in now a little bit into this sort of notion of accelerated accessibility that happened for U Mass for sure but probably for most universities around the world because of the pandemic and what that looks like. And how -- maybe start with a little bit about how does the university deploy technology assets that are accessible and really are working for everyone, and what did it look like to have this sort of intensified effort to include a focus on accessibility as you were becoming more and more -- using technology more and more to do all of your services, both administrative and academic and teaching? CHRIS: Sure. So I'll say the structural change that really occurred was, I think, originally we treated accessibility as meeting the needs of identified individuals who had to have accommodations and making sure our web content was accessible, doing basic accessibility reviews, it was basic, W3CG, not a lot of detailed work and it was not invested across the board in terms of we had a lot of natively accessible tool set but it was really natively delivered accessible tool set, there wasn't a lot of work and push for us to drive an institutional priority around making sure our content was natively accessible, except where there was either liability or like I say, a dedicated accommodation. As we went into the pandemic, that really had to pivot because we realized, we no longer had the mechanism, we couldn't deploy a notetaker for a student in a classroom because there wasn't a classroom. We couldn't make point by point accommodations on either technology or use case basis. So, we had to start generalizing. We were fortunate that we were in the midst of a transition of our strategic plan, so we were actually at a point of making that type of pivoting. Of identify digital inclusion as a core property going forward. And, so, we had a lot of the substrate work, but I'd say the pandemic really drove us to recognize it wasn't solely about a compliance obligation but much more about reaching our community where they're at. JAMES And as you were making that shift, were you -- some of what we had talked about in the past, when you were in the middle of all this, is there some -- much like what you would probably do on the security side of your work, any sort of risk rating system, and trying to make these decisions about where are we going to prioritize and focus first and those types of decisions when it comes to accessibility? CHRIS: Absolutely, yeah. So, one of the things, for me, I consider fortunate is prior to my role as a CIO I've been in a number of roles at U Mass. I came from a very technical background. But I spent many years in a security role. So, I was responsible for information security at the organization. Within the information security field, it's very much a derivative of risk management field that works very heavily on risk and concepts like maturity models play very heavily there. So, when you're assessing implementation of controls to mediate security risk, you have to assess what is the cost of control, what is the value, what is the return. The easiest way to assess that is against a maturity model so I had a lot of familiarity with the concept of maturity models. One of the things that made me very excited about the engagement of G3ict was the application of this discipline-type technology of applying a maturity model to a domain like accessibility because I had not seen that done before, but I had a lot of experience.   What's nice about that, it gives you an abstract way of measuring your progress, although there can be a metric and a rating, it also talks about where you are legitimately relative to your peers but what steps you can take, and gives you a better mechanism to start prioritizing resource allocations. So, as I moved out of information security, into a CIO role, I changed from being responsible for compliance to be responsible for budget, priority and allocation. So being able to have a document like a maturity model that can help guide investment and show return relative to cost was a better framework for us to make ongoing decision making and I felt more at home in that security field, like oh, we know this is a high risk, let's apply a resource here, even if the resource is fairly modest, it's going to get us significant return against that issue. JAMES: Can you -- if you're able, can you talk a little bit about some of those areas where you were making decisions at the time in this accelerated period of focus on accessibility in addition to a lot of other things? Where you are identifying risk and taking some steps specifically around improving the accessibility of your technology assets? CHRIS: Sure. And in some cases, what's interesting with the technology assets is our first task, because we are technologists, is let's just fix the technology.  What it really came down to in many cases it's about the business process as well. So, when we started going through the assessment process, we realized the first and foremost, we have a 24,000 student population moving remote. We had to get in front of the faculty and instructors to explain why this was relevant. So, it wasn't so much about, hey, don't put a poorly scanned PDF up on your website, we'd already been providing those types of instructions, but it really had to pivot to, is your course content accessible natively. And in that case, it is still digital accessibility, but it may be, have you applied alt tags to your PowerPoints, have you made sure you're not doing poorly rendered PDFs, is your content screen reader able. It was these sorts of things that are actually technology related but it was about the business process behind it. What we did, we formed a working group between my team, our university library, our center for teaching and learning, and our instructional designers, we call our ideas group, it's a big long acronym I can never remember, but we put those together as ideas is the support resource, faculty primary interact with. Library is a resource that provides a lot of the supplementary external materials, I.T. is a lot of times the bridging infrastructure. So, it was really about forming a coalition within campus, identifying priorities, it was helped inform by the maturity model where those risk areas are, and providing guidance, which wasn't just apply technology, but help individuals creating content to make the content accessible natively, because the incremental cost to them was much smaller than us throwing lots of money at making the technology do it for them. JAMES: You touched on a really important point that I think would resonate with any university around the world, which is the sort of decentralized structure of universities, we'll dig into that more deeply in a minute. But I'm just wondering, as you were partnering, and leading this accelerated digital transformation during the pandemic and focus on accessibility as part of that, how was that received? I recall in part of our conversations, for example, there was, with the faculty, there may have been some incentives around going digital, maybe even going digital and accessible at the same time. But, in general, how would you say this accelerated accessibility was received? CHRIS: So I would say it was received well. I was actually somewhat surprised at how well it was received. Those of you who have been at universities, especially in large universities, they're very decentralized power structures, recognize that change comes slowly. The ship turns slowly, as we like to say, right? It will get there eventually but it turns slowly. I was tremendously impressed with the empathy and the caring shown by the faculty and the instructors involved in supporting students at a distance, but they recognized an individual obligation. And, really, our role as technologists was to reduce that barrier to them to make their content accessible. So, there was some financial structure incentives, as we went into our subsequent semester that helped faculty teaching online to build hybrid instruction. What we did, we developed a series of standards to make sure as our content went out, it met these standards, that was sort of the condition of the incentivising. So rather than make it a big deal, like hey, you all have to do accessibly, it was really embedded into an existing incentivization structure, but we added the accessibility obligations as additional compliance checks to go to an accessible by default role. I was concerned about the uptake we'd see from faculty, you but I was very surprised. The other thing with decentralized higher education, as much as the ship turns slowly, once everybody gets where you're going, they generally get on board. So, we took this more adapt to the culture of the campus, adapt to the change culture of the campus, and tie into those change mechanisms that are effective, that's what really helped us be more successful, I believe, that and the empathy of the faculty and the instructors. SPEAKER: The International Association of Accessibility Professionals membership consists of individuals and organizations representing various industries including the private sector, government, non-profits, and educational institutions. Membership benefits include products and services that support global systemic change around digital and the built environment. United in Accessibility, join I.A.A.P. and become a part of the global accessibility movement. JAMES: So, maybe take a little bit of a step back, but still thinking about the deployment of accessible, inclusive technology assets. Can you talk a little bit about your thinking, U-Mass' thinking and approach to incident management? How do you remediate issues, how does that happen? And then the other piece that I'd love to hear a little bit more is about testing, when it comes to accessibility, automated user testing? CHRIS: Sure.  So, two-fold. On the testing piece, we've employed students both in our help desk and our accessibility office to do some of the testing. We actually are just launching another program to do more broad usability testing, which includes accessibility testing, working in concert with some faculty in our writing program. They tend to have a good degree of expertise in there. So, the other advantage of a higher education institution is students are fresh, motivated, focused and quite inexpensive labor and they like the work. It's great experience, it's great value to them, it's great value to us institutionally. So, we've really tied into that, this is something we've done for many, many years, tie into a workforce that's motivated, it's interesting. We've definitely seen the awareness of our student body around accessibility issues is much greater in the last five and ten years than it has been previously. I've been asked about making sure content is accessible from a course perspective, I've been -- there's been a shift and the challenge is, that shift isn't necessarily as strongly perceived at the faculty that are instructing them because they tend to be a little bit older. So, using the students to help motivate that work has really helped improve the accessibility piece of it because we've embedded the testing more into the core processes when we role out new applications, whether it's a PeopleSoft application or a new web application, we're commissioning that testing as part of launches of applications, as well as new web properties. JAMES: Chris, Mark Nichols is asking a question. If the standards that you're talking about, before content goes out, or even other standards that you're looking at and testing on really to -- related to accessibility, are they in-house standards or are you using global standards like WCAG? CHRIS: They are in-house standards developed off WCAG. But I will get James and Yulia a link afterwards. We posted up our academic standards and it referred to those suggestions, it was built off of WCAG. One thing, just amongst everybody here, accessibility is not my first language. I'm an info set guy, I was a technologist, I was a Linux assist Admin. I know the acronyms, I know the space, but it's not quite my domain of expertise, I'm fortunate to have well-trained staff who understand this both on my team and the disability services team so we can absolutely share those standards. They're academic standards we posted for the fall semester for 2020. JAMES: So, Chris, I know, as I recall from our previous conversations and work, there were sort of nine legacy platforms that you guys had deployed. And I'm wondering if over the course of the many months since we've worked together, how you're thinking about incident management has changed or evolved or how you're approaching that and dealing with that, how much of an issue -- accessibility issues have become in this accelerated period? CHRIS: I mean, the challenge has been, before -- I believe we started talking about the accessibility review before the pandemic. I had high hopes that we would be able to make significant progress in some of our core administrative systems in the shorter term. And then the pandemic hit and next thing I knew, we were running COVID testing sites for the western part of the state. We were running vaccination programs. We were one of the earliest vaccination programs for first responders. So, unfortunately, a lot of the resources I'd have to help make accessibility improvements to our core applications really got put aside for new application deployment. What I will say, we've been strong about implementing accessibility standards for the new applications as we roll them out. So, at this point my hope is to get us back, likely as we refactor some of our applications to do a more detailed review. It's definitely a goal, it's an asserted goal, it's part of the road map and strategy going forward. It's just with the pandemic, the resource allocation tipped everything so sideways. I'm a little further behind than I hoped to be there. Legacy platforms, we haven't made as much progress as I was hoping to. We've certainly made progress. What we've made significant progress in is in the awareness and the accountability that accessibility is an issue that has to be accommodated at deployment or at refresh for an application. That was a huge improvement that we hadn't been able to make as successfully in the past. JAMES: You've shared, at least with me, what I think are some really interesting facts about how you as a CIO had to evolve into using technology to support a dramatically increased public health role of the university for the state during the pandemic, which is pretty amazing. There's another question from Peter, who decides the threshold for compliance? It's never 100%. CHRIS: And, so, again, this is where I'm going to go a little bit on my information security soap box, right? The definition of compliance is just bending the wheel to another. So, yeah, it's never 100%. It's not going to be 100%. Really what we do is use a risk-based model, understanding where the risk is. Usually that started historically, with either liability of the institution or legal accommodation requirements. That's a barrier to cross, that's a legal obligation to cross, but it's really not meeting this notion of digital inclusion as a core value of the campus. So, the threshold is really handled generally on a case-by-case basis. There isn't an arbitrary threshold. What we focus on, these are the recommendations to make your course content accessible, to make your web property accessible. These are the standards. From a web property perspective, we do actually have a compliance check less, we actually have a team inside our university relations group that will run through both automated testing and some hand-based testing to look at, does the content render in a screen reader, does it provide appropriate alt image tags and things like that. My goal with compliance is always making sure that we're investing the right amount of resource to ensure that we meet the largest degree of population as effectively as we can. Information security is a risk management game. Accessibility and compliance become a risk management game. And it's hard sometimes to think of it in those terms, but one of the challenges, I think, that I've seen working with some of my staff is, staff come with a tremendous degree of accessibility concern are passionate, profound and focused. The challenge is also balancing those resources against the other resource needs of campus, right? How much time can I spend on ensuring my web properties are accessible if, at the same time, I have to take those same resources to allocate them to make sure we're setting up a COVID vaccination clinic. It's really a continuum of resource allocations. For me, thinking about how can I make sure there's always a guarantee of resource allocation towards accessibility, recognizing that that might not be core to our mission. What can be core to our mission is deploying accessible applications on an going forward basis. But our core mission is instructing students, performing research, being a land grant institution. We always have to balance that resource allocation to make sure we're moving the ball forward in these different fronts, but serving, first and foremost, what is it we're core here to do, instruct students. Accessibility is a component of that, but it can't be the dominating component. It has to be an absolutely key component, but the dominating is us delivering students with a path to their future. JAMES: Thanks, Chris. Before we go on to the next topic, briefly, if you can talk about thinking about your staff, the technology staff at the university even more broadly, perhaps, the skill and training on accessibility and how you think about that and approach that. CHRIS: Yeah, I think there's three aspects of that. So, the first aspect was, we've had some staff transition, in our accessibility staff. Making sure we have the appropriate professional training for folks who are doing the accommodation work or engagement and consultation work. That's always been a fairly straightforward, that's an institutional investment. That makes good sense. Where the real value we've seen, both from a leadership perspective, raising accessibility as a topic of concern at senior levels at the institution. So, raising this concept, our provost is fluid with the concept of accessibility, right? He's not going to go out and do a WCAG review, but he gets the concept that he can instruct his Deans that this is going to have to be a key component of the content their faculty deliver on a go forward basis. From a training perspective, there's a lot of low-cost effort that we can put in place to raise accessibility on the radar from a leadership perspective, discuss it with a broad team of not just executive but operational, manager and cross-functional teams, we've also been very successful in engaging our students about accessibility conversations, what does that mean to you. Because my concept of accessibility is how big is the font is, a student's concept of accessibility may be how does it render on a cell phone. That's a very different problem set, depending on what technology you apply to that. It doesn't have to be, but we need to collect those voices in terms of understanding what that means and a lot of that does not involve a lot of out-of-pocket cost. JAMES: And just one more question, then we'll move on to one of my favorite topics, which is sort of collaboration across departments. From Kathy, how do you decide what to test? Do you do spot checks of certain course websites and more checking of applications used by larger populations? CHRIS: Sure. So let me break up the administrative from the academic side of things. So, from the administrative side of things, we actually have a review process for our web properties in conjunction between our I.T. team and our university relations team that's responsible for our web properties. So, there's actually a checkoff evaluative process for our core web properties. I'm fully confident there's probably some research lab websites or some individual P.I. websites that were created by word press that probably don't meet the testing. We focus on the high-visibility targets to make sure the information that's most relevant to a large population gets out there. From a course perspective, we do have a couple of very large enrollment courses. We tend to focus most of our resources on ensuring the platform is accessible natively. There is always compliance issues, right? There's always some faculty member that wants to take their PDF from 1982, turned it 10 degrees and scan it and hope it will work. We do spot checks, especially on the large enrollment course, but generally we focus on ensuring the platforms are natively compliant, and then providing strong guidance to the faculty to ensure they have the guidance and parameters of what are those steps that they can take that's relatively die minimums, relatively incremental burden for them but provides a more inclusive experience natively. JAMES: Thanks so much. Now let's shift gears a little bit, Chris, and get into the issues of collaboration, coordination, working across departments at a big university on a big campus. One of the things -- one of the other things that stuck in my mind that you said early on when we started working together was how at the University of Massachusetts Amherst, there are some really amazing, I give you full credit for this term, these pockets of heroic effort. Which I think will resonate with anyone who's doing work in the accessibility field, any kind of organization, that there are really good practices happening in parts of the university. And I think some of the ones that had come up, U Mass were around UDL, instructional design, and some other areas that the Assistive Technology Center, some really good resources and practices. But siloed and not scaled because they are siloed in departments. And even some departments, I think, that may have been a little ahead of others in terms of academic departments in terms of their approach to inclusion and accessibility. I know that since we last worked together, and during this -- these last several months, the accelerated accessibility period, that you've done some work on greater collaboration and coordination. Can you talk a little bit about that, including maybe some description of what it felt like before taking some improving steps? CHRIS: Sure. I mean, for those of you who have spent time, and this is true of both large and small higher education, but higher education tends to be a very siloing structure, at least in my experience. There's a couple of exceptions but there tends to be a lot of belief that faculty are experts in their domain, by virtue of experts in their domain, that there's a lot of notions of self-rule, self governance and that sometimes extends out to administration. I will avoid pining too deeply on that. But there are some challenges that come from that. There's communication, there's logistical challenges. What you end up seeing is subcultural development about, this is important. And what I've observed, and I've seen this both in technology fields as well as accessibility is and let me take it out of the accessibility domain, my email team for many years thought they delivered the best email application out there. They understood how it worked, nobody else understood how it worked but it made a lot of sense to them, and they thought they were doing great. And, so, within their minds, they were providing heroic effort but the impact from a user perspective was not the heroic effort they thought it was going to be. I've observed similar challenges within accessibility at the campus as well. There are these pockets of brilliance, pockets of heroes that are out there working with good empathy this. The challenge is, they don't always have, or they have not been provided the degree of leadership to have these conversations more broadly. So, why is it that one of the very small questions that came up had to do with a resource allocation around providing captioning for course materials for students that had defined accessibilities -- defined accommodations and it became this substantial issue that the costs were decentralized out to each of the departments? And many of our departments, by virtue of being academic, tend to run on very thin budgets. So, when we stopped this conversation, we went into the pandemic, said, what is the net budget impact can here? I can't remember what the number was. Let's say it was $40,000 across the campus. You know, when I brought it up to the right degrees of leadership, they're, like, we're arguing over this? $1.3 billion budget. Don't get me wrong, $40,000 is real money but that's not the thing we should be arguing. By virtue of us decentralizing decision making to that being 40 decisions of $1,000 each, it became much more difficult to get the resource allocation. So the key observation I'd say is, clearly articulating why this is important, clearly articulating that when we marshal our resources collectively, we can make changes that don't seem so big when you're working in a larger context and it really involves that collaboration between and amongst groups and I've actually been very pleased, I think, going through the review with G3ict, certainly delivered us a road map, it certainly delivered us a maturity model, it gave us a sense of where we sat, but it actually opened up conversations amongst teams that have worked and sat together for many, many years but those conversations weren't as effective. You know, we always joke, my background, like I said, is information security with auditors. If the audit doesn't tell you what you want to know, you did something wrong, right? I will say, I have been very pleased with James, had a very objective, and the team he brought in was excellent, but it told us what we wanted to hear, you've got some pockets of brilliance but there's some coordination, there's some logistics, alignment you need to do. Having a third party assert that brought more credibility to this notion of accessibility than any empathetic call from staff on campus could have. JAMES: Thank you for that, Chris. And I think to your credits, and we've done a good number of these reviews of universities and of smart cities as well, I think one of the things that you did was pretty courageous, I think, you involved an enormous number of people from both the academic side of the university and the administrative side in a large number of conversations. I think over these ten conversations that our expert team had with your university community, there were 200 participants, 40 unique individuals, I think, but they were heavily attended, some of the discussions were quite passionate, I will say, because the passion was there. Can you talk a little bit about where -- recognizing and wanting to make even more progress on collaboration and breaking down some of these silos and amplifying some of these heroic efforts. Either where some of these -- what are some of these pockets that you would love to see replicated and I'd also be curious to hear a little bit about what are some of the groups that can help promote this kind of collaboration? We had talked, in particular, in our conversations with U Mass, the faculty Senate actually had been pretty engaged on these issues of accessibility. There is an academic advisory committee, I think, on accessibility. Are there any sort of areas that or groups that can help you as the CIO promote this collaboration? CHRIS: Yeah, you know, that's a great question, James. One of the key things, and one of the things that I found sort of helpful to me in my career, both in the CIO role I'm in, and previously in the information security role, is identifying those governance structures and where they have efficacy. That's one of the things that I've observed at least in some of the accessibility staff I've worked with. They have passion, they have technical focus, they have deep empathy and deep caring, but they don't have the experience with how universities govern themselves or what the governance structures are, where decision authority really rests. It's great to think, you know, I've had staff that think I have all sorts of decision authority, I have responsibility for my $30 odd million of budget, but sort of the extent of the responsibility I have, I have responsibility for standards, as we get into decision making, I have to tie into bodies like our faculty Senate, I have the information technology advisory council, some of these academic advisory councils. We have other both faculty and administration, leadership groups, task forces that are focused on the shared governance structure of universities, we have administrative focus units. So working with accessibility teams to identify where those power structures exist, how change occurs in an institution, and how you can be effective at making this case amongst all the other many cases, that was one of the key things, which again, I was fortunate to have a lot of this experience in information security, I observed many of my peers in information security, other institutions, come in and try to win the day of information security solely on technical merit. Like, well, we're going to go to this, we're going to spend another $100,000 on this new antivirus thing, because it's incrementally better than this other thing. And quite honestly, when you're making that case to a CFO or to a Chancellor or Provost, that's $100,000 for a technical thing I don't understand. Whereas, if you can turn it into a conversation about, either mediating institutional risk, delivering institutional benefit, understanding how change actually occurs on a campus, when you make that case in business terms, it becomes more rational and plausible amongst the thousand other things the Provost or the Chancellor or the CFO has been asked in the last day. So that's the key transition for me, how do you find those power structures, how do you identify those governance structures, how do you make it a business value proposition, not solely a technical or empathetic proposition. JAMES: That's actually a perfect segue, Chris, into a topic that I know you feel passionately about and that we recognize as well in our assessment tool, the maturity model is really pretty critical to an increasing commitment and capability on accessibility, inclusion. And that is what we call, you know, the business case for accessibility. Moving beyond, particularly here in the United States, every university has a legal requirement to be accessible and inclusive, in other countries as well, but you and I are sitting or standing here in the U.S. today. But we'd like to sort of move the conversation beyond risk avoidance and legal compliance to what is the business case? As you say, the why or the value proposition, of accessibility. Based on your experience, either over the past year as a result of or as part of this assessment, or just in general, can you talk a little bit more about that, that key issue of how you are trying to tap into the why and the value proposition at U Mass? CHRIS: Absolutely. So, one of the key value conversations we have on a regular basis, and this is not a conversation unique to U Mass, it's not a conversation even unique to the northeastern United States, but within the United States, there is a significant decline coming in college-age students in the coming years based off of just changes in birth rates, patterns like that. What you're seeing is increasing competition within the field for high-qualified students, you've seen this manifest through, U Mass was deeply involved in the closure of mount IDO, we actually took over parts of the campus, we inherited some of the students from there, you know, recently, I know Becker college in Worcester announced that it is intending to close as well. One of the key things that drives university budgets is attracting, retaining strong students to maintain competitiveness. And if the population is shrinking, one way from a business value perspective is to make sure that you're delivering a natively accessible education to appeal to as broad a population of students as possible. If we are, by virtue of not providing accessible content, unintentionally excluding some arbitrary percentage, say, even 5% or 10% of our students. That's 10% of a student population that will not become paying students, high-quality students. We're excluding a portion of our population that could engage. And that's based on a conjecture of 10%. If the conjecture is much higher, we could be unintentionally avoiding potential population when we know there's going to be restrictions in that. So from a very raw perspective, if budgets are driven at institutions through a combination of both undergraduate, graduate tuition, and research education, if we're not strongly positioned, meeting the market demand, and that can either be meeting market demand because there's a growth or being more competitive and approachable to a larger population, if there's a reduction in that student -- potential student population. We are not tied into the strategic mission of the institution to provide our role as a land grant, to provide instruction to residents of the commonwealth and to create a workforce for the commonwealth. We have over 250,000 living alumni from U Mass, vast majority of them stay in Massachusetts. At U Mass, we graduate more students than the top eight private institutions from the state of Massachusetts combined. That means we're tied deeply to the workforce. So, if we cannot find a way to make our content accessible and approach that, we're not only risking our own potential economic future, but we're actually risking issues of workforce development and long-term competitiveness of the state potentially. JAMES: Yeah. A couple thing in there that I would love to follow up on. One is, you've talked about the role of students, the diversity of students as a driver for the competitiveness of U Mass in fulfilling your many roles as a land grant state university. As you're thinking about the why and the value proposition, are you having discussions or thinking about, we certainly discussed this as part of our engagement, the technology assets you're deploying, the accessibility of them, it also impacts faculty and staff, is that part of the calculus as well? CHRIS: It absolutely is. Because, again, that same, you know, rubric holds, as we remain a competitive institution, we have to be competitive in our hiring practices. And that means approaching as broad a population of the available talent pool out there. If we are not delivering natively accessible experiences, whether that is directly instructional or it's, you know, pedantic as H.R. forms, right, everybody's got to do an H.R. form somewhere, but if we're delivering, and we've had our challenges in the institution of three copy, carbon forms that, you know, our vice Chancellor of human resources loves to say, he shut off the last -- he got rid of the last typewriter not that many years ago, right? There's clearly some substantial issues that we've had. If we're not competitive with the potential workforce, both at the highly skilled faculty level, at the highly skilled technical level, but at all levels of the organization, we're going to potentially compromise the available resource pool as well. So, again, if it comes back to business case, I see a compelling business case to make sure accessibility is core to our digital transformation because it allows our long-term access to a larger candidate pool. With the move to remote work, we're having very serious conversations, what does that mean, long term, right? We've had staff working remotely, we're going to struggle, like every other public and private institution is now, what does it mean for workforces returning, if the pandemic slows as we're hoping? Would we accept this notion of more broad remote work? Does that increase our potential labor pool? Those are all interesting questions that are going to have to be worked out. But if we cannot position our institution to be natively digitally inclusive, we're excluding a portion of our population that may have accessibility accommodations that we're just turning our back to from the get-go. And that's a challenge. That's a loss both to us and it's a loss of potentially high talented, high-skill individuals that could make this university stronger. JAMES: So, Chris, I would imagine that with your expertise and experience in the information security space, you've sort of tackled this issue of the value proposition, the why of security. How is the starting conversations, advancing conversations about the business case, the why and the value proposition, of accessibility, how is that being received? Where is it being received well, where is it a bit more of a struggle? CHRIS: I'd say it's being received well at the high level when I talk about this notion of making sure we're finding the most accessible pool, we're making -- ensuring we're going to remain competitive, tying to workforce. I think the value proposition, executive level, is very strong there. We've always been very successful at the value proposition at a very operational level, for our students and our staff that are providing accessibility accommodations, who are working with students on a one-to-one basis, for our help desk who are taking calls. Where the challenge is, and I think we've had a path to move forward, is for people who do not have either the high-level strategy, do not have the day-to-day blocking and tackling is trying to make the value proposition of why is this one more thing they should do, why should you take ten more minutes to ensure accessibility, alt image tags, why should you take two more minutes to turn on the captioning features in Zoom or PowerPoint? So, I ended up teaching again this fall, I taught for many years at U Mass, I took a number of years off. When I taught this fall, I taught entirely remotely, I taught entirely by Zoom. Zoom's native captioning feature wasn't there. So, I elected to use PowerPoint, use Office 365, turn on the captioning when I lectured. I use Zoom to record the lecture. And it put the captions into it. It's not perfect. It wasn't great.  But the cost to me was thinking to do it, clicking a check box on Office 365 on PowerPoint and making sure I hit play and record. So, the incremental burden to me of applying captioning to course content, and I've taught this course material for 20 years, this is the first year I did that. So, there is two minutes of clicking, it took me about ten minutes going through each of my slide decks to apply alt image tags. That investment of my time as an instructor is absolutely worth it to make sure that content is more accessible. And that's the value proposition I think we have to hit that middle portion of the population, if we can move that population, the impact is going to be tremendous. SPEAKER: With the adoption of WCAG 2.1 in many countries, there is an increased demand for web developers, designers and other professionals with knowledge of web accessibility standards and guidelines. With this growth comes the need for an objectively verified level of expertise. The Web Accessibility Specialist exam will provide individuals and employers with the ability to assess web accessibility competence. Complete the WAS and CPACC exam to earn the special designation of Certified Professional in Web Accessibility! 

James Kwon is Founder and CEO of Figmints Digital Creative Marketing, a 20-person, full-service, multi-seven-figure digital marketing agency that specializes in accelerating leads to sales. The company utilizes SalesAmp, which James describes as “business development representative as a service.” SalesAmp came under the Figmint's “umbrella” when James and April Williams, now Fitmints President, merged their two companies. (The way these two companies “came together” is described in a short video on Fitmints' website's About page.) Eight years ago, when James discovered that his first chosen career in culinary arts did not provide him with sufficient creative opportunities, he started Figmints with a focus on providing UI/UX (User Interface and User Experience) web services, which he did for number of well-known companies back when few people were doing it. In this interview, James discusses the sales process gap the often occurs because “sales and marketing typically don't like each other” – the marketing department wants the sales team to take leads earlier, while the sales team wants marketing to push leads further along before the “hand off.” In 2018, James was looking for a partner to better fulfill his vision for where he wanted his company to go. The synergy between Figmints HubSpot operations and North Star Marketing's SalesAmp, a marketing process focused on building pipelines for individual salespeople, created a marketing powerhouse that far exceeded the expectations of the two merged companys' leaders. Today, the now-expanded Figmints develops the right content for the exact right audience. As individuals respond (download information, attend webinars, engage with content, open email), the SalesAmp piece takes over with Figments' internal sales team reaching out to prospects on behalf of clients. Over time, Figmints delivers a thought leadership, content marketing, and funnel program that nurtures customers through the client-journey until they are comfortable enough to talk with the client's sales team.  Unlike most agencies where generated leads are handed off for follow-up to client sales/ boiler rooms (which may or may not get the message right), Figmints operates as an “educational ambassador,” running the inbound HubSpot process on behalf of its clients' salespeople. Most of the Figmints' clients have long, complex sales cycles. When the questions get too complicated, the client takes over. In his HubSpot Inbound 2020 presentation, “My Cheat Sheet: How to Growth Hack Five New Companies or Offerings This Year” at HubSpot Inbound 2020, James promoted the idea that entrepreneurs should consider starting multiple companies at a time. He lists a number of reasons that this practice makes sense and lays claim to launching close to nine sub-brands, of which four or five are still active. James is a big proponent of systems, optimization, and efficiency for everything from workflows to automated engagement to follow-up processes. He says he uses “several dozen pieces of software that combine together to make my workflow easier.” But, he admits, people are complicated. Early on, the agency experienced high employee turnover. “There is no way to love people efficiently,” he says. Today, employees stick around a lot longer because the agency invests in employee growth and meeting with them for frequent one-on-ones. He highly recommends utilizing Entrepreneurial Operating Systems (EOS), as described in Gino Wickman's book Traction. James is available on his agency's website at: Figmints.com, by email at: james@figmints.com, on Twitter at Twitter.com/figmints, and Facebook.  ROB: Welcome to the Marketing Agency Leadership Podcast. I'm your host, Rob Kischuk, and I am joined today by James Kwon, Founder and CEO of Figmints Digital Creative Marketing based in Providence, Rhode Island. Welcome to the podcast, James. JAMES: Thanks so much for having me, Rob. ROB: Excellent to have you here. Why don't you start off by telling us about Figmints and what is the superpower of Figmints? Where do you excel? JAMES: I like that. Figmints is a 20-person, full service digital marketing firm. Started here about 8 years ago. My personal background – I guess I'll tell you a little bit of the story. I started in UI/UX and design. Actually, I have a degree in culinary, so that was where my creativity journey started. Got to find out that I couldn't be as creative in the kitchen as I'd like to be, and I wasn't that good at it, so I left to do design work. I could be more creative in front of a computer, so I started to do design and became what I call one of the first UI/UX designers because that category really didn't exist when I started. I was Employee #5 at CVS.com, helped them launch that award-winning site at the time. Worked at BEAM Interactive, got to work on some really high profile, awesome sites like Mini Cooper, Virgin Mobile, Deutsche Bank, the list goes on and on. Name drop, name drop. I started the agency because I really enjoyed working with small to medium size firms. Fell in love with marketing somewhere along the lines. I fell in love with business, fell in love with marketing, just this infinite pool. Today, we're really focused on accelerating leads to sales through a program we call SalesAmp. It's like a BDR as a service. What I've learned through the years – I don't like the term serial entrepreneur, but I guess it describes me because we have probably four or five different sub-brands that I've launched. Over the years, actually, it's like nine. But today we're still working on four or five of them. I've had a blast getting to trial things very quickly, test things very quickly, trying to measure the growth very quickly. And we do that for clients as well as ourselves. ROB: Right on. BDR, business development representative – a lot of times this is somebody who's banging the phones, banging emails, possibly even sourcing or scraping leads or has some process feeding into that. How does that thread go from a background in UX and UI to sales assistance? JAMES: Great question. What I love about design is coming up with creative solutions, and when I started the business 8 years ago, I realized that you get to really be infinitely creative in business itself. There are major levels you can pull within business operations, HR, people, but especially, of course, in sales and marketing that was the area that was closest to the world we were already living in, doing websites and branding and brand story. We merged about 2-½ years ago now with another agency. The CEO there is now our president, April Williams. She had developed a system that she called SalesAmp, and we really added a digital layer as they've folded into our agency. That process, we think, is really transformational. We have a lot of great clients. Philips Healthcare is a client of ours. That's probably our biggest. GE ABB is a client of ours. Lots of medium size clients as well. But the whole idea is sales and marketing typically don't like each other. Well, in a lot of businesses, they typically are frustrated at each other because marketing wants sales to take leads earlier, sales wants marketing to push leads further. There's this gap that happens in the middle, and we thought this was a tremendous need. So we actually developed a process to not only develop the thought leadership, the content marketing, the funnel, but also have an inside sales team that reaches out on behalf of the client to hand-hold that prospect all the way through till they feel comfortable having a conversation with the sales team. These larger organizations have felt tremendous benefit from having this service from us because it reduces that frustration. Salespeople are busy; they flat-out just don't want to do it. [laughs] So yeah, we've had a lot of fun putting this together. ROB: That's really interesting, and that makes your journey make sense. If we were doing conferences this year in 2020, you and I might have been speaking face to face at HubSpot's Inbound conference, where you were speaking. We've recorded there the past couple of years, and quite often we've talked to BDR/SDR as a service companies, but they're usually coming more from the perspective of building lists and then banging out calls for those lists. Do I understand that you're actually generating warmer leads and then also pulling those leads through to some point where you hand them off in the sales process? JAMES: Yeah. Not to give away too much of the special sauce, but for the value of this podcast, for the value of your listeners, I'll share with you what we've found to be more impactful is actually running the good old-fashioned HubSpot inbound process specifically for salespeople. We run that process on their behalf – because you're right, a lot of these outbound sales/boiler room type of “I'm going to call 1,000 people a day,” those tend to fail because they don't get the story right. The game is just numbers, “I'm going to call as many people as possible.” But the inbound process is all about connecting the right content, having as much helpful content as possible to that exact right audience. What we're doing is combining both of those worlds. We want to develop that content, do it on behalf of the sales team, and then as people engage, we're reaching out to those individuals. As people download, as people attend the webinars, as people start to engage with that content or even open an email, those are the people we reach out to. And then on the calls, we're actually leading them into more content, bringing them further through that journey. That I think is pretty different than a lot of companies out there that are just a roomful of salespeople reaching out. ROB: That definitely makes sense. Where do you get to the point where you hand that lead off? Are you sometimes able to bring them all the way through to closing sale, or is there typically a point where you're handing them off to an account executive, an AE or something like that? JAMES: Yeah, we're working on a program where we can bring the deal all the way to close. Of course, there's a lot of complexities. Most of the clients we work with have long sales cycles. They're very complex deals. You have to have some industry knowledge to be valuable there, to actually make the close or get people to sign on the dotted line. But what we do is become educational ambassadors. We know enough about the business to be able to guide that individual, and once it becomes complicated or once the questions become a little too complex for us, we'll immediately tee it up for that salesperson at the company. ROB: Got it. I want to pull on one thread you mentioned earlier. You mentioned a point of merging with another agency. Quite often, especially when you get to being more entrepreneurial, I think a combination of let's say ego and logistics and financial concerns can be an obstacle to getting together – JAMES: Just those little things. [laughs] Yeah. ROB: [laughs] Nobody has those problems. How did you come to this point where it just seemed to make sense to team up and pursue a whole that was more than some of its parts? JAMES: I'm going to throw a lot of that to April, who was the CEO of this previous agency and is now our president. There was a lot of humility from the start. We met each other actually at a faith-based Christian CEO roundtable group, and we've known each other for a few years. That story – we like to use the word supernatural. It feels like it was more about the things that were happening, and we were going along for the ride, really, and submitting a little bit to what we felt like was the best way to move forward. You can see that story, and I would highly recommend anybody to check out that full story, on our website, on our About page. I think there's a 4- or 5-minute video that explains the process there. But all the work that was done to start that humble process was really from April, and I was following along. ROB: We will look to get that video into the show notes. It's a great point that so often, some of these roundtables, some of these accountability type groups where you open up a little bit could be a place where you open up enough to figure out how you and someone else can work better together. Makes a ton of sense there. We mentioned Inbound, and at Inbound you gave a talk, and your talk was “My Cheat Sheet: How to Growth Hack Five New Companies or Offerings This Year.” Tell us about that talk and what some of the key takeaways and maybe even key questions were from that. JAMES: That talk came from our merger, I'd say was really the catalyst. It freed me up to dwell and live in – I think my gifting is ideating, looking towards the future, thinking about where we could create new products, new offerings. In the past, we really only ever had time to do half to one product or offering at a time, and we'd slowly test them. I realized that this probably means we're spending too much time trying to develop that offering before we launch it out. Obviously, as a speaker, I wanted the title to be as provocative as possible, so I made the argument that you shouldn't just start one offering or one new company; you should try to start five. It's kind of an arbitrary number. Three, five, ten – you should start as many as you can that warrants – that you think is a good idea. Go and test those MVPs (minimum viable products) out there. Very quickly into that segment, I talked about a few different reasons why you would want to do that. One, 80% of these ideas are going to fail, whether it's a new company or a new offering. So hey, if you start five, maybe one will succeed. It gives you this massive leap ahead. It gives you this opportunity to play in this blue ocean where your competitors may not be thinking smaller, running those MVPs, making sure that you're testing the biggest parts of the idea. It forces you not to spend too much time on it. And then of course, you get some thick skin. After failing many, many, many times, it becomes second nature, and you start to move forward much more quickly. ROB: This may tie together; you mentioned that your company had at one point up to nine offerings, and now there are five. Are there lessons and maybe an example of one of those that was an experiment and one that was put to rest? JAMES: Yeah, there's so many failures in there. [laughs] Happy to talk about it. Very early on, we built a platform for the wedding industry. Early on, when we introed video as a service, we were doing videos for weddings to make ends meet. We quickly knew that this needed to be not part of our brand, so we created a separate brand for that. The wedding industry is an entire universe. For any of your listeners who might be in the wedding industry, it is complex and unique and special, and there's a lot of people that you need to know and a lot of ways that you do business in it that are different than other industries – which I guess you could make the argument is true for every industry. But we quickly realized that we need a champion for this. We need a champion for any of these products that we create or sub-companies we create, and I couldn't be the best champion for it It did fail. We wound up twilighting the offering. There was actually a software component that was added onto it. But it was a lesson learned that the offering was a little too far away from what we do. Today, a lot of our products that we're testing are things that we can actually use ourselves or we can use for our own clients, which makes it a little bit more – the resources make sense to allocate for ourselves. ROB: How do you think about when it's too soon to put an idea to rest or maybe recognize after the fact that it was a little later than you should've turned it off? JAMES: I think it's always later. In hindsight, we should've stopped maybe at the beginning. [laughs] But I think you realize when you run out of money, certainly. I set some ground rules. “Hey, this can't take more than this much time” or “You can't spend more than this many dollars” or “We want to see this many customers come in and this type of feedback.” It's a good example of where everything was going the wrong direction. Our feedback was starting to get worse, it started to slip way behind in the priority, we couldn't devote as much time or dollars to it, and so we made the – I won't even call it a difficult decision. We made the very real decision that we needed to put an official stop to that project and move on. ROB: When you talk about feedback, some people are very numbers-driven and some people are very intuition-driven. Was that assessment of the feedback and the priority more of a gut feeling, or was that a measured consideration? JAMES: I'd love to sound smarter and say it was very measured. [laughs] At the time, that was one of our early ones, and it was a little bit more gut, which means we probably spent more money than we wanted to or needed to. But today we have much more strict measures of when things are going off the rails or when it feels like it's not getting the attention it deserves or we're getting feedback from our clients. I think you need both. You need to have some soft measures, asking people what they think, scale of 1 to 10. You start to create metrics around soft measures, which I'm a fan of. ROB: What's another offering that maybe is a little bit further along that was an experiment, but now looks a little bit more promising? And where did it come from? JAMES: At the end of my talk at Inbound, we created an offering that was born from this process. I give a little story about Tim Ferriss, which I'm sure you've heard of and maybe your listeners have heard of. Tim Ferriss is a prolific startup and entrepreneurial writer. He wrote The 4-Hour Workweek. There's a story about how he wrote the second book, The 4-Hour Body, and the way he arrived at the decision to write that book was really clever. Instead of surveying people or writing a chapter or anything like that, he designed a handful of book jackets and went to a bookstore – if you remember what bookstores were, they were these places people go to buy books. [laughs] This is probably illegal, so I don't recommend this necessarily. He took the books off the shelf and he swapped the jackets with his book jacket and he put it back on the shelf, and he stood back and actually tallied as people stopped, picked up the book, opened the book. He would give them scores – a point for stopping, 2 points for picking up the book, 10 points if you tried to buy the book. Then he arrived at the decision to write 4-Hour Body. And the subtitle of 4-Hour Body is “An uncommon guide to rapid fat loss, incredible sex, and becoming superhuman” – why would you not want to read that book, right? But that process, since we don't have bookstores anymore, or I don't recommend this same sort of process, we've developed a similar system using Facebook advertisements and other advertisements where we create what we call fake ads. They look like real ads, but they point you to a very generic landing page that captures information and lets you know that this is coming out later. This program, we like it a lot. We think many companies would benefit from it, and we've developed a separate offering just to do these validation tests. We call it BentoSpring. Bento like bite-size, spring like launch, so bite-size launch. The term “Bite-Size Launch” was taken, I think, so BentoSpring was our next best name. We're piloting that now. We're getting that off the ground. I think it's definitely still valid. But this is a great example of a product that we could use that we offer to our clients. It's relatively inexpensive, so when we offer it, we say, “Oh, we actually have an offering we call BentoSpring.” It could be its own separate company, but it doesn't need to be its own separate company. We have the offering out there, and if people want to engage with it, they can give us some money and do it. ROB: I can certainly see that sort of thing – from a distance, you can see the tea leaves. Even if you told somebody, “We have a scoring system like Tim Ferriss's. We give points for likes, we give points for comments, we give points for clicks, we give points for form fills” – the actual process of doing it could very easily be something that a client doesn't want to do. JAMES: Sure. They don't know how to do it. They don't know how to do it, they don't have an ad platform set up. Again, this is designed even if you wanted to start a brand new company and you have two or three in your ideation phase. “Gosh, these are all great companies,” or “These are all great things that I could be doing. Which one should we do?” Well, let's go test it. Let's go build out a bento test and test some ads out there. Let's see which ones are easier to set up, which ones can get the most impressions versus will see the most click-throughs. And then you have these prebuilt ads. Once you get that up and going, you can just re-run the ads and point them to real offerings. ROB: Exciting stuff there, James. JAMES: Thanks. ROB: We've talked a bit about your journey along the way. As you reflect on the 8 years since you took the leap and started the business, what are some things you've learned along the way that you might do differently if you were starting over? Maybe some broader lessons on running the show, more than maybe individual offerings. JAMES: One of the biggest lessons I've learned as an entrepreneur – and about myself, so this may not apply to everybody or all of your listeners – but for me, I'm a fan of optimization and efficiency. I love setting up systems. I think that's why I fell in love with marketing. I fell in love with HubSpot because we can create these systems, we can create workflows. You can automate a lot of that engagement and follow-up and process. I use sequences every day. I have probably several dozen pieces of software that combine together to make my workflow easier. But here's what I found out. There is no way to love people efficiently. You cannot do it. Loving people is designed to not be efficient, or relationships are designed to not be efficient. So early on, there was a lot of friction in the business because I would hire employees and they'd stay a year or two, and I'd get frustrated when people get that millennial itch. I had somebody say, “James, I've been here two years. I learned everything I could. I think I'm going to leave and travel the world.” And that guy did really well. But today, we've held our employees a lot longer. We're invested in our employees to see them grow, painstakingly taking time out of the day to set up one-on-ones with every individual, more one-on-ones with the people closest to me in the leadership circle. Those are the things that have been very painful lessons, but such powerful lessons growing the business to where we are now, about 20 employees, multi seven-figure. But that's something I think could be its own book of lessons, per se, for loving people, caring about people, just treasuring this opportunity that I have to make an impact on their lives. ROB: Really helpful. One-on-ones are such a key connector of that. You mentioned days. Are you doing those mostly weekly, or more often or less often? You said some people are a little lighter cadence if they're not as close to you in the organization? Maybe you do more of a touch base on occasion? JAMES: One-on-ones seem like such a simple answer. If I say it, some of your listeners might think, “Of course, I'm going to do one-on-ones.” But you wind up not doing it unless they're really regimented. I recommend highly that – first of all, we run on an operating system called EOS (Entrepreneurial Operating Systems), a book called Traction by Gino Wickman. Once you start to get into peer groups, you'll hear the EOS model over and over and over again. So I highly, highly recommend looking at EOS because it gives you a framework for meetings, a framework for how you do business, how you set it up, how to look at finances, how to look at hiring, core values, etc. It makes the argument that every business runs on an operating system – some on purpose and some not. The EOS model recommends doing one-on-ones at least every other week. I would say as the visionary or the leader of the company, with my integrator, who's April and my number two, she and I meet every week and we have a one-on-one cadence there. Then with the rest of the leadership team, I meet with them at least once a month. I do two or three one-on-ones a week, and the gaps are filled with the rest of the team. Other members of the team might have rotations with me once every 6 months, which I think is fine, but they're doing one-on-ones with their direct reports at least once every other week.  ROB: It's such a helpful tool. It's so good for empathy, for relationship, and coupled with process. When we do our one-on-ones, I have a cheat sheet. I take notes. I don't take the best notes on it, but even the simplest things of making sure you jot down the names of their family members and key milestones, those sorts of things – it's process, but it's process that, to your point, helps you love people well and maybe at a little bit better scale than just relying on your brain. JAMES: Totally. 15 minutes. Here's just a few of the questions we like to ask. One, we always start off with that personal touch: “Hey, how's your wife doing? How's your husband doing? How's your boyfriend/girlfriend? How are the things that we last talked about? I heard that you just bought a house. Congratulations. How's that going?” Then we dive quickly into “What's going well? What's not going well? What would you be doing differently if you were in my position? What information can I give you that you might be curious about in the company that you may not have regular visibility into?” This is a key one. I love when we both share, “What can I keep doing, start doing, and stop doing?” This is a really helpful framework. Keep doing is an opportunity to say “Hey, you're doing a great job. Love that you're doing X. Please keep doing that. I notice that you weren't doing Y. Can you start doing N? Also, I noticed this thing. Maybe you should stop doing that.” But the opportunity for the other person to say the same to me – what should I keep doing, start doing, stop doing? – opens it up. And honestly, if we'd had the opportunity to do that earlier on, I think we would've kept employees longer, they would've been happier, and I think we would've been able to see those frustrations or those pain points that there're bottling up internally and made decisions about those and tried to make some shifts around those sooner. It's pretty simple. I think employees just want to be heard. ROB: Absolutely. Much like killing a product offering, it's one of those things you will only realize that you started doing too late. We were talking a little bit before we started recording about taking your office virtual during COVID, so I'd imagine one-on-ones are an easy habit to keep going, but in terms of other habits and systems and things you had going in the name of the culture of the organization and connecting people, how has that changed and what are you doing differently now that you've embraced virtual? JAMES: What a great question. I wear this very proudly, so I'm going to take off the humble hat and say that I think we've been doing really well culturally as a remote agency. We've been practicing going remote once a month for the last 5 or 6 years just because we're very capable of it, and employees like going remote. We actually give all employees a day a week where they can go remote themselves. We were built to transition to remote fairly easily. We use Slack, and we have our virtual meeting rooms and things like that. But I'm very impressed by the way April and the team have risen to the challenge and stayed together culturally. We've always done a Monday morning huddle with the team, and that's continued, but we added a second meeting, a Wednesday morning check-in where we don't do any work talk. Or typically we don't do any work talk. We actually play a game together virtually. This has been really fun. We do online Pictionary, we've played Scattergories, Taboo, Bingo. We told scary stories. It's 30 minutes, 9:30 on Wednesday, and it's just a lot of fun. We make it the team's responsibility, so every team member, we rotate, they bring their game, and then they teach the game and we just play. That kind of culture has just kept us sane, I feel like, and it's kept this rhythm of “Oh, it's easy to keep this process going.” So that's been really helpful. And now, as the restrictions ease up a little bit, we're actually starting to do the opposite where we're trying to meet together more often and do things outside, have barbecues, bonfires, and have drinks together. We did a kayaking trip. Here in Rhode Island, we have the beautiful ocean. We're the Ocean State, so we have beautiful water activities we can do. So, keeping those things fresh has really helped our culture, and I feel like we've done a tremendous job at that. ROB: That's super solid. I think you are pulling towards what I'm seeing emerge also. “The new normal” is overused, but I think historically, many companies, including yours, and mine for that matter, have been default in the office. Not in the office is unique. We're probably moving more towards default remote and sometimes you're going to do something together. That's kind of what you're describing. There's a coworking space here that has an outdoor – they have like 50 picnic tables, and it feels nice to be near people without feeling uncomfortable being near people. I know that's kind of a weird, convoluted thing, but in our reality. I think you're really interestingly there. JAMES: Yeah, totally. There's just new things that we need to consider. Like since we're saving on office snacks, we just started to give our employees a stipend so that they can buy their own snacks or buy remote work setup that they can do. We're shifting some of the dollars that we did spend or we have been spending over to areas that make more sense. Those get-togethers or working together, sometimes we have a Zoom room open where we just aren't talking to each other; we just have it open and see each other's faces while we're working, which is really nice. Or getting together one on one to work together for half a day and just work next to each other. Not for any particular reason or particular meeting, but just to be in the same space, which is I think helpful for your psyche. ROB: Awesome. James, when people want to find you and they want to find Figmints, where should they go to find you? JAMES: Figmints.com. Fig like the fruit, mints like the candy. You can reach out to me, james@figmints.com, or on our website I think we have most handles @figmints, so Twitter.com/figmints, and Facebook. But email is pretty good, website is pretty good. We're not so big you can't get in touch with us. [laughs] ROB: Excellent. James, thank you so much. Maybe someday we'll go back to conferences and hear you speak live. Until then, thank you for joining us here virtually. JAMES: Yeah, Rob. Thank you so much for inviting me. I appreciate it. ROB: Be well. Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

I chat to James Ryder of RYDER about everything music: living the rock 'n roll lifestyle, being sober, the world being PC, fuck is the word, social media nightmare, New York music scene, Ryder shows, Killer Karma, rock 'n roll is NOT dead, the early days, from jazz to rock, wrestlemania & motorhead, don't jump in front of a bus, signing with a label, merch and so much more. RYDER: facebook twitter Spotify Shout out to CJC Promotions for the hook up to chat to James: Thanks to our Patron RSA Rock 'n Metal Fans Facebook Page for their continued support: Thank you for watching and listening, please remember to like, subscribe and hit that notification bell to be kept up to date with our releases. #ryder #hardtime #killerkarma --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app Support this podcast: https://anchor.fm/talk2trevpodcasts/support

James: Hi audience and listeners, this is James Kandasamy from Achieve Wealth Through Value-add Real Estate Investing. Last week, we had Ivan Barratt, who owns almost 3000 units, almost $300 million assets and he's doing a lot of deals in the Midwest cities and the States. So today we have Reed Goossens from Wildhorn Capital. Reed owns with his partner Andrew Campbell, who's also a friend. They own like almost 1800 units valued at $250 million and they've been it doing almost four and a half years. Hey Reed, welcome to the show.  Reed: Good day, James, thanks for having me, man.  James: Thanks for coming. I mean I was on your show like a few years back. And you know, it's great to have you back here and I know you guys are doing a lot of deals in central Texas, like where my backyard is. I also do Austin and San Antonio, so it's going to be a good discussion on what do we see in the market, right?  Reed: Exactly, exactly.  James: So did I miss out on something in your introduction? Reed: No, not at all. You've hit the nail on the head. I'm sure a lot of people have heard my story. An Australian guy, moved to the United States back in 2012. My background is in instructional engineering. I moved here to be an expat and just to live in New York City and you know, all these years, seven, eight years later, I have found financial freedom through investing in US real estate and I moved here with little funds, no established network. And my whole shtick is that if I can move here halfway across the world and make it happen, then so can the average American sitting, you know, get off the fence and start investing in real estate because it truly is the, you know, in terms of the Western countries, it's the premium in terms of Western countries for yield and commercial real estate. And we can get into that in a minute. But yeah, that's really my background. James: Yeah, it's very interesting. I think sometimes people who have never lived outside of the US knows how much you can achieve in the US. Your own sweat equity, right? You can really work hard and come up and live and they have to really go outside and see how difficult is it to come up. And you can work day in, day out and you can work 24/7 you know, for seven days. There's always a limit your progress. Right? Reed: Exactly. Exactly. No, 100%. James: So let's go back to the market that you guys are focusing, right? Austin and San Antonio, right? So why did you choose these two markets? Reed: Yeah, so historically, originally back in four and a half years ago, we chose central Texas. I chose central Texas, it had moderate cap rates compared to, I live in Los Angeles, California. I live on the coast, very compressed cap rates, looking for something with a little bit more moderate cap rates. At the time, I was, you know, Koji paid a couple of deals with some preexisting partners. I had my systems from underwriting to deal sourcing. I sort of had that down pat. But what I didn't have down pat was a business partner, boots on the ground and that's where I met Andrew Campbell and we formed a partnership. I was getting involved in underwriting deals in Dallas and San Antonio, not in Austin as yet, you know, that will morph into that in a little bit, but in the beginning, it was just like underwriting small deals, you know, between 50 and 100 units. But what I was missing was the boots on the ground, the broker relationships. And so, what I needed was a partner like Andrew who was there, who was in the thick of it, who could go and you know, hang around the hoop and bug brokers while I sort of underwrote deals and did sort of the more the back end operational stuff. And we found a partnership back in 2007-15 I think it is. And yeah, the rest is sort of history.  We underwrote a lot of deals in the beginning, people took a bet on us in terms of, you know, brokers taking a bet on us and then we got their first deal done. And that morphed too quickly in the second deal and now going on nine deals. So it really came, it stemmed from the fact that I was needing to get a business partner who could take some of the workload off me and do something that I had a skill set that I didn't have, which was boots on the ground, access to brokers, access to deals and walking assets and I really focused on the operational side on the backend. So yeah. James: So can you give some advice to our listeners on, I mean, I know you say you needed boots on the ground, so you looked at the market and, I mean, I'm trying to help some of our listeners who are trying to do like what you're trying to do, right? You are in California, you have a partner here in Austin, Texas. And how did the discovery of that partners and boots on the ground, because it's not like I find a guy in Austin and I'm good with it. There must be some qualities in him.  Reed: Yes.  James: And how did you assess that?  Reed: Let's just rewind the clock. I'd been doing deals prior to meeting Andrew when I was living in New York City, when I first moved to LA, when I first moved to the United States. I flipped a few houses in Philadelphia and I had a business partner on that and it was sort of a JV more than a business partnership. I had people tell me that that particular person not to be named, wasn't the best partner to work with. You know, he was unorganized and blah, blah, blah. And looking back on it, he kind of was and it didn't go that great. Well, I'm no longer in business with that gentleman, but it was, I tell you that story because it's a learning curve, right? My first flip deal in Philadelphia didn't go very well. But between him and I, the old business partner, we were able to get the deal over the line. We didn't lose any investors money. And you know, we then parted ways after that because we just realized we wanted different things in life. But I say that because when you're looking for a partner, you need to understand that there's going to be some times you're going to get into partnerships that may not necessarily jive because you're hungry to get deals done and you're hungry to get the business off the ground. But when you first get started, the thing that attracted me to Andrew and what he attracted to me was we had skill sets that complemented each other. And I think that's the most important thing is the skill sets to complement each other. Because if you don't have those skill sets, then what's the point? And actually, you don't wanna be working on the same thing. So, I saw in him that he had a skill set that I didn't have and he saw in me a skillset that he didn't have; complementary skill sets are really, really important. Also, just the fact that both of us wanted to grind. We were not afraid to roll up the sleeves and work hard. At the time when I met Andrew, he was working a full-time job, I was working a full-time job and we were hustling on the weekends. He had kids, I don't have kids as yet, but you know, he had all these other external factors and so did I, in terms of, my mom was sick in Australia. All this stuff was happening and really, but we still knew that our North star was to get financially free and create a business. And years later, we've achieved that, which is awesome. But when it boils down to it is we are business partners first and friends second. I view Andrew's one of my better friends now, but that's because we came through business partnership, right? Andrew also runs a different crowd than I do. He's very much in the, you know, play golf and all this stuff where I'm more of the go surfing. If you're watching this video, go surfboard in the background. You know, I'm very, very different. Ying to his yang and we did a presentation last week at the best ever conference in Denver, my sorry, in Keystone, Colorado. And what we were talking about where was that real estate is the art and science, right? Real estate form is an art and there's a science of it. Andrew is very much the art and I'm the science behind it. So it's the marriage of two different polar opposites that can really make a successful business and partnership work. So all that type of stuff is like you have to assess what you're good at, right? You have to assess your pros and what you're bad at and do what you don't want to do. But you have to also realize that being in this game of real estate investment, you know, whatever size you do, whether it be from flipping houses all the way through to doing large commercial multi-families like what we do, James, you and I, you have to realize that you need a team. And having someone, a copilot, a co-captain sitting right next to you, bearing taking some of the responsibilities and taking some of the pressure off you as an entrepreneur and business owner, it's so vital. It's paramount to the growth because you will grow by bringing on a partner that works and is harmonious with. Then, you know, looking back, I wouldn't be sitting here today talking about 1800 units and a quarter billion dollars worth of assets under management if I didn't go out and find Andrew, vice versa. He wouldn't also be sitting in the same position if he didn't find me. So it's a combination of seeing what you're good at, what you lack at and seeing if you can find someone that can meet you halfway in the middle and that you can get on and you have those similar goals and visions, but you also can work hard to achieve a goal. James: Got it, got it. So I mean when you guys, I mean, I'm trying to go into this partnership because I think a lot of people are trying to get a partner to partner with them and they just need to know how does a successful partner look like when you were like, cause you guys are very successful in partnering up. So how was that discussion? I mean somebody brought up, okay, let's find out, we partner up. Right? So, and what was the other person saying? Because sometimes people say, Oh, well, I'm not sure yet. Right? So there's not going to be like, let's partner up and everybody's going to be partnering.  Reed: Look, let's not beat around the bush here, it is like dating. If anyone's been out in the dating world, same fricking thing. [09:46crosstalk] a few times. I guess Reed: Exactly. [09:48crosstalk] a few people before you get into bed with someone and skews the crass. But you know, it's an interpersonal relationship. It's a feeling you get from the other person that, Hey, this person could work. Now, it could've gone badly, but it's the same, you know, when you do go out on a date, you get an energy from that person, you can feel that they want the same thing that you want. You have conversations, you get to know one another. It wasn't just like, Hey, let's partner. It was over a period of, you know, three to six months that Andrew flew out to LA with his wife. He got to meet my wife. I flew out to Austin, I met his kids. It was a courtship, you know, similar to how you would date someone. And through that, we were able to have candid conversations about where we're headed, the goals and really align with, you know, he'd lost his mom through cancer, I'd lost my mum through cancer. So we had some very much some things that aligned. Plus also the fact that we could hustle and we could grind and graft hard. You know, that was a plus. And we had complementary skill sets. It sort of was ticking a lot of boxes. But at the end of the day, the first couple of deals, we were very much Reed and Andrew. It was RSN, which was my old company and Wildhorn and we took down this first couple of deals, really as individuals but you know, using our entities to partner in case something did go wrong and we can just, okay, look, we'll sell the deals and we'll go our separate ways.  Over time, that morphs into one banner, one marketing arm and that's where RSN falls away and we went with Wildhorn because he was based in Texas and we became more of a partnership. And look, I'll tell you here today James is that partnerships also don't last forever. You know, Andrew and I have had conversations. I'm from Australia originally. I know that in 10 years' time when I'm 43 years of age, I want to have some investments back in Australia. Andrew might not be involved in those deals but for right now, we're looking to double the portfolio in the next three to five years and we're looking to make some successful exits. And that's all I can promise, right? I don't know what's going to happen in 10 years. The biggest thing for me, James, is that I picked up the book Rich Dad, Poor Dad back in 2009 and, you know, we just finished 2019. So a decade later, I'm sitting on a podcast with you telling you about my assets under management. I had no fricking idea that I would be doing that 10 years later. And so what the message is, don't plan your 10 years ahead, work right now. What's in front of you. See what doors open, which is, you know, Andrew and I are having a really successful partnership and relationship and we're going to double our portfolio next three to five years and just be okay with that. And don't worry, the future will figure itself out from there. You know what I mean? Because you can overestimate what you can achieve in a year, but you can underestimate what you can achieve in a decade. And so my whole story, my main message to people out there is when you do look at partnerships, understand that they morph over time. They may come together for five, 10 years and they might go apart and that's okay. That's how businesses evolve. That's how entrepreneurs evolve as human beings. And you have to also, not sacrifice but surrender to that and understand that that might change in the future and that's okay. Right? Because as you know, multifamily isn't very hot right now. It's everyone, every man and their dog is in there so you might have to pivot and change different business structures. James: I mean, absolutely. That's really good conversation there. But some of the key nuggets I want to recap, right? I mean, a lot of people talk about a partnership is always complementary skills, but it's not that, right? I mean, that's one thing, that's just one part of it but there's a lot of core values. I mean, you and your partner have a lot of core values similarity and take time to discover that, right? I mean, based on your family stories and based on your goal because you can find a partner with complementary skills, but who may not want to hustle. He may not have the goal that you want. I mean, there are certain aspirations that anyone who's hungry for achievement want and you know, he expected the same on this partner and I'm sure you guys found that.  So let's go back to the market that you have chosen in central Texas and I'm sure people have learned it's not only a compromise, it's a lot more than that and you guys have to discover it. And one more thing I want to recap on the partnership is the way that you guys set up your company, right? Two of you guys, I remember the RSN Capital Group, if I'm not mistaken and Andrew has his own and you guys kept it separate, which is really good. That's how I would recommend to anybody who wants to do a partnership. Keep the entity separate, put it into one LLC and buy a deal and in case something doesn't work out, you can always fade it out. Right. So yeah, I've seen a lot of people where on day one itself, create one LLC and hold partners on one LLC and they can never split up when something happens. Right. So, awesome. So let's go to the market. You chose central Texas, you found your first deal. Did you find the deal first or did you analyze the submarket first? Reed: All of the above. I was looking in Dallas, I was looking in San Antonio. I was just really seeing what... I was underwriting a lot of deals. Before that first deal came to me back in 2000...sorry, leading up to that point was when Andrew and I met then we went and underwrite like a hundred deals before we go that first deal under contract. But if I look at the why behind central Texas, you also gotta understand where I come from and I made this speech last Thursday night at the best ever conference, I come from a country in Australia and you have to put it in context, right? Because part of my special power, part of my superhero, part of my special sauce that I bring to Wildhorn Capital is my international perspective. And the reason that is so special is though I can look at things through a different lens. So what do I mean by that? Well, I compare just to Australia and America, right? Australia and America, the land of mass, I'm talking about excluding, let's ignore Alaska for a second, but just those two landmasses, they're roughly the same size, give or take. However, in Australia, we can only inhabit about 18 to 19% of our land because the rest is a desert. And so everything is full. Everyone is forced into major cities. Everyone's forced to the coast. And so we have a small population, we only have 24 million people. Unlike here in America where you can inhabit North to South, East to West and you have 300 million people so we don't even have 1/10th.  The reason I'm bringing all this up is because I grew up in an area where we have a high demand but low supply environment, right? What does that mean when you have high demand, low supply environment? You have low cap rates. In major markets in Australia, in major markets in other Western countries, commercial real estate cap rates are sub 3%. I'm going to spout off some big names, but you look at London, you look at Sydney, you look at Hong Kong, you look at Singapore, office space and then there's probably the only thing that is a common thread between all of them. Office space in those markets are sub 3% maybe even 2%; where you can buy office space in New York City or LA or now even Austin for full cap.  And so when you've got these international perspectives of like, wow, I've come from a market where historically there's been low cap rates for decades because of supply and demand and I see the same thing happening in central Texas where the GDP of all of Texas is greater than that of all of Australia. I'm doubling down on that and that market, because a place like Austin, Texas has now transitioned from a boom-bust town into a tier-one market like Los Angeles, like Sydney, like Singapore, like London. Where dirt is trading for as much or even more as the coastal market. So when you have high demand like you do in Austin, low supply coupled with a very high barrier to entry for new product, which means buying dirt, getting an approved construction, doubling down on existing assets in a market like Austin means that coming to the recession in the next couple of years, you'll be able to ride that out because you have a high demand and a low supply.  I also come from a country where we have not had a recession in over 27 years because of, obviously physical policy, the way in which we invest our pension funds is a lot deeper than that. But again, I say this all to give you the lens that I look through when I'm looking at different assets. One other thing that not many people know, multifamily does not exist in Australia because of the lack of financing vehicles. We only have 25 million people. We have four or five major banks. Those four or five major banks do not lend money on a new apartment construction unless you've pre-sold X amount of units, which is a combo market. So they lend on a build to sell, not a build to own. Right? And so when you don't have those sophisticated financing vehicles as you do here in these States, you know, Freddie Mac, Fannie Mae interest only for 10 years, Ameritrade over 30 years, the fact that multifamily doesn't even exist in Australia when I first moved here coupled with population GDP growth, seeing markets transition from a boom-bust into a high demand, low supply environment, seeing markets transition into, it's a high barrier to entry for new product, all those things add to why I would double down in a market like that into help me ride out the next 10 years.  Because remember James, the last 10 years that we've had just had, since 2009, has been the best 10 years for multifamily, probably in history, right? We're not going to see the next 10 years are not going to be the same. And so as an investor, as an operator, you need to look for markets where there's true growth. Now, you compare Austin to New York and San Francisco and LA, money is still being invested in those markets because of the demand. So people still invest in these coastal markets because of the longterm gains that they are going to make. And a lot of people have made a lot of money in a short term period over the last 10 years and I think that's going to be the same trend moving forward. And that isn't completely incorrect. And if you think that's going to happen, you need to go invest in something else, in my opinion, James: It's crazy on how much the tide has gone up or the past 10 years and everybody thinks multifamily is the same, right? It's a commodity now, but it's not. I mean, at some point the wage growth is going to hit some limitation and you're going to have a problem, right? So you have to be really ready as when you say; that's really awesome. And the other thing about Austin though, other than coastal cities, a lot of coastal cities are getting rent control, whereas Austin, I don't think that we'll ever get a rent control. Even those20:30unclear] city, but it's in there. Reed: Yeah. Even if that was to happen, people still make a lot of money in places like LA, New York, San Francisco, they're making a lot of money and it's because of the value of the dirt. And everyone's got to realize you buy real estate for the value and now that is what is intrinsically is going to grow over time. The fact that when I first moved to this country, I noticed that land, at least in LA, in New York and San Francisco, land is key. You're right, it's what holds the value that, the asset depreciates over time, but in central Texas, the asset is more valuable than the land, that's slowly starting to change, right? As demographics changes, people move as population grows, as GDP grows, all that sort of stuff in terms of supply and demand; that then means that dirt is worth more, right? Dirt is where the value is. And if you hold it for a long period of time, I'm talking seven to 10 years, you're going to do just fine. James: I was happy to know that. You know, I'm not sure whether you'd known, Tim Ferris moved to Austin like a few months ago, a few years ago. I need to find out why. I mean, I listen to his podcast and his podcast is awesome, right? So, let's go to underwriting. So let's say you get a deal today, right? What are the things, what are the sniff test that you do before you look into the second level details? Reed: Yeah, look, stiff test, it's a hard thing for a sniff test these days because there's so much more to this story. It goes back to the art and the science of underwriting. Back in the day, five, six years ago, yeah, you can do back of the napkin and  does it make sense? Yes. Does it not make sense? No, because you had so much, you had a cap rate that was moderate and you had an interest rate that, you know, was a Delta of maybe 200 basis points you could get cash flow. Today, it's not like that; that spread between interest rates and cap rates have compressed, right? Its cash flow becomes harder to achieve, thus you need to understand the story and that's where the art comes into it, not necessarily the science. So I still look for a spread between going in cap rate or a stabilized cap rate and interest rates. I want to make sure there's at least a hundred basis points in there and that's growing over time and when I model it out over five or seven years, that continues to grow. But I also want to see now, I'm looking at deals where there's other opportunities. So, we are about to buy a deal south of the river in Austin, Texas. It's the lowest cash flowing deal we've ever put out. And we're oversubscribed to that deal because of the location. Now what you don't know, if you looked at just at the numbers on that thing, you think, Oh God, it's a really low cap rate, but you don't realize that if you don't know the story behind what's happening in that area, 600 units are going to be completely demolished and taken offline in the next 24 months. So do you think that's going to have an impact on our rents and the occupancy? Of course, it is. But how do you underwrite to that? You can't, you've got to underwrite it if it's a value add multifamily.  This is where the story comes in and where you need to go bigger than the sniff test because this is what market we're in. Also, we know that this land that we're buying, we're buying 12 acres where the density could be doubled on this plot of land. It can go from 294 units, we could go and put 500 units on it. Now whether you go and execute on that as a different thing, but that could be an exit option for someone in the future for a developer to buy if all these investments in the South of the river there near the Oracle is to come to fruition. Then again, I'm seeing very similar trends as if I'm looking at an ally or a New York market. So these are all the things that I look at now and you have to go deeper. You have to do more than just a sniff test because we're not in those days anymore. We're in a different market and we have to spend time. I have four analysts that work for me and they spend a minimum of three to four hours on any one deal. Andrew is the guy that makes sure he feels out the deals that we see but if he thinks that there's a bit of a something a little bit more to sniff out and he's got a little bit more an art to it, than the science, then we will dive deep into it and we'll spend three or four hours underwriting it. And it still might not work at that point, but we've gone and exhausted all avenues to make sure that it isn't a deal that works for us. James: So, what you're saying is you have stopped looking for the normal cash flowing value-add deal. You're looking more for the path of progress and you know the story behind the deal as the future appreciation I would say, future potential in that deal., I guess. Reed: Future potential because your whole podcast name is called increasing your wealth through adding value, right? You may add value by entitling the land to have a bigger a density on it. That is adding value.  James: Absolutely. Absolutely.  Reed: Any way you add value but historically it's been all, we'll put lipstick on a pig and hopefully it looks good. So that's gone, right? There are still those markets out there. There's still these deals out there. You can still find them and don't get me wrong, but when you become more sophisticated when you become more advanced in your underwriting when you become more experienced, you start seeing different trends and why the big guys, and let's not beat around the bush here, I've worked for big developers in LA, in New York, and they don't have podcasts, they don't have books, but they own half of Beverly Hills. The reason the way the big dogs are, they're still buying these pieces of dirt, they're still buying these trophy assets and putting it in. They're still selling to rates, they're still selling to insurance companies and making a lot of money and you've never heard of their names. So I've come from that background and that is where exactly how my mindset has now shifted to start understanding the pennies dropped, ah, and now I know why those guys do what they do is because of the value which the supply and demand curve, we go back to that a lot, that demand is high and supply is low. James:  I mean it's very interesting, look at things differently. And I met someone the other day who was buying land on a, it's called a submerge land, land under the Lake. And she was saying, Oh, I sell that. I say, how do you sell that? So it's a very interesting story on when a boat comes, you know, you need to dock on your land, even though it's under the water, but they can still sell it. Mixed with different kinds of people, go out of this, the normal value add, I would . To see those kinds of things. So yeah, it's absolutely, you know, it makes sense to do creative stuff as long as you're doing it in the right market. Reed: It does all come down to market and it does all come down to just reacting to the market. Right? You got to react and you go to, as entrepreneurs, we're riding the wave, the wave of change is ever-evolving. And so we have to be ready to look at things through a different lens to not be ignorant of other options that you can do to your property. Because you know, it's about being creative, just be creative with the piece of land and you can figure out many different ways in which you can make money from it. So it's just understanding that rather than just plugging, implying and you know, buying at a six cap and getting interest rates at a full cap and having all this cashflow and yada, yada, yada. There are still those deals out there, they're a lot harder to find and thus you need to be a little bit more educated in terms of the value that you bring to your asset now coming into, you know, a new economy that we're in. James: So do you see some of the investors who are used to getting cashflow and doing value add on the rent and all that, do you see some of the investors dropped out? I mean they don't buy into the idea or you think a lot more people buy into the idea or you just finding different people buying into the ideas? Reed: Last year we rolled out and we were the first ones in the industry to do it in the multifamily industry, at least in our little circle, the AB structure, we brought that to market first. We closed on a deal first. The way we do that is by offering 25% of the equity has 10% preferred return paid current. And that means that you can satisfy those cashflow customers or investors with that class A bucket. Class B bucket that they have an accruing pref but they get all the back end. They get 70% of the backend so they're looking for the equity multiple and we then divide it out the investor group into two pots. We can now see who wants what but what it does mean is that if we buy a deal that cashflow is 2% out of the gate, which is pretty much a lot of deals only cash flow very little out of the gate, you can pay that 10% pref straight up to 25% of the equity.  If you have 25% of the equity not participating in the backend, then that juices the IRR to the class B. All these things we are doing in terms of structure because we are reacting to the market and because we're not just blindly going along and not getting any deals done because, oh, it doesn't work like it used to work. Well, we're changing the way in which we structure ideas. We're changing the way in which we underwrite ideals to back into making sure we're appeasing our investors that have some cashflow, a bucket but we've also got the equity appreciation bucket and having honest, candid conversations with our investors that, hi, if you give me 100,000 bucks, does it really matter if I give you seven grand every year? Is that going to change your life or does it more matter that you give me $100,000 and in five or six years' time, I'll give you back $250,000? Is that more valuable to you?  When you have those conversations with those investors, they start thinking differently. And people that they think, Oh, the pref isn't being met, oh, that means it's a bad deal. No, it just means that the deal is getting out of the gate into different velocities where another deal is. And so looking at the longterm play, real estate, James, is a longterm play, not a get rich quick. And that's why I say a lot of people have done so well with their money in the last 10 years. They've doubled, triple their money in three to five years and I think that's still the norm. Well it's not and that's where you have to readjust your expectations. And that's where, again, my international perspective where I've come from a country where if you double your money in 10 years, you're doing just fine. The longterm play is what real estate is and people sometimes lose that vision of what longterm means and they think long term is three years. James: Yeah, that's true. Sometimes people are just so used to what they make in the past 2012 to 2017/18, keep on looking for the same yield and you know, that kind of deal is no more existing.  Reed: And investors appreciate being candid. Investors appreciate having those open and honest conversations. And why would you take a lower return? You're taking a lower turn because it's risk-adjusted. You're not investing in a tertiary market or a secondary market where it may get really rattled if they have another recession, you're investing in lower risk, and thus you have to adjust your expectations when you go and invest in a market like Austin with lower risk, low margins. James: Yeah, yeah, yeah. Risk-adjusted return is something that a lot of people don't understand. I mean if you're making 6% in an awesome market compared to you're making a projected 8% I would think is projection in the beginning, maybe before you invest, everything's projection, right? Someone tells you they're going to give you a 20% IRR in a tertiary market compared to someone's going to give you a 10% IRR in a solid market. That 10% is actually much better than the 20%  because the risk is lower.  Reed: The risk is lower. But also you look at like if you want no risk, go put your money in a treasury, the 10 year treasury and that's what 1.32% if you want zero risk, go do that. And if I'm offering you six or 7% return, I think I'd rather place my money. So backed by physical real estate where you can have all the tax depreciation, no other investment holds up. So obviously the stock market is doing very, very well, but you have to also combat apples to apples and that is, you know, one is risk, two is volatility, three is tax depreciation and four is access to capital. And so all those things play into effect when you think about real estate versus other ways in which you can make money in this world. So yeah. James: Yeah. I think I saw the way you guys structure the class A and B, where you have one person class A is like flat 10% or in a certain percentage, I can't remember the number. Reed: It's flat 10% but the class side does not participate in the back end and then you've got class B that has an accruing 7% pref and you catch up upon sale but they get 70% of the back end. And those investors are more focused on the equity multiple rather than the cash flow. And thus, you're splitting the bucket but you still offer them both. The investors can still have some in A and some in B, but you limit the cost A to 25% of the equity. So it helps, you know, juice the IRR. James: And does the class A, the 10%, get paid from day one itself?  Reed: Correct.  James: Okay. Okay. Reed: You can do the math, right? So if you have $1 million of equity, 25% of $1 million of equity is $250,000. 10% of $250,000 is 25 grand, a year. Now, $1 million in equity, that's probably going to buy a $4 million property. You think a $4 million property could cashflow in any one year, 25 grand? I think it could. Yeah. So that's where the special souls comes in because you're paying 10% on 25% of the equity. So thus your cashflow out of the gate can be lower and you can still hit that 10% preferable. James: Yeah. So do you see...we trying to get filled up fast. I know one has a smaller pool, the other one's bigger, right?  Reed: So, we also have a higher barrier to entry on the class A so we have $100,000 minimum. And we have a lot of people wanting class A. The thing is we tend to see costs, on the first deal, it got filled up really quickly. On the second deal, it was a little bit more equal, you know? So, but here's the other thing, class A investor is if my deal, I'm not hiding anyone from it and it's the truth, they get paid first, right? So if I go and refi and I hold it for five years and I decided I'm not going to sell, I'm actually going to refi, well, I can refi it and pay all my investors costs I owe their money and they're out of the deal. And I can replace class A with cheaper, cheaper debt, right?  Cause if I'm paying them 10% of their money and I can get debt at full percent, then I've just essentially, you know, taking them out of the deal. Now there's a risk there that they're out, right? And I have investors saying, well you could just come along and do that. It's like yes I can. That's part of, you know, real estate and debt stacks. Right. I can just replace as the value of the asset grows, I can replace the debt and I could potentially have a debt number that could take you all out of the deal. They've gotta be okay with that. But they sit in a safer position, they sit just behind the debt. They don't sit in class B, they sit in class A side.   James: Got it. Got it. So it looks like if you look at class A and you are saying is much more attractive. A lot of people compared it to class B [inaudible] right. Can you hold on, let me just fix my staff cause I didn't want this to be half. Okay, good. So forget about it. So let's start again. So class A has a lot more attractiveness to it and compared to class B because class A people get 10% flat, I guess, right?  Reed: Well, yes and no, there's pros and cons for both. I just explained the class A that yes, I sit at and I have a 10% pref, but their cap did it at a certain return. They cannot earn any more than 10%.  James: And you can buy them out at a refi? Reed:  I can buy them out at any stage and if we smack the deal out of the park and 20% IRRs, they share none of that because they want to sit in a safer position. And that's where class B, yes, you're sitting behind class A, but you get all the profits, you know, we split all the profits, profit sharing at the end. And so again, you have to understand capital stacks and you have to understand risk in relationship, just capital stacks in order to really grasp your mind around the AB structure. It's pretty simple once explained. And I can show you a diagram if for any investors who might be interested in it, but again, it's just a different way of looking at it and I come from the ground up construction world. I've built a lot of ground up multi-family. This is exactly how multi-families constructed a finance. Your debt, you have a mez equity piece, you have equity, and then you have the GP and it's just capital stack and math. So it's very basic, once you get your head wrapped around it. And probably a lot of people scratching their heads thinking, Oh my God, what's he talking about? James: No, no, for me, it's pretty simple. I mean, I think it makes sense. I mean there's risk in both classes and you take that risk. I mean, even in my book about, you know, different investors want different things. Some people just want cashflow, 10% flat cash flow. Some people really want the equity. I mean, it depends on their life cycle, where they are in your life cycle. Reed: And so as an operator, I've got to continue offering that. And the way I've offered it in terms of how deals and now underwriting is, that's how I've split the baby from the bathwater as they say. You know, I've split it and made sure that I can serve as both the type of investors who one wants cash flow, the other one wants longterm appreciation. James: Got it. Got it, got it. So, Reed, let's go to more personal stuff. I mean, can you name like top three things that you think is your secret sauce to success? Reed: That's a hard one. Look, there are no secrets. Hard work is...let's talk about secrets. Hard work is so underestimated. I moved to this country. I didn't have a job. I was an engineer. I literally dawned on a suit and I knocked on 50 different engineering joints and engineering companies until I found a person to say yes. I'm not afraid of hard work. Am I lucky? Have I got a bit of luck in this? Sure. I'm lucky that I was born into a really awesome family that, you know, I come from a blue-collar working background, I've got blue-collar work ethic. I'm not afraid to roll up the sleeves and get my hands dirty. I'm also not afraid to back myself. I think that's another key to success is like you've got to learn and you've got to be okay with betting on yourself. And I remember when I first took that plane from Australia, I quit my job, my well paying job in Australia and I moved to the United States to give it a crack. As I say, you know, I was betting on myself. I was betting that I can figure this out. I might not have had the answers at that point, but I knew that I was resourceful enough to figure it out and I have. And so those two things, there's a little bit of luck in there, but it's also hard work and learning to back yourself; are really too important skill sets, life skill sets that that people need to learn. And I've developed that through going and backpacking around the world with, you know, $2,000 in my pocket, you know, understanding the value of a dollar and stretching a dollar. You know, people ask me all the time, well, what advice could you give to a 20-year-old? Go backpacking, go to a third world country, go backpacking for two years, come back and then you go find yourself, you go in the university of life, figure it out, go understand a little bit of the street ways and then come back and you'll get started. I think going out and widening your horizon, taking off the blinkers and experiencing other cultures, otherwise how people live their lives is all parts of learning and why I that I've been very lucky that I was able to travel and I paid for my own travel. I've saved my own money. I was able to go out and do it and experience different cultures, take on their advice, take on the wisdom and internalize it and spit it out and say this is what I want to do with my life. So a couple of pieces of advice of success there. James: Yeah, absolutely. Now I realize why people go backpacking and never really understand, but you made it very clear, right? Cause you really like on the street with a shoestring budget and you're talking to different people, you're talking to normal people. Reed: You get a skill.  I'll tell you a story. I was in South America, this is 10 years ago and I had a rule. I was backpacking by myself. The most invigorating thing I've ever done in my entire life, James i,s to backpack by myself. I had no one to answer to, I would meet someone at a hostel or a group of people and say, this is awesome, let's go. But you get really bloody good at determining if you're going to be, you know, you only have 30 seconds to make an impression and I'm going to either have to have a beer with you or I'm not gonna have a beer with you. And it was very quick, that skill became very, very quick. I had a rule that when I was backpacking by myself, you know, if I go into a bar and I hadn't met someone within three drinks, I'll move to another bar. I never left that first bar because it was always about putting yourself out there, being vulnerable, talking to other backpackers and getting that interpersonal skills really sharpened and really honed in. And that's part of what you learned from backpacking.  James: That's very interesting. That's the perspective that you get when you go backpacking. Let's go to another one more aspect of your life. Is there a proud moment in your life that you can never forget until the end? One proud moment that you're really, really proud that you think, I'm really proud of myself. Reed: I think getting that first job in New York City, getting that first job, getting that visa, I was proud that that was, I did it. Like that was the coming to America story. In order to stay, I needed a visa, I needed a job. And so that proud mate, if I got that job, it meant that that was, you know, talk about doors opening. That was the first door that I could unlock. And that then meant that there's a bunch of other doors behind it. But that meant I could stay and I could figure it out. And that was the first proud moment that I think, it was, you know, again, I was literally walking the pavements, knocking on doors because in 2012 you know, putting your resume out into the indeed.com or whatever just was useless. I needed to go knock on doors and say, Hey, here's my resume. I'm more looking for a job. And a lot of people said no, but it takes that one, yes. And that one yes can change your life. So that one yes for the job that meant that I could stay in the United States. It meant I can continue the journey.  James: Got it. Got it. So one other question from one of the passive investors is like, is there any advice that you would give to passive investors that are investing in a syndicated commercial real estate? Reed: Yeah, I think the biggest thing is you have to have an alignment of interest, trust, and transparency but do you get on with the operator? Because the number one thing that passive investors want to invest in is they don't actually invest in the deal, the deal is sort of second secondary, right? The first thing is the person. Who re you investing with, who is your partner that you're going to go into this deal with, who is the operator who's going to take control of this asset? And if you don't like them or you don't have that energy that I spoke about earlier, then don't invest with them. And it's very easy to figure out who you like and who you don't like. And again, this is a world, of  life is short and you want to do business with people who you like and you want to be with, right? That's the whole point of why we do this business. And it goes both ways, both from the operation point of view, my point of view, and also from the passive investor point of view, we're all in this business to make money. Let's do it with people that we like. So I think that's the short of it. James: So Reed, why don't you tell our audience and listeners how to get hold of you and how to Reed: Yeah, sure. So I've got for those listeners who like to read, I've got two books. I've got the Investing in the US which is on Amazon. It was a bestseller last year. You can find that and I've also got 10,000 Miles to the American Dream, a story of financial freedom. So those two books are on my website or on Amazon. You can go to reedgoossens.com, that's www.reedgoossens.com. Everything's up there. My podcasts are up there, my blogs are up there. If you have any questions, you can click on little links and stuff. And I always offer people or listeners, if they're coming through LA and they want to meet up for a beer or lunch, I'm always interested to meet up and talk shop. You just got to email me at info@reedgoossens.com and just give me enough heads up and let me know when you come through town. James: Awesome. Great. Welcome. And thanks for coming into the show and I'm sure you added tons of value. Reed: Thank you very much, mate.  James: Alright, bye.  

James: Hi, listeners and audience, this is James Kandasamy from Achieve Wealth True Valued Real Estate Investing Podcast. Last week, we had Rich Fishman(?) with 8,000 units. Almost half of which he owns by himself and he had bought over 20 years across five to six different states. And he gave us an outstanding overview of what happened during the crash of 2008. Was it true that everybody needs a roof above their heads? And that's what a lot of gurus are telling us in multifamily or is it true that multifamily has the lowest default rate? You will definitely need to listen to that podcast. Because he went through the whole downturn with all his multifamily(s) and came back up after the cycle and he gave a lot of awesome perspectives. Today, we have Kevin Bob. Hey Kevin, do you want to introduce yourself? Kevin: Hey James, I'm excited to be here. Yeah, I'll give you the quick overview for sure. So, I have been investing full time in real estate going for on 20 years now and I got started like a lot of folks did with single-family investments. It was just what my mentor was doing. It's what he was good at and what he taught me and so I didn't reinvent the wheel. I did exactly what he told me to do and that evolved into multifamily investments and other types of commercial real estate. That led me up to the crash of 2008. That's a very challenging time. It kind of was reborn in 2011, 2012 and was introduced then to mobile home parks. Which is what we focus on today. So, for the past seven years now, we've been solely focused on mobile home communities. We own parks in thirteen different places throughout the US and that's our niche of choice as of now. James: Awesome. Awesome. I mean, Kevin is being very humble. So, just to give you guys some background when I was in my W2 job, one of the first podcasts that I listened to was Kevin's podcast. I mean, the podcast is called Real Estate Investing for Cash Flow With Kevin Bob and it's an awesome podcast. It focuses a lot on commercial real estate and I really learned a lot when I was in W2 and I was listening to it in the car. Are you still doing the podcast, Kevin? Kevin: I am. Absolutely. I do two podcasts. So, I do the Real Estate Investing for Cash Flow Podcast and then about three and a half years ago I thought it was a good idea to start a second podcast as if I wasn't busy enough already. And I started the Mobile Home Park Investing Podcast, which is specific to that topic. James: Got it. Got it. Kevin: James, I remember the first day we met. Not to interrupt you but I always joke with you every time I see you because I got a weird memory. I forget a lot of things but I remember the odd things and I do those free Friday calls. I've been doing it for like five years now. And I remember that's how you and I originally met. It was during one of those 30-minute calls on a Friday and I don't recall why I remember this part of our call but I had been making lunch with my Bluetooth in while we were talking about a multifamily deal that you were taking down in San Antonio, Texas. James: Yeah, it was my second deal. I was buying 174 and have you found it on our yellow letter marketing campaign. It is very interesting because when you had your podcast, you announced it that you're giving thirty minutes of your time and I was like, ‘Wow, that's awesome. I'm going to talk to a celebrity.’ Right now, I do offer like fifteen minutes of my time for whoever wants to talk to me. You just have to send me an email at jamesatachieveinvestmentgroup.com. We're not big celebrities.  We're just normal people. Kevin: I get as much value from those calls as the person on the other side. That's how I like to think and you just never know who you're going to meet on the other end of the phone, right? I mean, that's how I that's how you and I met. You just never know and so I think that you have to keep that normalcy in your life and I enjoy those calls. I’ve met a lot of great people on the way. James: Surprisingly, I still remember the day you called me and the moment you called me. I'm not sure why but that was like probably five, six years ago. And I don't remember my other calls. Kevin:  Yeah, yeah. I have been on for five years. Yeah. James: Yeah, that's awesome. Awesome. So, I mean, I want to dive deeper into mobile home parks. I can see you have like a 150 million real estate transaction. Is it all mobile home park? How many parks do you own right now? And can you give those kinds of details? Kevin: No, we don't have. Our current portfolios are not 150 million. That's just that's like my transaction for the principal. You know, investments over the years. James: Thanks for being honest, Kevin. Because a lot of people misuse those big numbers to do their marketing and then we find out they don't have anything. They're probably on a passive investor and that's really awesome that you're being very upfront with that. Kevin: Yeah, I’m the majority principal in the parks we own as far as on the GP side and things like that. So, we'll get that clarity out there as well. James: Awesome. Kevin: We're not really sellers. So, to answer your questions about what we own today. We've been teetering around like the 2,000 mark. We go above it. We go below. We have a park that going to be closed in a week and a half. We sold a park earlier this year and then we're going be selling one in probably February next year. That's in contract currently. We got one that we're closing on in 45 days, which is 215 lots and so we keep teetering around this 1900-2000 mark. We've really been evolving our portfolio by selling off some of the smaller properties and by selling off some of the properties that we don't really have an interest in scaling in a particular marketplace or maybe it's just one that just doesn't fit our model moving forward. I don't know how else to answer it other than that. So, that's where we're at today. We're really long-term cash flow investors, though. That really is our business model. It just as far as the selling side of things I like to take advantage of an opportunity when it arises. That's one thing I did not do before 2008. I never would sell anything and it came back to bite me at that point. So, I am not a seller. However, I will sell when the timings right the price is right. James: Yeah. Yeah. Let's talk about that experience. Because I heard about that in your podcast and so you are doing single-family homes before 2008 and you were doing very well. Kevin: And multifamily but mostly single-family was our focus. That was our business model. It's what we were very competent at. We had acquired a few hundred multifamily doors over the years almost by accident. We didn't really put much effort into it because deals would just come our way like small multifamily stuff. Thirty-six units forty-eight-unit type properties that we just kind of threw into our rental pool. However, the biggest part of our model and the thing that took the most time and energy was a single-family. You know, buying the single-family rental properties and managing a portfolio across multiple different counties was just very inefficient. And it's unfortunate because I think we just got very complacent with our model. You know, we were we felt we were really good at it and we never took the time to be honest with ourselves about how inefficient that was and that we should have just taken our efforts and converted them over to multifamily at that given moment. I think that we would have fared through the downturn a lot better. The single-family properties… it wasn't really the single family that sunk us during the downturn. It was a whole mixture of ingredients. You know, Florida was ground zero for the crash. A lot of our properties, not only did they lose within a year but they also were upside down. Our leverage point on the front side was originally somewhere in between the 65% to 68% range. So, we were very low leverage. Most of them were upside down underwater within a year. Another big thing in Florida that really was a major impact on us was there were a lot of speculative single-family builds happening back then. I don't know if you remember back in that heyday. I guess you could say that was back when a new build property in like Vegas or Phoenix or Southwest Florida would literally flip three times before it was ever even occupied. Before it was ever finished. It was crazy. There was like thousands of new home builds happening in Southwest Florida for a population that wasn't really coming in. So, the big nail in the coffin for us back then was a lot of these builders that had these properties who weren't selling and they started renting them out. And so now, they started pulling the populations away from our rental properties and they offered better incentives. Because what they had was a new product. So, we had an occupancy issue. We were under wonder water value and like it's just a perfect storm and it was ugly. It wasn't fun at all. And the banks at that point weren’t willing to work with us. This was like a year within entering into this downturn. The banks didn't have loss mitigation departments. They weren't prepared for this and so we struggled with a majority of our lenders to even do work out deals or loan modifications. James: Yeah, I read some books about how the lenders can be nasty during the downturn but now they're super nice. Kevin: I think they got a lot more flexible. Because they had to. In the first year of the downturn, no one knew how bad it was really going to get. It was like ‘Are we at the bottom? Are we at the bottom?’ I feel like that question was asked for many years before it's like, ‘wow, it's 2011 and it's still messed up like things are still fairly bad.’ You know, I think it took the bank's a while to realize that and they even put the infrastructure in place to manage all these defaults. It was a disaster for the banks as well. I mean, they had more defaults than… they had to build entire departments within their companies to manage this onslaught of default. So yeah, it was a challenging time for everybody. James: Do you think you could have done better if you had a lot of non-recourse loans? Kevin: Yeah, absolutely. I mean, as far as my personal assets being attacked and things of that nature absolutely. And I think there is also a lot more flexibility with the non-recourse lenders to work with a borrower because they have quite a bit of leverage. You know, another thing that hurt us pretty badly on our part was a lot of our apartment properties and a lot of the commercial loans and a lot of times we would package up like eight to ten or twelve single-family properties and put a commercial loan on and it takes money out. That was kind of our model. A lot of that debt was shorter-term recourse debt. It was five years,you know, either resets or five-year balloons, twenty-year [inaudible10:23]. What happens we didn’t default on multifamily. However, after all the credits were going bad on the single-family stuff and we started having issues there. We couldn't get new loans when the time came due for them a couple of years later. We couldn't get any debt in place. We had to sell things for basically fire sale prices and give them away. We basically either gave it back to the bank or did some minor workouts, did short sales or had to sell at fire-sale prices. It is what it is. I learned a lot from that period and things move on and I've learned a lot from it. And I think I'm a stronger investor and a better investor nowadays because of it. James: Absolutely. Absolutely. So, you brought up three or four cities that are very, very high growth right now.  We’re at the late stage of this cycle. Which is similar to 2008 before that. They are Phoenix, Las Vegas and Florida, right. So, do you think we're in the same stage right now because they are one of the highest growth rental rates for multifamily? I would say I'm not sure how much you would be able to compare multifamily at that time.    Kevin: I think the reasons behind the crash back then are a little different. I mean, back then the lenders were so loosey-goosey. Because anyone could get a loan and I mean anyone. Even a waiter who just started the job yesterday. Who had no provable income could get a loan on a property. You know that that's one thing that hasn't gone back to the way it used to be, lending restrictions are still very tight. So, I don't think that we have that fear. I'm not an economist and by no means am I an expert here but I don't think our fear should be related to anything that was similar to back in the 2007, 2008 crisis and what caused that. So, I'm not sure what it could be. I know that there's a huge demand for multifamily. There’s a pent-up demand for supply still in a lot of these markets based on population growth. I think that the bigger risk lies and like A class stuff or like some new developments as far as like, you know, the game of musical chairs. It’s about who's ultimately left holding the bag. I think that what you do as far as like BNC grade apartment complexes are very similar to our business and that as long as you provide a clean, safe and high-quality product at affordable prices. There's always going to be a demand for it no matter what happens. I'm a firm believer in that and that's played out time and time and time again and that you were making mention of the last guest you had on. I'm going to give listen to the show but what was his take? You know, what did he tell you was the ultimate outcome of his multifamily holdings through that downturn? James: Yeah, it was very hard for him during that downturn. I mean, He has to cut down a lot of it and if I remember correctly the default rate was pretty high. It was like almost 8% where a lot of people did lose their property to the banks. Kevin: I wonder if that was because they were over leveraged but I'm not talking about him though. I was talking about the operators. See that's it leading up to that recession and the last time people were overpaying for apartment complexes and if you recall one of the big the big hot trends were buying an apartment and doing a condo conversion. So, you saw people buying apartment complexes for valuations that had no relative nature to the actual NOI that was in place. It was all based on a pro forma exiting out as individual condos and a lot of those condo things failed miserably. Anyway, how did the guy you interviewed fare? James: I think he was not talking about condo conversion. He was just talking… Kevin: I mean as far as multifamily investments. How did he fare? How did his investment go? James: He did say that it was pretty bad for him and for a lot his friends and who were buying at that time. Kevin: Specific markets or…? James: Across the country and he has been down twenty years right now. I mean, he has like a thousand units right now. The key thing is I mean everybody says ‘everybody needs a roof over their head.’  But he's a says that people become creative on how to get a roof above that they’re head. They double up. They live in their basement. So, it's not like everybody's going… Kevin: Yeah. Well, I think another thing that changes is  the quality of your prospect changes as well. You know, people lose their jobs. People miss payments on their credit cards.  They get bad credit. They get into this revolving cycle or downward spiral. And so, although everyone does need a roof over your head, the quality of that prospect might change. It might actually deteriorate over time but what you can really get to fill that unit which a lower quality resident typically is going to equate in a higher turnover, rate higher expense and maintenance costs associated with running that property. So, I think that there are other factors that are derivative of a downturn  even though everyone does really need a roof over their head. James: Do you think the optimism that you had or the entire market had before 2008 crash like in 2006…  I'm sure everybody was optimistic. Nobody knew about the subprime mortgage. Because nobody really knew in detail, right? Do you think that the optimism that people had during those few years before the crash is the same as now? Kevin: There's some Deja vu that I've had and I think maybe a lot of that has to do with even just watching like social media feeds and things of that nature. A lot of the kudos and congrats are given to folks just because they like buy a property and that’s only a part of it. James: They just started running. They haven’t done the marathon yet. Kevin:  It not what it looks like today but it’s can you execute the plan accordingly? What does it look like three years from now? Because you bought something doesn't mean that you've won yet. It's easy enough to get on the front side. So, that's a different form of that optimism. James: Social media has increased the FOMO syndrome. Kevin: Yeah, that's it. Success seems to be equated on social media to actually just doing a deal. Whatever it means to get the deal done: overpaying for it, over raising investor capital, putting capital your investors capital risk. I mean buying bad markets and I think that was a very similar sentiment that was shared by a lot of people back prior to the crash. ‘If we don't buy now, there's like anything left. We’re going to get priced out of every market and then will never own real estate. Let's buy whatever we can. Let's get that 95% loan.’ So again, the lending standards have not gone back to what they were then. Which was a big cause of that crash. But I do think that there's some Deja vu that I've had.  You know, the FOMO thing… the fear that you’re missing out, that's real. We've seen things be much more competitive over the past year. We bought nine properties last year and we wound up buying two this year. So, we did get side-tracked a little bit this year with building a property management company. And we that's another discussion but even then, I don't think we would have bought more than maybe three or four properties. If that was our sole focus but we're very conservative. I think we had seven or eight deals in contracts that we ended up killing… for various reasons.  There just a lot of hairy things out there and you can make money with hairy deals but you got to really know what you're getting a deal go to. James: Yeah, exactly. I mean, that the experience of going through the crash will make you’re really a conservative person, right? Because people have never gone through it [inaudible17:59] including me. I didn't go through it. So, I didn't know how painful it was, right?  But I do read a lot of publications and try to feel the fear at that time. I mean, you can be too much of an optimist. I'm not so engaged in the height of optimism right now. So, you did single family and you went through this 2008 crash and suddenly you started doing mobile home park. Why that mobile home park asset class and why not go back to the single-family apartments? Kevin: Well, it's a great question. So, I answer the second part of that question first about why not go back to like single family properties. You know, I finally had an internal point of reflection probably like two years after the crash started. There were a couple years where it was pretty challenging to even think about what was happening in my life. So, there were a couple years, I don't like to say that I put my head in the sand and buried it. But somewhere around, 2010 to 2011 I would go through like a reflection point in my life where I tried to look back and just really be honest myself like, ‘what I should have done differently.’ What I ultimately felt went wrong and I came to a quick realization and I kind of knew it back then.  You know, you're comfortable and complacent you know we should have made the switch. Our model is very inefficient with the single-family properties. You know, running multiple maintenance crews and management crews amongst many different counties. You know, having a home here, a home over there, home over there, hundred something that way. It was incredibly inefficient and it was very hard to scale. You know like just going out and trying to buy one by one by one and buying a hundred and twenty, a hundred and fifty, two hundred single family properties is a lot of work. That’s two hundred individual closings. That takes a lot of effort to make that happen. And you'll being honest with myself, I knew that those same efforts could have been multiplied like 10 x but by actually putting that effort into multifamily and that multifamily is much more efficient to operate. It could truly provide that cash flow and help me get back on top much faster than trying to go back into the single-family space. I didn't have an interest in the single-family. It was what I was taught at a young age and I rolled with it and I did really well with it. And then now, I felt more grown-up and it was time to make a big change in my life and I knew multifamily is going be it. And so I went on this exploration journey, knowing that it was going to be multifamily. What I wanted to do, James, I wanted to go back and talk to everyone. I went on a six-month binge of interviewing and talking to everyone I could, locally and on the phone, who have either been in the multifamily and made it through the crash and you'll just get a sense from them how things have changed today?  How the landscape has changed? I always spoke to those who just got their start. You know, what's their perceived notion of the next couple of years? What the lending environment look like? Where are they finding opportunities? Where was the risk? I just wanted to get an update because I basically stepped away for years from real estate. And things had changed over those three or four years, right? And during this period, I was introduced to a guy named Randy through a mutual friend. And Randy had mobile home parks here in Florida. He owned three of them. He had been a banker for thirty years and I like meeting new people. So, I said ‘let's grab lunch. You’re local to me. So, let's grab lunch.’ And we did. I didn't go there with the intent of like, ‘I want to learn about mobile home parks.’ I just wanted to meet someone new who had been quite successful in their life. And that after like a two-hour lunch with Randy I walked away, saying ‘I'm going to buy a mobile home park.’ I need to either prove or disprove all these great things that Randy had to say about this niche and this asset class. And that's what I did. It took me about 12 months.  I bought a park up in Atlanta. We still own it today. It was a small part of a highly distressed Park and I bought that one and then I bought a second one and I bought a third one. I just spent a couple of years of my own money proving the concept. And then ultimately once we proved the concept and went full cycle on a few things. I went out and actually built a business out of it.  Where we started hiring multiple team members and investors into the game and that's where we're at today. James: What were the top three ‘aha’ moments from that discussion with Randy in that one-hour lunch that you had with him? Kevin: Yeah, and this isn't to compare multifamily to mobile home parks. I mean, but this is what he told me. This is how his conversation went with me. He was like ‘You know, the bottom line being C class apartment complex is great. Everyone needs to roof over their head.’ Just like we talked about. Affordable housing is in high demand and that demand… James: And what year was this? Kevin: This is in 2011. James:  2011 which is supposed to be one of the lowest and best times to buy. I guess, right? Kevin: Yeah, absolutely. Absolutely and so he went on to say that one of the big challenges with multifamily that he found in his career, and he wasn't a multifamily guy but from a theoretical standpoint was the turnover and you're turning 50 to 60% of your tenant base every 12 to 18 months. In mobile home parks, he's like, ‘95% of our residents owner their homes and it costs a lot of money for them to move their homes.’ So typically what happens, Kevin, is if they want to sell that home or they want to go somewhere else move. They don't move their homes. They just put their home up for sale and they move and go buy a home somewhere else. And basically, you never lose that lot rent. That lot rent continues to come in day after day and you don't have that down period like you might have an apartment and you don't have to that make-ready costs like you might have an apartment. So, that was one of the big ones. Another big one that really piqued my interest was the just really the barrier to entry and that there's really no new supply coming in the marketplace. You know, municipalities don't like our asset class. It's got a bad stigma attached to it. And so, no new parks being built and so if you find a good quality park in a great market, you don't have to worry about competition coming down the road. It’s not going to happen. It's just not a chance of it happening. James: It's not like a straightaway somebody can just come and build something in front of you. Kevin: Right. Right. Exactly. So, that was a big one. I liked that and then another big thing that he sold me on was just the management side of things. You know when the residents own their own homes you're not maintaining the roof, you’re not maintaining their plumbing, you're not maintaining their electrical. You’re not maintaining anything whatsoever that happens to their unit. They just like a homeowner, they call that vendor. They call the HVC company. They call the roofer. They call the plumber to fix it. You're not in charge of that. Our only requirement is to maintain the infrastructure. So, the roads, the water and sewer lines leading to the houses and the electrical infrastructure and that's pretty much it. And so I was like, ‘Wow, that's interesting.’ So, like low turnover, fairly lower management responsibility and very rarely is there ever a point in time where you have a down unit or a lot that's not paying you rent. So, the fourth, you asked me for three but the fourth big thing that really sold me on it was He's like Kevin there's a lot of first- and second-generation park owners still out there. Either they built these parks or their father built these parks and now they're aging out. All of these parks were built in the 50s and 60s and 70s and these owners are getting very old. You know, like five years ago the statistics were that 85% of Park owners only owned one Park. And so, to me that means they're a mom and pop, right? They're not a big professional or institutional operator. And so, his point that he made was that these individuals have been working these parks not like you or  I, where we run them like a professional company,  but with their bare hands. They are working these things from day to day. And they're either getting old or their health is becoming an issue. They're getting tired and they're aging out of these things at a very fast rate. And so, there's the opportunity to get in and run it like a professional. You know, get markets up to the market rate in the area and run it more efficiently and do a better job of collections and whatever they might be doing wrong there. So, that was a big thing that piqued my interest as well is working through that ‘mom and pop’ generation and finding opportunities that had a lot of meat left on the bone. Those were the big ones he threw at me and many others as well. But those are some of the big ones that just really sold me. I was like, ‘I’ve got to learn more about this.’ James: Yeah, that's awesome. When I learned about mobile home park, I went for like some three-day class and I really learned it. I love it. I mean, it's a really good asset class and I didn't want to do it because I believe in focus. I mean sometimes as entrepreneurs, we are like, ‘Oh, mobile. Oh, that's so cool. The self-storage let's go do this.’ Kevin: Shiny objects. James: And I realized that to be really good at something you have to have focus. So, that's the one thing I wrote in my book, right? Whenever a passive investor chooses your sponsor make sure that your sponsors focusing maximum to asset class. There are so many details in this asset class but with this market being hard a jack of all trades can’t really make money. Kevin: True. James: Some of their mobile home parks are a bit small, right? I mean, it used to be like 3 million for like a hundred parks or something like that. So, we were like all in doing like large deals and we thought, ‘Okay, we're just going to stick with apartments and stay focus and make sure we get good at it.’ So, that's important, I think. And so, at a very high level can you explain how the cash flow is generated in a mobile home park? Kevin: Yeah, absolutely. It's pretty straightforward. You know, we own the entire community and in a perfect world, this is how we’d like to own the community, where we own zero of the home. So, let's just give an example: we have 149 space mobile home park in Buffalo, New York. In that community, we own zero of the homes that are in there. There are 140 of those lots that are occupied with residents. Who again, they own their roof above their head and they pay us on average $428 a month in lot rent. They also pay their water and sewer; you bill it back for the trash usage. So basically, our job in that community is to maintain the roads and make road improvements as necessary. We cut the common areas of the grass. We trim trees throughout the community. Just making sure that the community or the subdivision is up kept and their responsibility is to pay us for the renting of the lot that they're homes are sitting on. That's it. We make money in that manner. That is the sole source of our revenue. Now I’d say, ‘In a perfect world, we don't own the homes.’ Unfortunate, we're not in a perfect world, James, are we? So, we have our portfolio of approximately two thousand lots that we own and it changes every day. In somewhere between two hundred and fifty and two hundred and seventy of the mobile homes and some parks we own zero homes and in other parks around twenty. It just really depends on how that older owner who we bought it from was operating it. And so, our goal with those homes that we own is to get out of the ownership as fast as possible. And so, what that means to us is that we'll go in and we'll do a very nice builder-grade renovation on them. We’ll sure make everything is operating as it should and make them look good and ultimately try to sell them at a breakeven or we'll even lose money on the homes if we can find a cash buyer, who will come in and purchase. Who we know once they own it outright that they will be a very sticky resident and they'll end up staying there for a very, very long time. And so, our goal is really good to get it back to the lot rental model. Because at that point our management and our maintenance responsibilities are incredibly minimal. James: Yeah, let me try to summarize this for the audience. It’s like a parking lot for a car, right? But it’s Just a car that doesn't have a wheel to move. Kevin: We’re the home parking lot specialists. James: You make a lot of money, right? Because I just own the land, right. The earth is one of the best business on earth. Kevin: Yeah, that's a good way to put it. We are definitely a parking lot.  Except the homes are very expensive to move… I don't want to say that's a great thing about our resident base because that's not the best way to put it. But typically we cater to workforce housing. That's what we have. You know, so good hard-working blue-collar folks. And the average single-wide cost about 5-6000 to move and reset in another the community and a double-wide 10-12,000 and the average folks who live in our communities do the average do not have that type of money lying around to move their home but some of them. And so normally, like I said what happens is that they sell it. Just like you would sell a stick-built home. They put it up for sale and someone else buys it and that person comes in and takes over the lot rent responsibility. So, it's a beautiful thing. James: Yeah, it's a beautiful thing. So, just in terms of the lot itself are there any other issues with the city? Or do you just own the whole lot? Kevin: Issues with the city meaning…? James: So basically, you own the entire park. So, that whole thing is an SL real estate, right. Kevin: That's correct. James: The city doesn't own any of the things inside. Kevin: Sometimes, every park is a little different. We have a few communities where the main road going through it is owned by the town or the city and we own the park. So, they maintain that one road. We have other communities where the water company direct build the water and sewer lines. So, when that park was built the local municipality handled the water and sewer and they literally put the lines and they own them. And we're not responsible for water leaks or anything like that. In most communities, we own the lines but there are some communities that are just anomalies. They are kind of stand alones, where we don't have to maintain them. Every park is different but normally, we own everything. For the most part, we own everything in the park and we have to maintain it. James: So, do you get a lot of depreciation because you just own the land? Compared to like multifamily? Kevin: You do. You do. You know, we did a bunch of cost ex studies last year and we were actually pretty shocked. In fact, Tom Wheelwright from Rich Dad Advisors… I didn't know that he's good friends with the person who does our cost ex studies. He personally reached out to me because he had never looked at a study from a mobile home park before and she shared one of ours with him. And he's like, ‘You got to come to my show. I'm actually baffled at the amount of depreciation that you guys able to gain.’ So, the infrastructure… So, all the improvements in the land. Most of the value of that property because we're not buying the homes. Most of the value is in the improvements of the properties. Because a lot of our property that we're buying it’s not like a path of progress. I mean, the dirt itself isn't worth the money. It's the infrastructure that's there that is really worth the money. And so I don't want to just off the cuff share with you some of the cost ex studies but it's a fifteen-year depreciation schedule.  And I think we've been able to, on a couple of our deals, depreciate it like upwards of 60% of the actual purchase price within the first year. So pretty significant. James: [inaudible34:57] the bonus depreciation. Kevin: With the bonus depreciation. James:  Got it. Got it. So, is it fifteen years or is it similar to like twenty or fifteen? So, mobile home parks[inaudible], okay. That's something that I didn't know. That's very interesting, Okay. That's really good and what about what is the primary value at the mobile home park? Kevin: Yeah, there are a couple big ones. I kind of classify them as like low hanging fruit, middle hanging fruit and then the high hanging fruit. Which is hard to get to. The low hanging fruit for us are simple operational changes. You know, the heavy payroll. We will go in and…  they’ve basically got their family members and their cousins and their brothers on payroll and we'll go in and chop it down to what it really needs to be. That's very low hanging fruit for us. Some other low hanging fruit for us are just your rent increases. There have been many communities that we have purchased that literally have not had a rent increase in fifteen years or twenty years that’s a long, long time. And so that's very low hanging fruit. Medium hanging fruit to us would be controlling the water and water sewer and other utility expenses. So, a lot of these parks when they were built back in, back in the day, water and sewer weren’t expensive utilities. They just weren't. It was included and was factored into the lot rent. You know, the infrastructure was new back then. So, there weren't leaks or wasn't waste or anything like that. Over time the infrastructure gets older and leaks that happen. People tend to abuse water. Water and sewer are expensive in most parts of the country. And that's normally a very large line on the PNL expense statement. And so, we'll go and we'll basically buy individual water sub-meters. They’re pretty advanced meters that are digital and have remote reads. And then we will install them to a lot and will essentially start building the residents back for their own usage. Proportionately speaking we will do the reads each and every month build them back. So, number one: we'll save anywhere from 20% to 40% of usage because people now get responsible very quickly when have to pay for it. And then they'll all those savings basically good to our bottom line. So, it costs us a little bit of money but typically in a normal-sized Park, we will recoup that entire investment of the water meters within like 12-14 months. It's pretty quick. And then the high hanging fruit of the value-add side is infilling of new homes on to vacant lots and so a lot of communities that we own they might have some vacant lots of them. Some more than others. So, I'll give an example: we buy a mobile home parks 100 lots in size. It's got eighty that are occupied with trailers that are paying. The other twenty they were fully developed when the park was built. They've got infrastructure there. However, they do not have a mobile home sitting on them. We've got dealers license in every state that we own a park in and so we can buy wholesale from the retailers and the manufacturers. And we’ll go buy brand new home inventory and we'll bring it in and will basically create a retail program and find buyers for those homes to infill those lots. So, we'll buy the homes. We’ll bring them in. So, I say that's high hanging fruit because it's very capital intensive. It costs money to purchase a home and that money is tied up until you sell that home. So, there are different programs out there that help you to facilitate that but it's still very capital intensive. And there are a lot of logistics involved with moving homes in and setting them up and things like that. So, those are the big ones of how we add value to communities. James: Got it. Got it and I believe the mobile home park homeowners compared to multifamily which are renters, right? So, it’s a completely different mindset when it comes to pride of ownership. Kevin: That's it. That's it. That's why we try to convert them to a homeowner as fast as possible. I mean, you still have your homeowners who you have to kind of kick in the butt every once in a while, to keep your house in order, to keep the yard in order. We’re pretty strict with our screening processes and for the most part, the homeowners within our communities have pride of ownership and take care of their units quite well. James: Got it. Got it. Got it. So, let's go back to the property management side of it. Because I remember when I was listening to your podcast about five years ago, you were always saying or the apartment guys had it easy. Because they have their own property management. They are more professional. Finally, after five years you are going to be moving your property management company under yourself.  You going to self-manage, right?   James: Yeah. So, you guys do have it easy. All you have to do is pay it and just hand it off. Buy it and... Yeah, joking. I know there's more to it than that. So, up until a little over a year ago, we managed all our own assets in house. And unfortunately, the property management side of any business there's a certain size to where you can actually break even and we were nowhere near that size. And so, it was a losing endeavor for us. And so, sometime in the middle of last year we were introduced to a property management firm…. we’d never considered property management in the mobile home park space. Only because we were always told that the options of the companies that were out there were poor, very poor. And I was told so by many different people, many different veterans of the industry and so we never really explored it. And so, we always manage it ourselves but last year we were in contract to buy a property up in Michigan. It was in receivership and the bank had engaged this management company, a national management company, a property management company that were mobile home park experts in the business forty years. They were engaged to actually manage the day to day of this thing while it was in receivership. We were buying a note on this thing and we got introduced to this property management company. We got to see them in the real world. James: [barking] My dog has been like a... Alright, Kevin. So, one thing that I got to know since a long time ago is apartments have an easy way of getting into third party property management and buying it and giving it to third party property management. More recently, you have been trying to get your own property management company or maybe you already done it. So, can you explain why that is? Kevin: Yeah. Yeah. So, in our space it is not the norm to hand off to a third-party management company. I think we're like the redheaded stepchild or the anomaly of the real estate industry. Because pretty much every other asset class multifamily, office, retail, all of them have multinational property management companies and lots to choose from, right. They can choose from many different people in the space, best in class things of that nature. I had always been told in the mobile home park space by many industry veterans that it just doesn't exist here that there are only a handful of property management companies and most of them aren't very good. So basically, in the initial years of us owning parks, we managed it ourselves. However, in order to build an appropriate property management company that's profitable, you have to have a certain scale and we were never there two years ago. We just weren't large enough. And so, it was kind of a losing endeavour for us. We're okay with it. But it was prohibiting our ability to grow at the scale that we wanted to. We were good at finding great opportunities and we were good at raising capital. The roadblock was actually the operations of all these different parks were buying.   And so just by happenstance, we were buying a note on a distressed property up in Michigan and it was in receivership. And during that transaction, we got introduced to the management company that was running the show and it was this large group. They've been in this space for 40 years. They are the largest fee manager in our business and they've had a footprint nationwide. And I saw them first-hand and it seemed like they were doing a great job within the first couple of months of us being introduced to them and of them managing this asset that was not yet ours. And so, I flew up and met their team and flew my team up to meet their team. I got to see their operations. I got to learn about them and everything seemed great. I mean, I was impressed. Again, they had a lot of experience… way more experienced than us in this business. They knew everyone in the industry. They knew all the intricacies of the business. They had different departments to manage those things whereas we were basically were trying to wear a million different hats. And it seemed like a perfect match made in heaven. And so, after another month or two of kind of testing them out on this asset. We were buying this and we said ‘You know, let's hand them the majority of our properties and let's see how they do.’ And we kind of did it like two different chunks. And long story short, they're great guys. However, no one's going to ever manage your property like you would. No one's ever going to care as much as you do. And so within four or five months, we started seeing some pretty readily available signs that things were not going as planned. The promises weren't coming true. You know, decisions that should have taken three minutes to make were taking three months to make. Everything was moving like a snail's pace and nothing was getting done and we were actually regressing and it was frustrating. However, what happened during these first six months of us being with them is that we literally acquired like another nine properties. So, we doubled in size. So, unfortunately, it wasn't as easy as us making a decision saying, ‘Hey, we're going to give you our thirty-day notice and we're going to take it back in house.’ Because we surely did not have the infrastructure now to actually manage our assets because we literally doubled in size in a short period of time. And so over the last six months, we've been kind of behind the scenes building out a legitimate property management company with systems and processes and in hiring new team members. We didn't want to bring it back in and fumble. We want to make sure that we brought it back in, we basically built our own best in class operation that we could do it better than anyone else. Whether it be for ourselves or current assets or new assets that we were buying. If we woke up one day and we ended up going crazy. We thought that we wanted to do a third-party management for other people that we would be best in class. I don't think that's going to happen. But that's what we've done over the last five or six months and that's actually side-tracked some of our acquisitions we've only bought two properties this year. We probably could have bought a lot more but anyway I guess long story short, James, is I'm somewhat envious of you guys in the multifamily space. Because there's a bar that set with property management companies and if one company is doing poorly you’ve got other options to go to and typically they kind of keep each other in line a lot of times. And I know that they’re still never going to treat your property like you would yourself personally. However, You've got options and things that might not be working with one company you know that you could probably actually go and get served correctly at another company. We just didn't have that option. We just didn’t have that option. This was the once and done. There were other companies out there but these are the best in class and I'm like, ‘If these are the best in class, we got to build our own. Because there are other options for us.’ That's what we did. We brought it back and so that just happened on November 1st. That’s when we actually truly brought everything that had migrated back in was November 1st. So as of the time of this recording, it was like six weeks ago. James:  Got it. Got it. So yeah, it's a different ballgame, right?  of course, it's going to slow down in terms of acquisitions because now you're also managing the property management. But I think overall, in the long run, it’s much better for you. Right? Kevin: Absolutely, at the end of the day the amazing strides that we've made just in the construction side of our business and the marketing side of our business as far as like sales are concerned…like we've done more in the past two months then was completed in the past year. I'm not even joking. It's been absolutely amazing. So, I'm excited. I’m like, ‘Hey if I'm going to screw up, I want it to be my fault. I don't want it to be someone else's fault that our properties aren't performing.’ I'm okay taking accountability if they're not performing if it's me that's running the ship or driving the ship, right? But if it's another company and they're doing a poor job and we can't control it. I've got issues with that. So, that's kind of where we're at. James:  And I also think that when the market turns people with their own vertical integration will have a lot more leverage in terms of control, right? I mean a lot of property management companies are doing a mediocre job right now but they escape because the markets are super strong right now. Kevin: That's right. The market props everything up. James:  When the market turns then we will know how good they are. Because now we have to be answerable to our investors and we have to go to third party. So, one other thing that I want to touch on about the way you do business a lot of times you raise money and not deal by deal but you use fund model. Can you explain what's a ‘fund model’? And why is that beneficial? Kevin: Yeah, to keep it somewhat simple… I mean, it's really not much different than your deal-specific syndications other than the fact that we've got multiple properties that we're putting underneath that fund umbrella versus just one individual property. So, an investor is going to get their investment diversified amongst multiple properties and possibly multiple different markets rather than just one. So, simply put that really is the only true difference between probably how our business operates and how your business operates. The reason that we decided to go that route happened about three years ago…We were going into the end of the year and we had just founded Sunrise Capital Investors. As like a formal company, rather than just me and buying parks on my own. And we had a pretty stout pipeline and a lot of deals kind of fell apart. And we were like, ‘Oh, we only have two deals now. They're going to either going to close January or February next year. This is due to individual deal-specific raises.’ That's fine. And then all sudden like within like two weeks somehow all these other deals came back to life and we all of a sudden had five deals that absolutely looked like they're going to close. We had like four to five money that went hard and anyway we're like, ‘Okay, well now we have five and they're all going to end up dropping like in the same like week or two. Logistically speaking, it'd be an absolute nightmare to try to do five deals specific syndications. Because of the paperwork and logistics behind it and then the legal costs associated with it and that just didn’t make any sense.’ They're going to close right at the same time.  I think there's more of a benefit for our investors to give them diversification amongst all five of these versus just one. You know, one individually. And so we didn't know what the feedback was going to be and we put it out there and it was well-received. So, it was great for us. It gave us a little bit more flexibility on the buying side. Gave them risk diversification amongst multiple different assets and markets and so it's been a win. So, we did really well with that. That was kind of our test fund and you're last, actually about eighteen months ago, we launched our second Fund. Which is a little bit larger fund twenty-million-dollar fund and it did the same thing. So you know, we're a little different, though.  A lot of funds… a lot of institutional funds will go out and they'll get really aggressive. They'll raise all the money. Let's say it's 100-million-dollar fund to go out and raise I'll spend all their time and energy raising 100 million dollars. And once they've got the commitments for, let's say, maybe 75% or maybe more than that. Then they'll actually start going to buy it. You know, once that money's there and the costs of capital is very high. We didn't want the money sitting around idle. And so, we just continued our building our pipeline and we would only bring money in tranches. So, we'd only bring enough in during that fundraising that we actually knew we're going to need or the next like two months to close deals. So, although it was an eighteen-month buying period over the last fund, we would raise it in tranches. Which meant our investor capitalism is sitting around idle, not collecting a return. We weren't occurring pref on money on millions of dollars that were sitting being around idle. And it just held us accountable and it held everyone accountable which I like. Our interests were very much aligned with one another. James:  So, you basically do capital calls whenever you need the money.  Kevin: That’s it. That's it. James:  These are good capital calls, not the other bad capital calls.  Kevin: Right. Exactly. Like the verbal soft commitments are there. And some of them might not come through but the majority of them do.  You know, I think about 5% drop out of folks. James:  So, you basically make a verbal commitment. And when you have a deal, you say now let's make it hard. Kevin: Yeah, absolutely and each one of these two funds that we started, we actually already had deals and contract going into them. So, it wasn't like we were raising a blind pool like, ‘Oh, here's what we're going to do. We're going to raise this much money, and then we're going to buy.’ It's like we got X amount of properties in contract right now. So, while there might be more properties in this fund, you can physically see and see the performers in each one of these. These are going to be properties that are in this fund. So, there's something tangible there. That's another thing so different about us and how we do these funds. We don't go into it blind. Where we're just raising money and then we're going to go do what we say we're going to do. We're actually doing it simultaneously but we've got deals coming in. We've got deals in contract money hard--- James: ‘Semi blind’ I would call it. Kevin: Call it ‘semi-blind.’ That's a perfect way to put it. It sounds like a rock band. James:  Right, right. Right. Alright, Kevin, can you give some advice to people who are trying to start up in this business in real estate or even in mobile home park? Kevin: Yeah. Yeah. Trying to get started up I'd say go try to mute a little bit of social media because everyone's on social media now, but I’d try to mute a little bit of that and go find the one individual girl or gal who is actually doing what you want to do. They can prove to you that they're doing what you want to do.  They're an actual GP. They're not they don't have five thousand units of very minimal shares as an LP and they're touting that. I know that's happening a lot out there. So, you know try to mute all that crap because I know it gives people anxiety. You know, like social media gives people anxiety because they see how everyone else is doing deals and ‘I’m like stuck here I can't get going.’ Just try to mute it out. Silence it and go find the James. Find guys like me.  We're very good with our time. We’re not going to just give everything away for free per se. We only have like so much time today but like find an authentic individual like us,  I don’t want to tout ourselves here, who will actually like give you some real advice that can give you some proper guidance or at least give you some nuggets get on your way and let all that other noise go. Because I think that that that that bottlenecks people a lot. That fear of missing out man. That anxiety creates just this internal turmoil of like, ‘I'm missing out’ and then like you get nothing done right. You’re like, ‘I'm going all these conferences and I'm reading all these books. I'm doing all these things.’ And you feel like a… James:  And you pay big money to some gurus out there. Kevin: Yeah and I think that a lot of folks’ mistake that with like productivity of …attending things like that. It's great. I do it all the time. You do it obviously. We're part of a mastermind together. But like you've actually got to like at some point get granular and you actually have to take some risk and take that leap. It's easier to do when you know someone like you or someone like me or there are other people like us. That one person who you can just kind of lean on and get some general advice from and get the real picture from as well. You know, what's real and what's not.  James:  Absolutely, absolutely. Kevin, why do you do what you do? Kevin: Why I do what I do? I really enjoy it as far as investing in real estate, I really enjoy it. I mean, I love the people I work with. I love our team here. I really enjoy being active and so everyone likes different parts of the deal like as far as what I do I'm not an Excel junkie. Not like my other partner he'll sit in from an Excel platform and run the model many different ways over like five hours. I want to shoot myself when I think of that. I'd rather be out in the field, I like executing on the plan. I like taking something from what it is today and actually seeing the end result of our hard work and effort over a period of six to twelve to eighteen, twenty-four months. And I also like seeing the smiles on the faces of residents. When we take something that's been blighted and actually make improvements to it. Especially folks who have lived there for many years. That's pretty rewarding to be seeing that kind of stuff. Especially, you get the one residence like, ‘God, I’ve been in for twenty years and this place over the last ten years was just scary and I didn't want my family to come over. Now, I have dreamt of the day that it will be the back to its former glory.’ And I like that kind of stuff. So, I like the lifestyle that that real estate provides, right? I get to spend a lot of time with my wife and my kids and friends and family and things like that. James:  Absolutely and was there any proud moment towards your real estate career that you can never forget? That will stay with you.  Is there one proud moment that you were like I’m so proud of myself. Kevin: Yeah, actually there is one. It was the very first mobile home park that we bought. If you got time, I'll tell the story. It's probably two- or three-minutes story but anyway, I'll try to keep it short. We were buying a very, very distressed park in Atlanta, Georgia. It was in a good little town but it was in the southern part of Atlanta. Which was got hit really hard with the recession and was slower to recover because there were a lot of the new developments that were out that way.  Anyway, we're buying this park that had been receivership for two years. It was fairly poor condition. Lots of squatters, all kinds of bad stuff happening there. The chief of police and the mayor's office were right across the street like a catty-corner. They had to drive past this place every day and we got it tied up and it was a small enough town and corporate town that we actually got a meeting with the mayor and this entire city council including the chief and everyone. And we went in there with his grand plan of how we're going to literally spend hundreds of thousands of dollars to clean this place up and to improve it and make it a proud part of their community.  And we gave this big sales pitch to the mayor's like this really tall guy with a bald head and the handlebar mustache. He is a really mean looking guy and this was in Georgia. He had like a rifle on the wall and a fox. He was a  very intimidating guy but he let us talk. Everyone's kind of looking like shaking their heads. I thought we were like getting their acceptance and he let us talk for fifteen minutes and then he looked at us and he said, ‘If you guys buy that park, you're wasting your money.  Get out of my town. I've been trying to shut that thing down for years now and I'm not going to stop until it's completely closed down. So get the hell out of here. Take your money somewhere else.’ So, we walked out of that room and we and I looked at my partner I said, ‘What do you think we should do?’ Because we weren't getting financing, we were paying all cash for this thing, too. Because it wasn't financialable. So, it was like basically all the money we had at that point. We bought it anyway. ‘So, let's buy it. I mean what are they going to do? Listen, let's just show them what we're going to do. I mean, how are they going to truly stop us, right? Let's do what We're going to do. We know we're going to clean the place up. He doesn't believe us but let's prove them wrong.’ We did that cleaned it up. We became really good friends with code enforcement officer that's kind of that was our like our foot in. We got her gift cards and made her like us and it was a very very open with our communication to her. So, if there was ever an issue, we addressed it right away.  Anyway, twelve months later I got a call from Mayor Bobby Carter's that his name and we got a call from him and I answered I didn’t know it him and he said, ‘This is a Mr. Bobby Carter.’ He has a southern accent. He said, ‘I just want to take a moment to apologize. I want to apologize for the way I treated you guys. I want to apologize for thinking that you wouldn't be able to execute on the beautiful plan that you have done over here.’ It was a long apology and he's like, ‘I just want to take a moment today. I've been meaning to call you over the last six months as I've seen progress being made but it's a year later and this place is great and actually, one of my staff members lives there.’ James:  He was holding it off until he had to tell you. Kevin: That was pretty cool. He literally wrote me a letter then he wrote a letter of recommendation to another Mayor who we were having an issue within another state in another town. Basically, saying like, ‘I thought mobile home parks were the problem. I thought this and the other and that's not the case. And these guys proved me wrong.’ And that's pretty cool. I'm pretty proud of that one. James:  Yeah. It's a big change especially with one of your first ones.  Kevin: He was the very first one. James:  You must have been really scared. I like how come the is not behind your back. Kevin: Well, we could lose that money either. I didn't have much at that point. In 2012, I was pretty broke back then. So, I had to make the money work. James:  That must be the fuel that launched your rocket and your motivation I guess. Kevin: Yeah, that's it. James:   So, why don't you tell our audience how to get a hold of you and your company? Kevin: Yeah, the best place to reach me personally is my website, Kevin Bob. You can find me on LinkedIn and Facebook as well. As far as our company if you want to learn what we're doing in the mobile home park space, you go to sunrisecapitalinvestors.com and get signed up there as well. We don't have an offering open today but get signed up. We have a secure portal and get updates from us when you know we have deals coming about and things of that nature. But other than I'm not too hard to track down. So, it’s pretty easy to find me on iTunes. I've got a couple of podcasts as we've mentioned earlier. You can find me in many different places. And now you can also find me on Jame’s show. James:  Yeah. So, thanks for coming. It was an awesome podcast. It was a lot of value that you gave us and I'm happy to have you on my show. Kevin: Thank you. Thanks for having me, James. And it's been a pleasure knowing you. I appreciate all you do with the podcast. I know how much work it is to put these things out. So, thank you for taking the time to get back to everyone. So much appreciated.  

James: Hi audience and listeners, this is James Kandasamy from Achieve Wealth True Value-add Real Estate Investing Podcast. Last week, we had Scott Hendricks who is a wealth manager and he covered a whole slew of topics ranging from 1031, being a broker-dealer, how someone can be a broker-dealer to raise money legally. He also covered DSTs - Delaware Statutory Trust and some of the items of Opportunity Zone. So it was a very, very interesting topic where I learned a lot and I'm sure if you go back and listen to that, it's going to be very, very educational as well. Today I have Yonah Weiss from a medicine spec. Yonah is a business director and a medicine specs. She is focused on a lot of things but primarily Yonah focuses on cost segregation and bonus depreciation, which gives us a huge tax benefit for a lot of commercial asset class investors. Hey, Yonah, welcome to the show. Yonah: Thank you very much, James, for having me. It's a pleasure to be on your show. I love your show. It's one of the most, I'd say, one of the highest quality podcasts in the industry. James: Absolutely. Absolutely. I mean, I've been doing this for the past six to eight months and recently, I don't know it, it's a surprise to me as well that, you know, one of the I think radio public they selected this show as one of the top 24 shows for real estate investing in 2019 which is a very big surprise for me. So I'm happy that people are finding value in this podcast and I'm learning as well. So, Yonah, you have been in a lot of podcasts in many, many podcasts so I definitely want to cover cost segregation, bonus depreciation, but I want to go a lot deeper into a lot of other aspects of your personal growth and of the tax code itself. So hope you're ready for this. Yonah: Let's do it. James: Okay. Awesome. Awesome. So at a very high level, can you define depreciation? Yonah: Depreciation, in fact, usually means something going down in value. But for our intents and purposes, because we're talking real estate here, it's actually just a borrowed term. It's a tax deduction. It's a tax write off based on the fact, on the principle, that things go down in value as time goes on. So the IRS gives you, as a property owner, a tax write off of the entire value of your property over a certain number of years and that write off is called depreciation. James: Okay, got it. Got it. So it becomes much sweeter when the depreciation is just a paper loss, rather than actually losing the value of the building. Yonah: Exactly, exactly. So it's different from, an appraisal standpoint, you know, an appraiser might look at the property and be like, it actually has a lesser value because it is this many years old. So that's the difference when we're just talking kind of theoretical. James: Got it. So clarify me if I'm wrong. Only in the US, we get depreciation for a property that already been built and used for like 20-30 years. When someone buys it again, he gets a fresh depreciation start. Is that right? I mean, all other countries are like if you build new, they consider it getting old and it's depreciating. Is that true? Yonah: Right. Yeah. I mean, I can't say for sure because I'm not really well versed in every other country's tax laws. But yeah, the US tax code is based on, even if it's a used property, you can actually take the tax write off, which is actually interesting because a lot of people don't know this. You can actually use depreciation on properties in other countries if you're a US taxpayer. So if you own, let's say, a large property in India or wherever and you're paying us taxes, you can actually take the depreciation deductions from that property on foreign soil. It's a very little known fact, but it has to go on a different schedule. It's called the ADS, the Alternative Depreciation Schedule, which is a little longer instead of 27 years, it's 40 years. But yeah, that is something unique as well. James: Oh, I think that's probably a new fact for a lot of people because a lot of people have properties in other countries. So, do you know the details on how do you get the depreciation or you just have to work with a CPA and some tax consultant or how is that? Yonah: Yeah, I mean like all of your depreciation, it should go on your schedule with listing the property and then it just has to be filed on a different schedule. Meaning it's like I said, it's called the alternative depreciation schedule instead of the regular, which is called the modified adjusted, the regular schedule and the macro schedule, which we go on for most things like 27 and a half years for a residential, 39 for commercial. So it's important to just note that and work with the CPA, who knows how to do that because yeah, you can get extra tax deductions. James: And is this depreciation only for a brick and mortar assets? Is there any other assets? Like if I buy a goal, if I buy, I mean land, of course, there's no depreciation, right? There are only for buildings, which is a true brick and mortar. Is there any other investment vehicle that has depreciation other than real estate, which is the brick and mortar? Yonah: Well, there are other types of properties like equipment and things like that that maybe commercial owners might have, which have depreciation deductions. It's different than the regular depreciation, which we discussed in real estate. It's under a different code. The 179 deductions, which you know, will apply to a lot of commercial equipment and stuff like that that you can use that deduction to write off business equipment and things like that. Or even if you know large, you know, software, you know, any type of business, an asset that you're buying is not necessarily property that can be deducted and depreciated. James: Got it, got it. So, yeah, that's very interesting because depreciation is one of the most powerful word for real estate investing. I mean, compared to stocks and bonds and, you know, buying a goal. I mean real estate is something that, you know, this has been created by the tax code to say that....do you know why they do that? Is it because all the people in Congress invest in real estate that's why they kept depreciation as it is? Yonah: That's my theory. James: Thanks for being honest. Yonah: It hasn't been corroborated, I haven't done any independent studies or anything like that, but yeah. You know, it makes sense to me. It sounds like even a little corrupt just like speaking about it, but you know, somebody would like to say, cause it adds to the economy, like real estate, the businesses, you're going to be adding jobs and housing and et cetera, et cetera. But yeah, at the end of the day, you know, keeping the rich richer is something that the government has an interest in. James: So, yeah. I mean, this is one of the secrets that when I was working W2 and I didn't know about it and I didn't know how much, you know, it impacts your savings, your tax savings. Right? So it becomes a huge fact if you're able to depreciate to get some tax savings in and it's all on paper. There's no real stuff that's being depreciated. And real estate is a huge beneficiary of this depreciation, right? Yonah: Exactly. James: So what is the reason why land can't be depreciated? Yonah: So I guess because land never really goes away. And land is kind of a constant status. So, you know, you buy a property and the property...see, it's interesting, this schedule that the IRS set up, that all stuff and we're going to talk about cost segregation, breaking those things down into different categories and different schedules. You know, each type of asset has a different lifespan. And there are so many different categories, right? So you have stuff that fits into a 39-year category, stuff that fits into a 27 and a half your category, you have 20 years, 15 years, you know, 10 years, seven-year and all of these different things. And there are lists, you know, in each one of these categories, the land is the one thing that's constant that you know, it's always going to have value regardless. And when you buy a property, even the tax assessor, the county assessors are going to understand that you're buying land and you're buying the improvements on that land. And the improvements can include, buildings, it can include landscaping, it can include the personal property that we're going to break down further with a cost SEG. But yeah, land is just one of those constants that don't change. You can't write that off. James: Okay. Okay. I'm just thinking about whether... I mean maybe people don't like land. Maybe the people in Congress don't like land. That's why they say, okay, forget about land, let's go and do the building. Yonah: Maybe it's also because I mean if you think about it, the fact that we're paying property tax on our land is really an admission to the fact that the County really owns the land. Meaning we're really just renting the land in a way. Even though you own a property and you own that and you have the title to that property, but how can the County like tax you on it? Because you know, at the end of the day it's still part of that County, right? It's still part of that governance. And so maybe that's why you don't actually get the tax write off for something that, you know, in all intents and purposes is only being kind of lease from you. James: Got it. Makes sense. Usually, have, when I look at the County records and we land and implement improvements, the building is on top of the land, right? So usually - I don't know, I'm so well-well-versed with Texas, I'm not sure about other States - but usually, it's like 80 or 90% is the building and 10% to 20% is the land. Is that generic across all the States? Yonah: I'd say it's pretty average. Like meaning the national average. However, there are places where the land is going to be valued at a much higher level. For example, California is crazy. I mean the land values in California, I've seen up to 60% like literally, which is crazy. So obviously, the more the land value is, the less the improvements made, the less you can actually depreciate if you're basing that ratio. So yeah, so in certain cities like New York City also, like sometimes the land value is going to be higher, just because like that land is worth a lot more. James: Oh, it's worth a lot more and you can't depreciate, which is the absolute reason why everybody should invest in Texas and Florida at mid-city, not in the coastal side of it because the land is more expensive and they don't really give any depreciation schedule. That's a really good point. I never really thought about that. So yeah, that's another reason why, you know, people should be investing in places where the land is more expensive. I mean it's like 50% right off the hole. Okay. Interesting. So coming back to, you know, can you define how does depreciation gives a tax benefit for an investor in real estate? Yonah: So again, depreciation is a write off, right? Income tax, write off. Income tax write off means if you make $100,000, normally you're going to be taxed on that $100,000. If your tax rate is, you know, 39%, you've got to pay $39,000 to the government. Depreciation is the deduction so also, you know, if you have kids, there are all sorts of deductions that you can take. But depreciation is just a deduction right off the top. So let's say your depreciation deduction from your property is $50,000. So guess what? That's you just cut your income tax liability in half. So now you're only going to have to pay taxes on the 50,000 because 50,000 was your deduction. If you took that off your income tax liability, you're left with 50,000 to pay tax on, you're going to only have to pay 19 and a half instead of 39. James: Got it. So I mean, for the audience who's listening, I mean, in real estate you know, I mean in general, in investment real estate, there are two worlds; one is the investment world and the other one's the tax world. So whatever we are talking right now is what happens in the tax world, right? In the investment world, of course, you get the cash flow and you're going to spend it, right? It's like normal. You're not losing money, right? Whereas the tax world, the IRS tax code is meant to incentivize a lot of real estate investors. So they do this virtual depreciation, which is basically you're not really losing money, but they're saying you're losing money on paper and they say you are basically not paying taxes for that income. Yonah: Right, right. Which is crazy. In my opinion, this is probably one of the craziest rules in the tax code. To trump that - not to use any puns or anything like that - To trump that rule is the real estate professional status. Which is crazy. I mean, these rules are just, they're made for the wealthy. James: The ones who invest in real estate, I would say. Right. So let's go back to a lot more details into this depreciation, which is getting a write off on a yearly basis. And so, whatever cash flow we get, let's say your depreciation's more than cash flow, you're basically not paying taxes on it. Yonah: Exactly. Exactly. And that's really going to be the goal. And that's one of the things that cost segregation, right? And the bonus depreciation especially can help to accomplish that. Whatever cashflow that you have, whatever income that you're making, it's, hopefully, going to be tax-free income. James: So however, I mean on every year you're taking depreciation but when you sell, you're still doing a depreciation recapture. So can you explain to me how this whole, whatever you took in the past, let's say five years, you're recapturing it back on a sale? Was the whole benefit was just pushed to the sale or what happened? Yonah: All right, so a few things happen when you sell property. Number one thing happens, there's capital gains tax, which means if you made a profit on that sale, right? You bought it for a hundred, sold it for 200 you got a gain. You have to pay tax on that gain. There's also something called depreciation recapture tax. Okay. And again, this is tax, it's not recapturing and you're not paying back, you're just being taxed on the amount of depreciation that you took over the course of ownership. So there are different rates at which that depreciation recapture is taxed at. One rate is commonly capped at 25%. That's like at the capital gains rate, which is for real property, which is for the real estate. However, there is another rate which is going to be taxed at ordinary income rates, which is on a personal property, which is stuff that we're taking with the cost of depreciation but a lot of people don't think about and it's actually taxed at a higher rate and you're taking it more upfront. What ended up happening is, just to break it down very simply, we're taking huge deductions in their early years of ownership so that we're basically tax-free. Yes, that does mean that when it comes time to sell, we're going to get hit with tax on the backend. But in the interim, in that meantime, from the time you bought it until the time you sold it, hopefully, all of that money you're keeping cash-free and assume it's tax-free, that cash is now worth a lot more. This is called the time value of money. It's worth a lot more because you can now use it, you can reinvest it, you can make more compound interest on that money then having to pay it later on. Also, it's your money. So there's this kind of misconception - I'm just going to digress here for a second. I'll come back to the depreciation recapture tax. There's a misconception that you have to pay taxes. And I think this comes to us from being in the corporate world where we get our paycheck and taxes are automatically deducted as if it's not our money. So real estate is a way that we're making money, all that cash flow, but we're not taking off the top to give to Uncle Sam. We're keeping as much as we can because it's your money. It's not money you have to pay tax on. You only have to pay tax when you have that tax liability. When you have to pay. But if you have more deductions then it's your money to keep. Yes. So part of the real strategy, real estate is kind of differing, pushing off to a later date. And one of the reasons why that is is because there are other strategies down the road that can help to negate that taxes as well. So it's better to pay fewer taxes now and deal with it later because later on, you may have other strategies on sale that you wouldn't have had now upfront. And one of those things is a 1031 exchange, which you can now defer capital gains tax and you can differ the depreciation recapture tax also. There's another strategy that is less known but probably more powerful than a 1031 exchange. And this is called the partial asset disposition, which allows you to claim a lesser value on property that you dispose of because it has less value than it did when you bought it. Okay. Which means like this, if I bought a property for...and it comes in specifically with personal property. So your furniture; let's say you buy this table, this desk I'm sitting at, it costs $10,000. Now, I bought it for $10,000 in five years from now if I'm depreciating it, on a five-year schedule and with cost segregation, then really this has zero tax value. It's no longer, on paper, it's no longer worth anything, right, James? James: Yep, absolutely. Yonah: When I sell this table with this desk, I can actually write on a tax form that I am disposing of this personal property. It no longer has value to me. Maybe it has $100, something minimal, just nominal. Now I only pay the depreciation recapture tax on what's left on the remaining $100 value. So again, this only can happen when you're selling a property. This is only something or you're disposing of it. If you also renovate it, you can write that off also. But this only happens....understand that this is a strategy that we can only take later on. James: Oh, okay. So what you're saying is even though you have depreciated 100% on top of like taking like 25% of that 100% at sale, now instead of paying 25% recapture, maybe the recapture amount as much lower because some of the things you can say, Hey, this is completely useless right now. Yonah: Even though it's not. But from a tax perspective, it is because you've depreciated it. It's already been used now. So that means even on the depreciation recapture tax at a later date can actually be pushed off. I'll mention another great strategy, which is if you're a real estate professional and now you can use your depreciation or your losses to offset your active income as well. Once you've offset that active income, you can now use that to offset other taxes like capital gains tax or depreciation recapture tax. So for goodness sakes, if you have huge losses from this property and then you go and sell the property, guess what? You may actually be able to negate all of the tax that would have come from the losses themselves. James: Absolutely. I mean that's what we do, right? So as an elected professional, right. And that's what most of the people who are doing a large real estate transaction, including a lot of people in Congress, is doing. It's all meant to reduce their taxes or pay no taxes or defer it for later on time. But I want to understand one thing, I want to understand one thing. So at a sale, from what I know, you have to do a 25% recapture. But you say that 25% recapture that's also another part of the recapture, which is at a different rate level. Can you explain what is the 25% recapture and what is the other part and how do you split within these two? Yonah: Yeah, without getting too complicated, because there are actually different, there's like sliding scales and there are different rates involved. But generally speaking, there's what's called the unrealized gain, the depreciation recapture on the property itself, which you haven't appreciated and so that's on a 25%. And then you have personal property, which is on the ordinary income rate. James: Okay. And when you talk about personal property, can you give some examples of what does that personal property...like say for an apartment, in a multifamily building. Yonah: Right. So, again, if you're doing cost segregation, basically anything that you're segregating out you know, most of that stuff falls into the personal property category. So, you know, cabinets, carpeting, fixtures, appliances, all that stuff. James: Oh, got it. Got it. So, okay, we're going to go to cost segregation, then hopefully, it will be more clear. So all these times we only talk about depreciation, which is fundamental things in the whole tax incentive for real estate, right? So now, comes what you call the B grade, I guess. Right? And earlier we were like at a C grade, now we're at the B grade and we're going to go to the A-grade, which is bonus depreciation. Let's talk about B grade. What is cost segregation and how does it fall on top of depreciation? Yonah: Oh yeah. It's not really on top of, what it's doing is separating out the property into these different lives. So if we go back to our original example, the depreciation you're getting, you're able to write off the entire value of the building over a 27 and a half year span for apartments. For other commercials, it's on a 39-year schedule. That means you buy a property for $1 million, you can now write off, subtract some for land, 10%, 20% for land, and then the remaining $800-900,000, you can now write off as a tax, write off a paper loss a little bit every single year. Cost segregation allows, according to the tax code, you can have an engineer come to the property and actually allocate every tiny detail of that property into different categories which depreciate on faster scales, on faster rates. So you have stuff that depreciates on a five-year schedule, as I mentioned, all that personal property, furniture, fixtures, appliances, carpet and cabinets, all that stuff; if you put on a five year schedule, that means that you can literally take and write that entire value off, take as a tax deduction in those first five years instead of lumping it all together. With the entire million dollars, you're going to take 20%, let's say $200,000 and now, take that as a write off in the first five years. James: Got it. Got it. So just to give some education for the audience. So depreciation on real estate, especially on residential real estate is usually it goes across 27.5 years. And then what you're saying, cost segregation, they say, Oh, not everything in this building is 27.5 now we have windows, we have appliances, we have carpet, which we want to depreciate, for example, in five years. Then that's driveway where they say, Oh, it's seven-year depreciation. And then I can't remember what's the 15 years, can you give me some examples? Yonah: Right. 15 years is going to be anything that's considered land improvements. And land improvements includes landscaping, asphalt, parking lots, anything outside of the property that's not considered land, but like fencing, if you have a swimming pool, all that stuff, the concrete, all of that is on a 15-year schedule. James: Got it. So they split it into five, seven, 15 and they start depreciating. So very interesting. So does it matter whether you are doing this cost segregation on a major rehab project; with this project, there's no rehab? Yonah: You can definitely get more benefits when you're doing a rehab. Because when you are adding any money to the property, that money being added in the capital expenditures, it's going to be added to that basis. Meaning added to the books and now going to depreciate that amount of money as well because that's going into the property. So, again, if you bought this building for $1 million and then you went and added another $500,000 in renovations, that $500,000 now gets depreciated as well. So you can cost segregate that as well and break that up into the different components. James: Oh, interesting. I didn't know that. I mean we do a lot of rehab projects and I just never understood whether we should do more rehab will be better. But what do you think just increases the value and you get a bigger depreciation compared to... Yonah: And not only that, we're not going to get ahead of ourselves cause now we're not at the A level yet, we're going to come back to that. You can do the bonus depreciation on the rehab as well. James: Got it. Got it. So very interesting. So does it matter if I buy a small 50 units and depreciate versus buying 300 units and depreciate for any investors in these deals? Yonah: You know, what do you mean 'does it matter'? James: Well, I mean whether you get more benefit out of it or not. I mean, let's say, you invest 100,000 into this deal, does it matter if I invest 100,000 into small 50 units versus putting 100,000 and do 300 units? Yonah: It's going to be pretty much within the same scale because multifamily properties in general if they're the same type of style, the percentages are going to be pretty similar within a window. So anywhere between, I'd say, 20 to 35% is going to be your general cost segregation, the reallocation of the assets, the faster lives. So you know, there are going to be, each property is going to be different, but generally speaking, it's going to be pretty similar. James: Okay. So it's basically based on percentage and the scale. Yonah: Right. James: Okay. I never understood that. Yonah: So if it was a million-dollar property and you're putting $100,000, you have 10%. If it's a $10 million property, you put 100,000, your percentage of ownership is going to be a lot less. James: Correct. Correct. Yeah. Because I have some investors who say, I only invest in 300 plus unit and I never understand why. So, because sometimes, I mean, a lot of times on a smaller property makes a lot more money. And sometimes they just want to do the bigger one. So I always think that there must be some kind of tax benefit that they're doing it. But at the end of the day it's just a percentage of whatever equity that you are getting. Yonah: Correct. James: Got it. Got it. So is there any tips and tricks for multifamily investors or any value add investors when they're rehabbing their project? For example, I met someone the other day where they say you are able to write off the address plate of a unit. Like, say unit one or two. If that address plate is on a metal, they say that you can write it off as part of tax depreciation. Whereas if you go and you know, put a sticker or coughed out the number, you're not able to, that was a huge thing for me. Is that true? I mean, do you get some kind of benefit when you do that? Yonah: I mean that is true. Again, that's part of the five-year assets that engineers could come and recognize what that is. And there are tons of things like that. You know, whether it's going to be what type of flooring you're putting in. James: Okay, let's go into that flooring. What flooring will give you the biggest bonus? Yonah: Alright. So carpeting is five-year property. Vinyl flooring is a five-year property. But if you're going to do real tiles, for example, that's considered actually part of the structure so it's going to one of the 27 and a half year component. James: So doing carpet and vinyl would be beneficial than in tiles in cost segregation/depreciation (?) Yonah: Much more. Yeah. Cause that's actually one of the high-value components if you think about it in each unit. Like, think about how much you spend on flooring. James: Yeah, absolutely. Flooring is one of the biggest expenses, especially on a major rehab. So that's a really good benefit that I never really thought of because I do have properties with tiles and I would think about converting it. And, of course, we don't do it for the sake of getting depreciation but it's just a bonus, I guess. What else is there that comes out to you that you think, Hey, to get these small benefits of depreciation, you guys should look at that. What else is in a value-add rehab? Yonah: Mmm.. James: What about appliances? White versus black appliances, does it matter versus stainless steel? Yonah: Always go with the black. James: It looks better, depreciates more. No, I'm just joking. Yonah: Yeah. I would say just be studious. Be careful with what you're spending. Make sure that, you want to consult a tax advisor who is savvy in this area because you may be leaving a lot of money on the table. You may be leaving huge tax deductions that you may be able to get. And one of the great things about depreciation is that again, we're taking the right off of the entire value of the property, even if you didn't even spend that from your own pocket. Meaning you took that on a loan, you took leverage to buy that property. The bank's money you get the tax write off for, James: Oh, that's awesome. Yonah: You think about it, you buy a million dollar property, you put down, maybe 200-250 your own money, but you're getting a tax write off of $1 million, which is crazy. So too with the construction, with the renovations, you may get 100% financing for those construction costs and you can write the entire thing off as a tax write off. James: Got it. Got it. That's very interesting. So let me ask you one more thing though. If I have a choice, for example, a roof, it's part of the structure, right? So if I have a choice to ask the seller to replace the roof before we close on the deal or should I do it after we close on the deal? Does it make a difference in terms of who gets the depreciation? Yonah: I mean, obviously, not from a depreciation standpoint per se because either way, you're going to get the deduction because if you buy the property, you're buying the roof as well as part of the property. If you then go and spend your money, then it's money that you're spending from your own money or from the bank's money, whatever, and then you're going to depreciate that as well. So the roof happens to be part of a structural component, which is not gonna be eligible for bonus depreciation or you know, cost segregation, it's just going to be part of the main structure of the building, which depreciates at a later time. So it's not necessarily something that's going to get more more benefit per se. James: Unless the roof is increasing your price at closing. I guess, right? Yonah: Obviously, right. And if you have you deferred maintenance on that end that you can benefit from. James: Got it. Got it. Very interesting. A lot of strategies that we can do when we're doing a value-add project. Which I think is important to understand because some things can make a lot of difference in terms of your tax benefit. So I want to go a bit more detailed into the five, seven and 15 years, right? So because of this, let's say you're depreciating a lot of the five years, a depreciation on max later schedule, right? And let's say you keep this property for two years, right? After two years you decided, okay, I'm going to sell it off versus keeping it more than around five years, right? So what's the benefit? What's the threshold of benefits of that depreciation versus depreciation recapture that you are getting on how long you hold the property? Yonah: Again, the threshold when you're going to look at property to property on an individual basis you really have to kind of look at it in a bubble and it's difficult to do. I mean, you may want to do that because the investors are involved, et cetera, in that regard. But even before I answer that, I like to just kind of take a step back and realize that the real benefit of real estate is when you're going to be constantly buying more, right? Because whatever's going to happen to this property, the taxes in this one can potentially be deferred and be pushed off with the next property I buy. And so, that's a viable strategy. Again, we also have to take a step forward and look at each property on an individual level as if like, this is the only property I'm ever going to buy. And so if that being said, if it's the only property you're only gonna buy, so you have to see, is this going to benefit me? If I hold this for two years, I'm going to take this depreciation upfront and therefore I'm going to get the tax free cash flow in the first two years. And then when I sell, I'm going to have higher taxes to pay then. So again, that calculation is going to obviously going to come up at that point. I would say that you should really take that into consideration. You know, if you're going to have two years old versus a three-year-old, or a five-year-old again, the cash flow is the main key to this puzzle. And then, if you are refinancing, which is another possibility, then that money coming from the refinance is also tax-free. It's not a taxable event, which means that that money that's coming back to your investors, which you may decide to pay out proceeds from the refinance to the investors, will actually increase their returns as well. So it's all part of like a bigger calculation. James: Okay. Awesome. So let's go to number A, the king of depreciation now, which was because of the introduction of the tax act 2017. The introduced bonus depreciation for used property. So usually bonus depreciation is only built for new properties, right? So can you explain how that was born and what's the motivation behind it and how does it work to become A grade depreciation? Yonah: Yeah, so bonus depreciation, 100% bonus depreciation I should say, you know, came about on used property. That means that it used to be only if you built a new building. You did new construction, you were able to take a tax write off of the depreciation of anything that depreciates under a 20-year schedule. So again, that goes back to all this stuff. We're going to segregate, the cost segregation, the 15-year land improvements, the five-year assets, which are all personal property, et cetera. All of that stuff can now be eligible for bonus depreciation. Now, when you're doing a new build, it used to be only 50% of that. I mean, you could take a 50% in the first year, you could take a deduction of that depreciation. Then came the new tax code and said not only to 50, we're going to move it to 100%, which means you can take 100% of all of that depreciation and write it off in the first year. Okay. And used property, meaning even if it's an old property, you're buying it for the first time. So this is really going to take depreciation to a whole new level. It's going to take the first year, you know, instead of like on that million-dollar property, instead of a $30,000 tax write off for regular depreciation. And then you're gonna move it up with regular cost segregation, maybe to 60 or 70,000, comes bonus depreciation and potentially you're going to get like a $200-250,000 write off. James: Yeah, absolutely. Absolutely. And what's the motivation of the government passing this tax law? If you know. Yonah: I didn't come here to discuss politics. James: Okay. We have to get away from that. So there must be some reason. Yonah: I think it has to do with the stimulation of the economy, right? The more tax write-offs, the more money can go back into investing, creating jobs, create more housing, et cetera, et cetera. James: But it's limited until 2023 if I'm not mistaken. And after that from 100% becomes, I can't remember, 50%? Yonah: It goes to 80% and starts phasing out every year until it's gone. James: Awesome. Awesome. Yeah, I mean it's surprising for me because I did a lot of bonus depreciation for most of my properties. I think all of it is last year and everybody like almost like right off their capital. And when they looked at their K1 and everybody was surprised that, I mean a lot of people understood what it is, but there were a lot of new people who are asking me, what happened to my money? Did you disappear? Absolutely. Everybody was asking for it because a lot of them got like almost 90 to 100% write off. And I had to explain to them about the bonus depreciation and all that. So yeah, I'm going to be doing a webinar soon, I think, in the next few weeks. I'm not sure when is this episode going to be aired. Probably we'll pass the webinar, but if any of you are interested in getting that webinar link to register, cause I'm going to get a CPA to translate all this bonus depreciation into how passive investors will get the benefit out of it because there's a lot of ethicalities when it comes to tax codes. And I want to get a CPA who specializes in real estate professionals and how does this whole thing benefits everybody in investing in real estate, including passive investors who are not real estate professionals. Cause a lot of times real estate professionals, well understood, but people didn't want to know how does passive investors get the benefit out of real estate investing. All of that will be in the webinar, it's going to be a very interesting webinar. So can you tell our audience how to get all of you? Yonah: The best way to find me is actually LinkedIn. That's my home base. That's where I hang out and spend most of my time. But seriously, you can reach me, my email is a great way to contact me, YWeiss@madisonspecs.com. So SPECS is actually an acronym for specialized property engineering cost segregation. So that's our firm. And yeah, especially if you have a property you're looking at and you want to see what the potential benefits would be, we do an upfront analysis so you can just kind of see what those numbers, the potential tax benefits would be. Whether you're under a contract with a property that bought a property, owned property for years, you can see that. So yeah, happy to do that and please connect with me on LinkedIn. James: Yeah, absolutely. Absolutely. And before I let you go, when is the best time for someone to engage cost segregation firm? Is it before they go under contract? When they're looking at a deal after they close on the deal? Yonah: Usually you know, after they close is the best, I mean to engage, obviously you can reach out to me for that estimate. Even when you're under contract, it's probably the best time, but you know, you're wanting to get it done if you need it in the first year, which not everyone needs it in the first year. You may buy a property that's totally not profitable, you have no income. You don't need this. But yeah, if you want to get it done in the first year, the sooner the better. Because again, you need this for your tax filing and especially if you have investors, you can just send out K1, you need to get that out earlier on the year. The sooner the better, you can get it done. James: Oh, interesting. I usually start the first year itself, but what you're saying is when you need the depreciation, I guess. So, yeah, absolutely. Awesome. Yonah, very nice to have you on our show and I learned a lot and I'm sure our audience learned a lot. We go so much into the detail of, you know, one of the biggest benefit of investing real estate on top of the cash flow that you get. So the depreciation and the cost seg, and now the A-class depreciation of bonus depreciation. Absolutely. Thank you very much. Yonah: Thank you, James. It was my pleasure and we will see you soon. James: Absolutely. Thank you.

Imagine being able to learn, hands-on, exactly how to operate a deep-sea submarine — without needing the submarine! That’s the kind of training opportunities VR training platforms like Immerse are able to offer with the technology at their disposal. James Watson and Justin Parry drop in to talk about all the other opportunities the tech presents businesses. Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today, we have two amazing guests, James Watson and Justin Parry from Immerse. Justin is the co-founder and chief operating officer and leads product strategy for Immerse. As a founder, he designed and led product development of the Immerse platform from scratch. He now oversees the delivery of all technology and VR content across the organization. Justin has 20 years experience creating and growing B2C and B2B products from startups to global organizations. He’s developed and launched online platforms, websites, mobile products across the world, and joined Immerse from his role as global director of the Internet Yellow Pages for Yell Group. Immerse Virtual Enterprise Platform enables enterprises to create scale and measure virtual reality training content and programs. The platform enables enterprises to look at training and assessment in a completely different way, providing the tools to help maximize human performance, resulting in a more engaged, better equipped and safer workforce. If you want to learn more, you can visit immerse.io. Guys, welcome to the show. Justin: Hello. James: Thanks, Alan. Alan: [laughs] Hey. So you guys are in beautiful, sunny, warm UK. How’s it going over there? Justin: Well, it was very sunny until last week, actually, with the sort of slightly freakish weather that we’ve been having, but today is cold. James: It’s British grey. Justin: Yeah. Alan: British grey. Oh, well, we’ll just assume it’s beautiful and sunny. So let’s get digging in here. I’ve had a chance to try out the Immerse platform. It’s really amazing. You’re completely immersed, and the demo that you guys did for us: We were inside of a submarine. We not only go into it, but interact with all the bits of the submarine and start to learn parts of, “how do I make some things work?” And the great thing about it is you guys were there every step of the way. But one of you was in VR, and the other one was on a tablet or a computer. Talk to us, just to how did Immerse come to be? Justin: Well, we’ve been in the training space quite a long time. We weren’t initially in VR. We actually delivered our training applications via desktop, but they were always multi-user. So we would be tying together people from somewhere — maybe even Kazakhstan, some oil and gas training that we did — with trainers that may be in Iraq, or in the UK, or wherever that might be. And that was all done in a sort of virtual world. So it’s a little bit like the old Second Life, if people remember that. So it’s a powerful proposition, but it’s still a little bit difficult to sell. So with the advent of the headsets — or the latest generation of headsets, at least — we made the move into VR and a lot of services that we built there just kind of immediately made sense, and we got traction very quickly. We effectively then pivoted the whole company to be a full-on VR training platform. We rebuilt a lot of those services, especially for VR, because there was obviously some small itemization that we need to make. And so we find ourselves where we are today. And just in terms what you said there,

Imagine being able to learn, hands-on, exactly how to operate a deep-sea submarine — without needing the submarine! That’s the kind of training opportunities VR training platforms like Immerse are able to offer with the technology at their disposal. James Watson and Justin Parry drop in to talk about all the other opportunities the tech presents businesses. Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today, we have two amazing guests, James Watson and Justin Parry from Immerse. Justin is the co-founder and chief operating officer and leads product strategy for Immerse. As a founder, he designed and led product development of the Immerse platform from scratch. He now oversees the delivery of all technology and VR content across the organization. Justin has 20 years experience creating and growing B2C and B2B products from startups to global organizations. He’s developed and launched online platforms, websites, mobile products across the world, and joined Immerse from his role as global director of the Internet Yellow Pages for Yell Group. Immerse Virtual Enterprise Platform enables enterprises to create scale and measure virtual reality training content and programs. The platform enables enterprises to look at training and assessment in a completely different way, providing the tools to help maximize human performance, resulting in a more engaged, better equipped and safer workforce. If you want to learn more, you can visit immerse.io. Guys, welcome to the show. Justin: Hello. James: Thanks, Alan. Alan: [laughs] Hey. So you guys are in beautiful, sunny, warm UK. How’s it going over there? Justin: Well, it was very sunny until last week, actually, with the sort of slightly freakish weather that we’ve been having, but today is cold. James: It’s British grey. Justin: Yeah. Alan: British grey. Oh, well, we’ll just assume it’s beautiful and sunny. So let’s get digging in here. I’ve had a chance to try out the Immerse platform. It’s really amazing. You’re completely immersed, and the demo that you guys did for us: We were inside of a submarine. We not only go into it, but interact with all the bits of the submarine and start to learn parts of, “how do I make some things work?” And the great thing about it is you guys were there every step of the way. But one of you was in VR, and the other one was on a tablet or a computer. Talk to us, just to how did Immerse come to be? Justin: Well, we’ve been in the training space quite a long time. We weren’t initially in VR. We actually delivered our training applications via desktop, but they were always multi-user. So we would be tying together people from somewhere — maybe even Kazakhstan, some oil and gas training that we did — with trainers that may be in Iraq, or in the UK, or wherever that might be. And that was all done in a sort of virtual world. So it’s a little bit like the old Second Life, if people remember that. So it’s a powerful proposition, but it’s still a little bit difficult to sell. So with the advent of the headsets — or the latest generation of headsets, at least — we made the move into VR and a lot of services that we built there just kind of immediately made sense, and we got traction very quickly. We effectively then pivoted the whole company to be a full-on VR training platform. We rebuilt a lot of those services, especially for VR, because there was obviously some small itemization that we need to make. And so we find ourselves where we are today. And just in terms what you said there,

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James: Hey, audience. Welcome to Achieve Wealth podcast. Achieve Wealth podcast focuses on value add real estate investing. I'm James Kandasamy. Today I have an accomplished couple, Jack and Michelle Bosch. And Jack and Michelle Bosch have done more than 4000 land flips across the nation. Land flips is something very interesting to me. And, you know, it's an asset class, or an asset class, which I think is very interesting. And you can learn how we make money out of it. They've done a lot of single-family houses. And they also have done apartments; 330 units apartments. And, you know, they are continuing to look for more and apartments as well, but I think they are the masters of land flip. Hey Jack and Michelle, welcome to the show. Michelle: Thank you so much for having us, James we're excited to be here. Jack: Thank you for having us, James. James: Tell me, did I miss out anything in your credentials or you know, did I -- Jack: No, other than we're both immigrants, we both came from other countries. So we started here with, just like you, just came over from another country and so we have that in common. But now we flip now 4000 pieces of land. We teach it now; so we have seminars on that. But then for asset allocation, basically the money we make for land flips and whichever way rental properties now, we rolled that into more and more two apartments now. Michelle: Yes. James: Got it. Michelle: To produce what we call one-time cash with the land flips like you work for a once and you get paid once. We're also able to produce some cash flow because we are also able to sell those properties using seller financing, you know. James: Got it. Michelle: And so you do get some mailbox money, but those notes usually come to an end once the property is paid off. And so, we're always in the back of our minds is okay, let's roll cash profits and cash flow into what we call forever cash, which would be a partner. James: Got it. Before we go into the detail of land flipping, I want to understand your background because I know all of us are immigrants So can you tell me when did you guys move to the country? And how did you move? Were you already successful on the day that you land in this country? Michelle: Oh no. Jack: Of course, we're like, we're a billionaire. James: Did you find gold outside the boat? Jack: No. So, Michelle… Michelle: Yes, for me I came from Honduras here in 1995 to study. I came to a tiny little town like about three hours South-West of Chicago called McComb, Illinois, that's where I met this man in the middle of the cornfields. It's basically university town, you know, and nothing else to do.I came here for a business degree, my undergrad, and I was in my senior year there, my third and last year when I met Jack. We shared some upper finance courses together because he was here for an MBA, 10 months. He met me and then he couldn't leave anymore. James: Got stuck, you got stuck in the US. Jack: She's right. She summarized it. I came in 1997, Michelle was in her last year in undergrad. I did come in for a Masters to that same university that had an exchange program with the university I used to go to Germany. And I was kind of like be able to kind of accomplish three goals in one year. Number one; I was able to get an MBA in the United States because it was an accredited school and I was studying business Germany. Already had enough credits and I just needed these 10 months, was enough to give me the American MBA. They give me, I tested out and all of these other things. Number two, I was able to get credit for the missing classes in Germany. So with that, I didn't have to go back to Germany to do more classes. I completed my degree in Germany, those same classes gave me the MBA. Also helped me complete my degree in Germany and improve my English. And the fourth and most important thing, I met this one. Michelle: But to answer your question as to whether we came here successful, absolutely not. I came in with two suitcases to my name, Jack pretty much the same. You know, I was raised by a single mom and my father passed away when we were very, you know when I was very young. And it was, you know, she was sending me here to study with a lot of sacrifices. I had to take several courses, you know, take seven courses per semester, like advanced as much as possible, because I couldn't afford to be in the US for more than two and a half, three years, you know what I mean? And eating soup towards the end of the semester when you run out of money. And, but I didn't have, I did have in the back of my mind the thought that real estate has been incredibly good for my family. You know, before my father passed, he had made an amazing decision. And it was to buy a piece of commercial property that to this day spits out cash, you know, for my mother. And so -- Jack: And that piece of property brought her to college here in the -- Michelle: Got me through college. Jack: And still sustains her mom over there. Yes, in my case and my dad's, again the same thing my mom, not the same thing but similar. My dad is a high school teacher, retired now. My mom's a stay at home mom. So no, I came here with student debt. I came here with enough money to pay for one semester, I didn't have, really didn't have a clue, how I would even pay for the second semester. Luckily, I got a job at school. The first car that I bought in the US was a $900 old Chevy caprice, like the old [inaudible05:31] car that they use to drive around -- James: It had four wheels, right? Four wheels? Jack: Four wheels, yes. Michelle: And I was like Jack, why did you get this, I mean, there are so many cars, why did you get this car? And his answer was like, cars in Germany are so tiny, I was looking for the biggest car possible in the US. Jack: Like Germans and every single one of them bought the biggest car that they could find. James: That's good. That's good. Yes, I like to, that's a very interesting story from both of you, right. So I like to, I mean before we go into the technicality of the commercial real estate and all that, I like to understand a lot about the thought process and you know, the people behind it, right. Because I think that's what makes everybody successful. It's not about the tool like real estate, right. So tell me about what was your family thinking when looking about the US from outside, right? Did they think the US is the land of opportunity, easy to get rich? Or how I mean, can you talk about the process that when families outside of the country when they want to send their children to the US, what do they usually think, you know, what do they think that you kids will get here? Jack: Well, I think Michelle's mom was perhaps not thrilled that she would stay here. Michelle: Yes. James: But not thrilled? Michelle: No, yes. James: Okay. Michelle: The whole point was to come here, study, not find a husband, go back home and basically help her manage, you know, this piece of real estate and hopefully, you know, continue growing the legacy that was left to us. James: Okay. Jack: Next, get a job, right? Michelle: Yes, yes. Jack: Same thing here. My parents were absolutely not thrilled that I was staying here behind. They, I literally had the job lined up in Germany. I had the, I just put my student furniture in my parents' basement. I had a good degree from a good university and good things and they're like, what are you doing? What are you staying there? What's going on there, you're so far away. In particular, my mom had a really hard time with it for several years. But then once they saw our success, particularly once we entered real estate, and once we saw success and what that success actually means for them too and for us. It's like we don't, we see our parents, this year we see my parents three or four times even though they live in Germany. And it's like, and they, we support them a little bit financially. They get to come here and they get to spend time here. And they see that they don't have to worry about us like we're the one or like, we're my, Michelle and our family, they don't, they're like a peace of mind. They're okay. They're good. They're happy financially, they're good. So, you know what as a parent you wonder, you want to have that feeling. So they know, ultimately, it's a good decision and took them like 15 years to say that, but they did. Michelle: Yes, I mean, we also contributed to, you know, being able to retire Jack's dad before time. You know, a couple of years before he had been working as a school teacher for many, many years. And he was just at the point where he just didn't want to do it anymore but he couldn't leave it because, you know, that involved a big reduction in his pension if he did. And so we put the pedal to the metal back then and it was just through land flipping, to be able to make up for that, you know, for those two years of early retirement and being able to retire him early. So -- Jack: So he ended up retiring a year and a half, two and a half years early because of that and James: Wow, awesome. Jack: And so overall so now they totally have changed. Michelle: Yes, so family has been always I think also big why for us, a big driver to get things done. James: Got it. That's absolutely what happened, you can come here and help out your family back home. It's just sometimes people, I mean sometimes they think that okay we want to come to the US and stay here but that was not the case for both of you, right? I mean, you came to study and you're supposed to go back. But you got stuck with each other. Jack: The United States is a wonderful country to be. But then we also, we realized, I don't want to live in Honduras, Michelle didn't want to live in Germany. Nothing wrong with these two countries, they are beautiful countries but language barriers, cultural barriers [inaudible09:40] we're already here, let's try to make this work here. We got lucky, we both got jobs here. We got the job that got the visa, the h1B visa, took five and a half years to get to that process. Michelle: And it was a job, jobs we both hated. But we were handcuffed because of the, you know, green card situation. And so we had to stay but -- Jack: Yes, but yes, it was just something, let's see if we can make this work here because we like it here. And we -- James: Got it. Jack: Beautiful neutral ground also for us. James: So do you think that as an immigrant, did that whole life situation gave you a boost, a reason for you to be successful in the US? Michelle: Absolutely, it like, I think it was incredible, it gives you an incredible drive and hunger. Like I don't come from a wealthy society like Jack's, you know. I was going back to a third world country, you know, yes, from a middle-class family, but still to a very poor society. And so for me, yes, that, you know, that was an incredible drive, you know. You still go back home and those wealth disparities between the haves and have nots are brutal. And so you definitely don't want to be caught in the haves not part. You want to be caught in the other group of people. So, yes, that was definitely a big, big drive for me for sure. Jack: Yes, absolutely, yes, same here. I mean, but a different way. Here, it's more like I could, anytime I could have left and go to Germany, first-class country, Mercedes Benz, would've gotten a good job with a BMW as a business car and expense budget and staying in nice hotels and all those kind of stuff. But the overall I mean, there's something really amazing about the US and I keep saying and it's not like blind nationalism. It's just for business and for success and for comfort, and for just that particular business. It's just an amazing country. It's like so once we started setting our eyes on that, it's like, it's so easy to do this. And definitely helps to be an immigrant, I don't know if the hardship helps if you use them, right. Michelle: Yes. Jack: So we use them as fuel. We used them as a reason why we needed to succeed because we did not want to live a life like I was travelling 100%. I mean, sounds glamorous, like I was jumping the plane on Monday morning going somewhere. But I was staying in Holiday Inn Express where ants were crawling up the walls. And in some cases, and usually, in small towns, where there are five restaurants, three of them are fast foods and I was like working in some companies up till midnight and I didn't enjoy it. So I use those things as fuel to say okay, I really got to do something extra in order to succeed. Now, having said that, being an immigrant here, which as you can probably confirm, is you start, you see way more opportunity that the non-immigrant see. Because it's not normal to you, what you see around you is all new. So as it's new, you look at it from a different angle and you see the holes in it, based on compared to what you see in other places in the world. And it's like well, and any kind of opportunity that ever existed is really masking itself as a problem. So you see, like anything that created like glasses, have been created because people don't see up with eyesight anymore. The problem is the eyesight gives is the solution. So anything even multifamily is the solution to a problem. You take a problem, you take a problem property that's been run down and you make it into the prettiest property in the neighbourhood. You provide a solution for people who want to save, solid, good well-working place, affordable place to live you can make something out of that. And it's true for everything and as an immigrant, I have a feeling you see that much more than then if you're born and raised here and it's everything is just normal. James: Yes, yes. Hey, I had a friend from the UK and he left the UK came to the US and he kept on telling me this. I don't know whether the UK or entire Europe, right, I mean it's a well to do country, it's a rich country but there's no easy part to break out from your circle.You can't break out as a breakout and go to the next level, you’re always within that, you're probably working, you're earning, you're learning, you are living an average life like everybody else, but you can't break out to the next level. So I'm not sure how is that in Germany, but in the US. Jack: Plus Germans, they don't move a lot. So you're on top of it, almost like down by your social circles, that like there's a party, a thing and a friendship. So if you start breaking out, you become you're almost alienating the people around you. Michelle: An anomaly. Jack: An anomaly. James: Okay. Jack: And if you don't have the stamina to keep that off and build a new circle of friendships or so, then you're going to be pulled back down. And that's another benefit as an immigrant, it's like, hey, it's like you didn't burn the boat but you cut the ties. It's a brand new world, it's a brand new opportunity, you associate yourself and make friends with those people that you want to make friends with. And it's just a, it's almost, it's a brand new world. It's a different thing. James: Got it. Michelle: I think especially in Jack's case, you know, resonates with that because he comes from a very small town in Germany. And he's like, there are some people that even though I didn't want to socialize, I had to because it was such a small town. James: Yes, that's true. Jack: Once when I was younger I was in college, I went to study in Spain for half a year. I came back went to my favourite bar and they just asked me, hey you looked tan, what do you want to drink? So nothing changed in like eight months or so. And not a single thing had changed, the same people were sitting at the same desk, tables, in the same bar, drinking the same drink. And 20 years later, still is nothing has changed. It's still, you know, look older and unhealthier but other than that it's the same thing. James: Yes. That's maybe that's why the index happiness index is much higher in some European country. People are just happy with the way they are, right? Jack: Yes, and there's no judgment in that. Michelle: Yes. James: Why do you want to rush? Why do you want to rush? Why do you want to get rich just leave as it is, right so? Jack: Yes, there's nothing set to be there but if you have ambitions if you enjoy growth, like a bit like we enjoy personal growth. We're really on a personal growth journey, it comes with challenges, it comes with new hurdles, it comes with expansion and so it wouldn't be my work. Michelle: And those challenges, you know, are our part, we know are part of the journey. And you think that the goal is you know, a worth goal, but it's really, the goal is a being on a constant process of becoming, an expansion kinda like what Jack said. Jack: And the wealth comes as a side benefit of that. James: Got it. Got it. So let's go to your businesses. So you guys, you had your green card, you came here. You worked for how many years did you work on a corporate life? Jack: Five and a half. Michelle: Five and a half. James: Five and a half, so what happened after five and a half? When did you start your land flipping thing? Jack: Well, the land business, we started about three years in or two years in we realized this is not what we want to do with this job thing. So we started dabbling with real estate. And we really didn't find success until about four years into it, until the end of 2002. So -- James: Hold on, on the two years that you realize that your work is not the thing that you all wanting to do, right? Jack: Right. James: What was that ah-ha moment, say that? Jack: The ah-ha moment was actually, for me was the first particular day that the company of 7000 people, let go a 1000 people in one day. Michelle: Right after September 11. Jack: And the economy did a massive shift downwards, the software company that had grown from 500 people when I joined them to 7000 people, three years later to two or three years later, we're starting to go back down from 7000 to 4000 people. And they did that in one year. As a matter of fact, it was within three days, during that one year. James: Wow. Jack: So one day 1000, another day 1000, another day 1000. These cuts were like for a few months apart from each other. But the first time that happened was when they literally, left and right when they when we were at the customer side, there was a software company. But I don't know anything about software and just wasn't a business, account department. They, business analyst, we were so worried about the customer side, that the phone would ring and our network was shut down. Usually, connect the internet to our corporate networks to get to files and stuff, all of a sudden, nobody could get into the network. It's like, oh, you get it, you get it. Michelle: You know what's happening, right? Jack: We started calling people in other offices, what's going on, you get in, no, nobody could get in. It's like oh, our network is down. Next thing you know, few of them, was over the phone rings, the guy picks up and all the colour leaves his face. And three minutes later, he picks up, he grabs his stuff and says, hey guys, nice meeting you. I was just fired. And he basically picks up his stuff and leaves. And that's it. And I was like, what you mean that's it? Like, again, Germany, if somebody fires you, they have to give you three months, -- Michelle: Three months. Jack: Three months notice. James: I thought it was 12 months notice. Michelle: Yes, so then you can actually train your replacement. Jack: Train your replacement and so on and or least have to pay for three months, some company say go home, but they have to pay for three months. Here, you're off and they gave him I think of four weeks severance if they signed something that they wouldn't sue the company. So and then during the course of the day, a whole bunch of people that I knew were let go. And I was sweating bullets, obviously, you know, we both were sweating bullets, because obviously, we work -- Michelle: And at that point, I had joined actually Jack's immigration, you know, files and paperwork because we figured, okay, there are very few people trying to emigrate from Germany. And there's so many more coming from south of the border, that stuck on Jack's application. And so we were both, you know, on his paperwork. Jack: So if I would have lost that job, we would have 60 days to find another job or leave the country. So at that moment, we realized, okay, this is, we're so breaking replaceable here, we're just a number in this big wheel of 7000 people. And after the day only 6000 people were like, okay, we got it, we got to do something else. We don't like it. After five and a half in an industry, you're almost like pigeonholed in that industry. I didn't want to stay for the rest of my career in that industry. So we wanted to get out. And we didn't know how to do that we just looked around. And after a few months or weeks of looking, we came across real estate, tried all kinds of different things, but couldn't get anything to work until we came across land flip. Michelle: And I think the land flipping thing was even, like falling forward. Jack: Yes, like pure coincidences, just like -- Michelle: We're looking into taxing and taxing you know, taxing investing. And I had gone up to somewhere in Northern California to a taxing option and stumbled upon, you know, a piece of land, a lady that owned a piece of land and we auction it off. And we're like, oh my gosh, you know, how could we do something like this? But instead of waiting until an auction happens, you know, how can we get to people much, much sooner. And because if she's a, you know, an owner of vacant land and wanted out, there must be other people. Jack: So we started sending direct mail to owners of real estate who have back taxes. And only people that own land, call us back. And -- James: You know what, that is exactly happened to me. I was trying to look for houses and all the people with land call me back. I said I don't want land, I want houses. Jack: There you go, you just missed out on a big opportunity right there. James: Yes, I should have known you guys. Jack: And then one guy had a property, it was worth about $8,000. But he hadn't done it, what's called a percolation test to make sure to put a septic tank in there, to see how the water, how fast the water sinks in the ground and it hasn't passed the septic test. So to him, it was worthless and he was leaving the state and he was wanting to leave. And he's like you guys can have that thing. And it's like, well, how about $400, he's like take it. So we got this thing for $400. And we sold it literally the next day to the neighbor across the street for $4000. James: Wow. Jack: And that became the beginning -- Michelle: And that's because our negotiation skills sucked. We were, the neighbor shows up Jack: And they just offered 4000 and we said, yes. Michelle: We were ecstatic, you know. Jack: Instead of like negotiating, we're just like -- James: You were like 10 times more, that's it, done, right? Jack: Right. And then the next deal was 10,000, the next deal, babe then we got to deal with like 21 properties for $30,000 that we sold for over $100,000. And then all of a sudden things started working. And then we also realize that most people that want to get rid of these properties don't actually even own property taxes. So now we go after all the general land and we generated millions of dollars, and we started doing this part-time then. Then Michelle quit her job because she was on the visa, started this full time. And then in March of 2003, I got, we got the green card. And then a few months later we felt comfortable. Michelle: I retire again. Jack: Retire, exactly. James: So my wife styles me. Jack: Then so in October of 2003, we quit our job, but it just we stumbled into that, bonded, built it up. And then for several years, we put the blinders on and all we did was land flipping. We only put our head up when the market crashed and everyone around us was losing money and we're still making lots of money. And then that's when we started buying single families and then later apartments. Michelle: Because we could buy houses here for forty, fifty thousand dollars, you know, with five grand in repairs and rent them for anywhere between $900 to $1100. James: Yes. Michelle: So you know, it made sense. And we had all the cash profits, you know, from the land business, because that land business actually, we're able to grow it very rapidly to almost an eight-figure business. You know, the first year we did about 60 deals, the second year, we did about 120 deals, 130. Jack: The third deal, 3800 deals. Michelle: Because we use them, we figured out a way to flush a lot of these properties. And by using auctions. So we used to have big live auctions, you know, we advertise on TV, radio, billboards, periodicals, online flyers. And get like 600 people to a room here in the Phoenix Convention Center, and sell them in one day 250, 200 to 250 parcels. And so we were quickly able to scale that and -- Jack: Build a bigger operation then, with like 40 full-time people. At the auction days, we had 120 people work for us, it was a big operation and we built them. And then we use those profits to then get into the forever cash market meaning buy, put asset allocation, as I call it, take the money we made and roll it over into something that brings cash flow for the rest of our lives. Now we have like 50, completely free and clear rental properties, which now have quadrupled in value. And we still own. James: That's awesome. Awesome. It's very interesting on how you stumble upon doing yellow letters. So that's how, I mean, I was looking for houses. And I believe I look at tax lien lease, if I'm not mistaken, people who didn't pay tax because most of the people who have an empty land, they don't want to pay the tax, right? Jack: Right. James: Because I think there's no cash flow, there's nothing coming. So Jack: Exactly. James: So many calls coming back, I was surprised at the number of response, people calling, but was calling all for empty land. And I say, I'm not going to buy that. So but looks like you guys monetize that I, I should have known that. Michelle: And you know, and even there, it's like in our countries, there's no way that you're going to lose your property over for taxes. But here in the US, you do, you know, the tax lien foreclosure method or through the tax [inaudible 0:25:16]. So those are opportunities that perhaps we were able to really, you know, hold on to because neither of our country's -- Jack: We would like, it blows away that people would even let these properties go for taxes, it was a perfect opening for us. And yes, so we monetize it in two ways. We learn, we wholesale them, we wholesale them. And we still do that, we just sold one week, actually two last week and, I don't know, every week there are sales. And we wholesale them, basically we buy something for $2,000 and go sell it for 10, that's not a bad profit, right? James: Absolutely. Jack: You can live off that. And plus, they're very affordable these properties. Or what we also do is we sell a seller financing. So a couple of months ago, there was one particular deal I want to highlight, is we bought the property for $5,000, an empty lot here in the city of Phoenix. And we sold it for $64,000 with a $6,500 down payment. So if you do the math, we paid five for them, and we got 6,500. So we got all ready -- Michelle: Our money is back. Jack: The moment we sell the property, our money is back. And now for the next 20 years, we get $500 a month and we'll make over $112,000 total on a property that we have zero money in, the moment we sold it. James: That's awesome. That's awesome. So let's walk through the land, the best land flipping strategy. Right? Jack: Okay. James: Because you guys have done it many times, right? So first is where do you get the list of landowners? What the, where's the best place to find? Michelle: So there are three possible places, we are still in love with a more difficult one. Because the harder it is for me, the harder it is for everyone else. James: Correct. Michelle: So there are places like Rebel gateway or Agent Pro, where you can get lists. And I think these two -- Jack: Lists services. Michelle: List services that basically, Jack: Online lists services, James: Lists source, right? Is it list source or -- Jack: List source or logic or agent pro 24/7.com. There's a whole host of different websites. James: What kind of list should we look for? Jack: We're looking for land lists, ones with value James: Other criteria, right? Jack: Yes, land, the other criteria is that the land value is below $100,000. Typically, because we found that to be our sweet spot, now you can go up above, but then your response rates are going to drop. [inaudible27:41] the pay for these properties just skyrockets and so on. But you can do those deals like we have a student the other day that made $192,000 flipping a deal that he put on the contract for much more than we usually put the properties under contract for. It went for 80 and he sold then for, what is that, close to 270 or something or 300. And then he made his offer to closing costs 192,000. But usually beyond that, we like out of state owners, but they don't have to be out of state. So there's a couple of other criteria. Then once you get that list, -- Michelle: You send them you know, you send them a letter and you can either you know printing stuff and stamped and lick all your envelopes and your letters. Or you can send it through a mailing house if you want to outsource that and send out letters and just hold on to your seat because you're going to get -- James: You're gonna get a lot of calls. Michelle: A lot of calls. Jack: Right, you're going to get a lot of calls, exactly. We did, for example, yes, when you send out these letters also, so we don't use the yellow letter, we've developed our own letter and split tested that hundreds of times until we got it to a point where we could not improve the performance of it anymore. And so our letter sometimes, there are a few counties where you get lower response rates, but usually, you get at least a four or five, six percent response rate. And it can go as high as 15 to 20%. James: So let's say now someone calling you, say I will land to sell, can you buy from me? What are the things you look for, to see whether you want to take down their number and follow up with them? Jack: First thing is motivation. Michelle: Yes. Jack: Because almost any kind of land sells, it's just if you get it cheap enough. Now, having said that, there are certain areas, certain pockets that we don't buy. I mean, there are areas in Arizona, where its land, an acre of land is worth $500, that's not worth pursuing. So the value needs to be there. So we typically don't just go below $100,000. We also start above 10,000. So that we have, -- Michelle: So you don't get crap. Jack: So you don't get crap. Michelle: Yes. Jack: So good language here. So you gotta get you together, you don't get junk land. James: Thanks for being nice. Jack: Yes, we have that ongoing, she's the foul mouth in the family. Michelle: Hey, you throw me under the bus. Jack: So then you, yes, you sent out these letters, I thin I forget the question. James: The question is, once they call, what are the criteria -- Jack: You asked them a few questions, you go through a list of questions that we created the script for and asked like if there's early access, if there is utility to the properties, and none of those things is a deal-breaker, they just determine how much you ultimately going to offer for property. James: Got it. And how do you determine what you gonna offer? Jack: Comparables, you run for market comparables similar to houses plus there are a few extra ways, like for example, particularly in rural areas, there might not be comparables of the same size. So if you're looking at five acre parcel, and you only have like 10 and 20 acre parcels, and there's no other five acres to sold or listed, you gotta adjust for size sometimes. So basically, a 10-acre parcel is listed or sold for $30,000. Well, five acres, not automatically worth 15, it's more worth a little bit more, because in rural areas, the smaller the parcel, the higher the price per acre. Michelle: Yes. Jack: So you get down, it's like the other way around, the bigger you go, the more kind of volume discount you get on the acreage. So going from 20 to 40 is not a doubling, it's more like a one and a half times in value. James: Got it. Jack: So 20 is, so the value over 20 years because of comparable shows you that's $40,000 and an 80 is not a 20 to 40 or 40-acre parcel is not $80,000. It's more like $60,000. So there's kind of you can adjust for those things. But the nice part is we buy our properties for five to 25 cents on the dollar. So that's the key to this entire thing. Because when you buy at 10, 15, 20 cents on the dollar, you can be off in your analysis and still make money. And you can make money by selling the reseller of financing and getting a down payment that pays for the property. And you have so much margin of error and so much offer in there that it's almost impossible and I'm not saying it is but it's almost impossible to screw up. James: Yes, yes. And what tool do you use to find those comparables? Jack: We use, we go on Zillow, we go on Redfin, we go on realtor.com, we go on landwatch.com, the same free websites, because I ideally go on the MLS, but the MLS only has, doesn't have all the land is allowed land it sells like owner to owner. And also even if you have access to the MLS, we do deals from Hawaii to Florida. Our students do deals out of the country, you usually only have access to the MLS in one little pocket. So it's impossible to almost have access to the MLS all over the country. Michelle: And it's relatively easy to do the comparable analysis we develop, like our own proprietary software that basically connects through you know, to Zillow, Redfin and all these services. So when I'm at a record, you know, and I'm looking at it immediately it populates for me, you know, whatever comparables. And if it's a little bit, you know, more, if it takes a little bit longer for me to do that, it's maybe eight to 10 minutes, you know, to look up a record elsewhere, specifically, like if it's an info lot, and it's completely built out, you kind of have to like back into the value of the land by figuring out, you know, what are the average, you know, prices in homes in this area? What is the average square foot? How much would it take a builder to, you know, building your house and, and kind of that way back into the value by -- Jack: So we build five methods to the value of the thing, not less, not the least is actually assessed value, any counties the assessed value as a relationship to the market value. And if you can prove over the first 10, 20 analysis that you do that this relationship is reliable, and you can just use the assessed value too for evaluation. Michelle: In a particular county. Yes. James: So you have to pay property tax on all this land, right? Do you try to flip it within the year so that you don't pay property taxes? Jack: As a matter of fact, the way most of our students are doing this is that they don't actually ever buy the property. What they do is that they put the property on a contract and then go market the property right away, and then either do an assignment or do it what's called a double closing, where they use the same day transaction where they buy it and sell it both in the same day. And the buyer brings up all the funds that pays everyone. So -- James: That's a wholesaling technique, right? Jack: It's a wholesaling technique, James: Yes, like in houses, that's what -- Jack: Exactly it's same, the same technique just that we use land for it. And the nice part about land is there's no tenants, no toilets, no termites, there's no repairs. There's no you don't have to show anyone the property. Michelle: James and in the competition -- Jack: Is almost none. James: That's why so many people call me. Jack: Somebody on this podcast just told us that he walked away from owning land because he didn't know -- James: I know. You know, I was thinking that time why are these people selling all their land. I mean, there must be some business here. But I was so busy looking at houses, right. And I thought… Jack: Right and that's the normal thing. So there's almost no competition. And for the last 12 years, we have done this entirely, virtually we have not looked at a single piece of land ourselves. James: Yes. Jack: Google Maps, Google Earth, you can see it all, you don't, Google Street View, you can just drive by your lot, take pictures. And it's all there, no reason to get dirty and dusty out there. Michelle: And that's another thing that I think I want to add in terms of like how simple it is. And now that we've like perfected our system, how predictable it is, you know, is that when we started looking into real estate, because we're both not from here, we had no clue completely clueless about construction, about estimating repairs for kitchen or bathrooms, for flooring, for roofing, we had no idea. And you don't have to deal with any contractors, any, you don't have to deal with any of those headaches that usually you have to deal with improve property when you're dealing with land. So that's something else we forgot to mention. Jack: And that's actually why we also, the main reason why we didn't jump from that multifamily right away, but we took the bridge of single families because we first needed to learn the details of how much does it cost to rehab a kitchen and the bathroom, and the flooring and windows and things like that. We didn't want to tackle a $10 million project first. We wanted to go, start small, so we bought some rental houses with their own money so if we make mistakes, it costs us money and not our investors. And little by little we then learned and after realizing that we can manage those also remotely because our houses are in three different markets; Phoenix, Cleveland, Omaha and an even though new houses in Cleveland, I just hold a show last week. I may have a few houses that I couldn't even find anymore because I haven't, the last time I saw them was like eight years ago, and they spit out cash flow every month. The property management companies who charge them, everything is good. So after that experience was like we're ready for a step up and now buy the bigger buildings and manage them. And we can also do that remotely. James: Okay, that's awesome. So I'm thinking why did I miss this opportunity, right? And I think the answer to my question was, I do not know who to sell to. So how did y'all solve the problem? How do you go to market, okay, today you get land, how do you go and find the seller? Jack: So initially, we started with eBay and newspapers and then we figured out this big land auctions. But the big land auction stopped working about 2007, 2008. Michelle: And started doing online auctions. Jack: And then we started doing online auctions, we shifted, started everything online. So since about 2008, the middle of 2008 now, we have been pursuing and we have been selling all our land online through websites like Craigslist, through Zillow, through MLS. If you own the property, if you have a paragraph in it, it's just that you're allowed to market it. You can even a property if you own it, it's easy to sell it on the MLS anyway, if you don't own it, you can have a paragraph in your contract which we have, that allows you to market this then you can put it off to the brokerlessMLS.com for $99 goes on the MLS. Again, but in other, this land specific websites like land watch, landfliprealtor.com again, land of America and the biggest one that is right now driving the most traffic for us and everyone else is the Facebook marketplace. James: So they are people looking to buy land from people? Jack: Oh, lots of people like -- Michelle: Facebook marketplace and Facebook groups land, land groups. Jack: Yes, Facebook land groups. Yes, there's a big market. I mean, we focus on three kinds of land. Number one [inaudible 0:38:34] lots, can sell immediately to a builder. Number two, the lots in the outskirts of town, right, if this is the city right on the outskirts of the city, that's where we still buy land because it's in the path of growth. Cities like San Antonio, cities like Austin, cities like Dallas, cities like Phoenix, cities like LA, like Denver, all over the country, they're growing, their growing infill. They're there. They're growing in the outskirts of town we're there and there are two ways and the third way is we're focusing on larger acreage in the more rural areas. And that is for the multi-billion dollar market off RV, ATV's, hunters, campers, how would you love to have a 40-acre ranch out into the hills of East Texas, right? Wouldn't that be beautiful? James: Yes. Absolutely, Jack: Yes. And there's millions of people that are looking for that. And then we put the one on top because we get so cheap. If you offer those properties with seller financing, they sell very quickly. Michelle: Or a discount -- Jack: Or discount or market value, wholesale, there is price, will advertise it's a good property, it sells very quickly. And for example, one of our students just posted something that they put, they put an ad on the Facebook marketplace and within 24 hours that has 4250 people look at it and comment and message them. And obviously, they had to take the ad down and had multiple offers on the ads in one day. Now that's not necessarily typical, it might take a few weeks for the property to sell. But there are buyers with it's a b2c market right, we're the business to the consumer market. And the end consumer buys a lot of these lots and the [inaudible40:18] lots are B2B to the builders. Michelle: Yes. James: And how do you check the entitlement of the land? What is it zoned and all that? Jack: There's another company, Michelle: Yes, so you go through a title company, make sure titles free and clear. Jack: There are title companies that we use are not the same companies, different department that we use when buying a $10 million apartment complex than when we buy for it for a $30,000 piece of land. Obviously, the cost is different because they charge us a minimum cost, which is usually anywhere between $700 and $1200 a deal. But if you're about to make $50,000 on there, you can pay $800 and then make 14,200, still okay. James: What about land, which has a utility or going to get utilities, is that much higher price than? Jack: Usually it is and usually it's already, Michelle you can. Michelle: Go ahead. Jack: Usually, it's already in the assessed value included, occasionally it's not because the assessors like a year or two behind. But it's definitely already when you run your comparables, it's already in the market because that word is out and then other properties in the market are going to be listed higher, which tells you, okay, or listed or sold higher, which shows you the market value is higher. So your offer is going to be higher and the seller is going to be happy to accept it. And you make more money in the process. Michelle: And it's much more attractive to buyers too. Jack: And it sells quicker. Yes. James: Yes. So I can see people like me doing this, right, because I already have done the yellow letter marketing, I know all the languages and you know all that. But so anybody can do that, right? It's a simple business, which makes a lot of money. And you are basically bridging the gap between people who need the land versus marketing to their direct seller who is in a distressed situation or who just want to get out from. Most of the time they inherited the land, they don't want to pay tax and they just get rid of it. Jack: Looks like you talk to a few of them. James: I did, talk to a few of them. A lot of them said hey, you know, my mom gave me and she died and now I have to pay property tax on it. And can you buy it or not? Jack: Exactly right. Michelle: So you're helping them and then you're helping your buyers too. And I think the how quickly you sell the property has a lot to do with how you market the property, how what kind of listing you create, you know. There's a lot of crap where you just show a piece of dirt and no, you need to dream it, you know, you have a catchy headline. I mean, you have to understand a little bit of marketing and copy and grabbing people's attention and so on and so forth. But nothing that you can't learn. James: Yes, absolutely. Absolutely. And what do you think? I mean, you have a property software on it, right? What problem does it solve? Michelle: So what that does is, so back in the day, when we were starting, and we were doing in just a few deals, you know, we could manage to keep our stuff, you know, on paper, on an Excel spreadsheet. But the moment we basically started really scaling this, you know, at the point that we started doing the auctions, we could no longer continue using Excel spreadsheets, we really needed you know, a CRM. And not just a CRM to keep track of our buyers and our sellers, but to keep us organized in our process flow. From the moment that the mailing went out to the inbound call being received to are we ready on the status where we've done research and ready to send an offer, has the offer come back, accept it and we sent this out to title escrow, is it back? Is it ready to be put into the catalogue for the auction, you know, for sale? And so it basically it's a process deal flow from beginning to end for land specifically. Jack: And we build the software in-house that guides you along step by step through the process of buying a property, keep them organized, like statistics, as tax, there is a built-in buyers website, seller's website, calculator for the numbers and things like that. James: So why do you need like, you know, like you said, you have like 15 staffs, right, you have the CRM, what function does the staff do? Jack: The staff does the work, I mean, the CRM organize to work for you, but somebody needs to put in the data. And somebody really needs to press the buttons and do the -- Michelle: And somebody needs to pick up the calls from the buyers. Like we have a lady that is just in charge of that as of this position, basically, there are other people making sure that the phone rings and she's just answering them. Jack: But having said that, this is us, right, we want to spend our time with our 11-year-old daughter travelling the world. We want to spend our time focusing on apartment complexes and not focusing but spending our time, we love learning right and looking at complex deals and things like that. So after building our land business to the level that wanted to build it, we started putting a team in place of it. Having said that, we have many students that run one of them, at the top of the head, I think of one of them is also a coaching organization. He is on track this year to do 120 deals alone with one assistant with one virtual assistant. So the thing is, because it's simple because you don't have to rehab anything, because if you don't have to do anything like that, he can do a, he can do 120 deals just as a two-man or a man and woman, kind of show. And so you don't need a big staff is a point, we have a staff of like somebody picks up the phone calls, answer them they, you can outsource everything. So we use a mailing and a call center to take the phone calls, we use a mailing house to send out the letters. So what we have inhouse is somebody does the deal analysis to figure out what the properties are worth, and somebody who team of two people that prepare the listings and go sell the properties. Anything else you don't really need, anything else you can do, you can outsource. Michelle: And documentation, unless you like to work with documents, paperwork. Jack: But all of that is electronic. Again, it comes in we have buyers signed by DocuSign. We have, we scan things, we put it on to Dropbox, we use different files. We attach them to our CRM and stuff. But it doesn't require a lot of people to do this, which makes it even more profitable. James: Yes, yes. I mean, I think you've sequence it very nicely so that you can scale gracefully and you can have your own time too, awesome. Jack: Probably the biggest thing I think that this business because there's no competition and as you said the sellers have people that are, there are people that inherited this property, they're not getting 25 letters a week, like the hospitals. They're getting nothing a week, so when your letter comes in and when you make that offer, we sent the offer by mail to them, we give them 10 days to actually accept the offer. Then when we buy it, we get a contract and we have three months or four months or six months, whichever we want to close on it. So it destresses the entire thing. That means we can design this business around our lives. And so the life designing with a life -- Michelle: Retrofitting it into the business, Jack: Yes, determining when we have free time. So it's truly a business that can be done based on everyone's work schedule and in full time can be designed such that you work with around the things that are important in your life. James: So does it still work now in this economic cycle? Jack: It's actually right now is the best market that we have seen in probably 15 years. Michelle: Yes. James: Why is that? Jack: Because the market is up so it means that buyers are, still buyers will, the sellers will always be there. James: Sellers always be there, yes. Jack: There's always going to be people that inherited the property and don't want it anymore. But the buyers are right out there, right now out there in the market. They're positive, they're upbeat, they want to buy these properties. They want to take them up, take their RV's up there. Michelle: Ride their RTV's. Jack: Ride their RTV's, spilled something on it so the properties are flying off the shelves, and probably the big right now our properties and our students' properties, we see the highest margins that we've probably seen since we teach this. James: Awesome, awesome. Michelle: We have people that are doing this that are you know, stay at home moms, single moms to Rob, who's a dentist, he no longer is a, well, he will always be a dentist, I guess. But he sold his practice because, you know, 10 months into the land flip he's like, I don't need to be behind the chair anymore. And now his wife who is also a dentist is looking to sell her practice as well, to people that are having a job still in parallel because they, you know, they are already 30 something years in it. And they're like they have just one more year for their pension. So they don't want to go back and are doing it in parallel. I mean, we have -- Jack: It's across the board. Michelle: It's across the broad, from all works of life. James: Yeah, I can see anybody doing this, right? It doesn't take a lot of time and effort, not like house flipping or even rentals or… Michelle: Yes, in the house flipping world, you get a call from a seller and he says I'm interested. I mean, you better meet him at the property, like within a few hours, because you're going to have two or three people that are chasing the same house. James: Yes, yes, yes. That's what happened to me. I missed out on the land flipping, I went house flipping, life has become so busy. So coming back to the next level commercial asset, not the next level. I mean, the other commercial asset class that you guys are doing, which is multifamily, right. And you said you're doing it so can you explain that to me why you're doing that? Jack: Yes, we're doing that for long term generational wealth. So in other words, right now we do syndicate deals. So we have some deals that we make very good money, but and we have our assets and our paid-off properties. But so we wanted to take the next step in complexity, the next step and leverage the next step in personal growth. So we -- Michelle: Exactly, I think our investing has really followed our own personal journey, you know, of development and growth. So Jack: Right, so one of the things, so we started buying these properties. And the first one, we realized, we syndicate it with our investors. And then the second one, the first few we syndicate investors. As a matter of fact, the first one we came in as a junior partner. So we raised the thing, the guy that couldn't raise all the money. And the moment he was about to lose this deal and he basically said, like, if you guys raise half of the money, you get half of the deal, which is obviously a great, great deal. I've never come across that. Michelle: And we're gonna learn how to do it, as he has been doing this for many years. I'm like, that sounds like a perfect situation. Jack: But we also needed to put in $80,000 in escrow deposit, which we could have lost. So it was, he asks for something and he gave something, was a great deal. So we came in, we ended up raising 60% of the money. And doesn't matter, we didn't get more than 50% of the deal. We got in we learned a ton and then we started doing this on our own. And the first few deals like there was just, we have a lot of income, but we have like your cash availability is not always $3 million, right? So we basically looked at it as like we needed $3 million. Let's put some money in ourselves and let's raise the rest through syndications. So we did a syndication for the last few deals. And at some point of time, we might transition into doing deals without investors, the reading hold on for the long term, 10, 20, 30 years, and then our daughter can potentially then inherit and she can keep them or sell them and upgrade them and so on. But in essence, it's a way to, what attracted us to it over the single families is that there's another layer of management, another layer of separation between us and the actual issues on the problem. Michelle: Yes, because now all of a sudden, you know, when you're looking at 100 doors at a time, and that scale allows you to have you know, on the ground, a full time, you know, leasing person, a full-time person for repairs or maintenance. Another one that is turning units around, you know, we have the regional director with, you know, with the property management. And so for us, it's really a lot of asset management, but not the everyday thing of like, would you approve, you know, the repair on a toilet or on this, small things-- Jack: Which, today, I got two more in our single families because they have an authorization limit of $500 on me there because I don't trust them with more. So on a single family, so everything over $500 goes to me, which is literally something three or four things a week that happen especially in summer when it's hot, and AC breaks and so on, that are just like driving me crazy. Because every single time it's like they don't give you the information you need. They don't give you the details you need, you have to jump on the phone call, you have to email back a few times. They don't follow the instructions and how to submit it versus when you operate on a larger property, you can distance, you're removed from these things. You get a status report, you can dive in with your expert partner on the deal, I mean, the regional manager into it. And more than anything, the other thing we realized is you very well know, you can force appreciation and you can force value increase rent, which on the single-family house, you can just, you just cannot do. Michelle: Yes. And elevation is not based on the income but it's fixed but based on other properties. James: Yes, yes I always say that you can build a house, painted with gold, on real gold but the value is still going to be following the other houses surrounding it. Jack: Exactly. James: Are you guys using the depreciation from multifamily to offset the active income on your land? Jack: Yes. Of course, yes. Big time. I mean we -- Jame: That's double right. Jack: We have done on all the units we have, we have done the cost segregation study, and it is literally. Michelle: It shows a lot of the profits from the land flipping even from the educational business, you know, it's a very purpose-driven business for [inaudible 0:54:03] and it throws a nice chunk of cash. And I'm like, we need to, you know, protect that. And so we're, it feels like, you know, with apartment investing, we get to have the cake and eat it too, in terms of, you know, getting the cash flow in. Jack: We get cash flow, we get income, any cash flow, we get appreciation and we get the tax benefits that wipes out almost the entire income of the other things that we do. So it's a it's like a dream come true. Yes. James: Yes. So you want to consider real estate professional, not because of the land, but because of that single-family homes? Jack: Because of really everything I mean, Michelle: That's all we do. James: If you do just land, are you considering real estate professional? Jack: Yes, the land is real estate. As a matter of fact, I always say that when somebody says I've never dealt with land, only do houses. I said like, it's actually I said, it is actually an incorrect statement. Because you have never bought a house -- James: Without the land? Jack: What you buy is the land and the house on it. James: Yes, correct. Jack: That's truly a land transaction that had a house on it. The legal description of the property is not the house, it doesn't say it's a four-bedroom, three bath house, no, you're buying this lot, lot number 23 with whatever it happens to be on it. And what is on it is a luxury house or a dump is just defines the value differences. But so with a real estate professional, doesn't have to be defined by analysis, or commercial, or you can be land too James: Got it, got it. So let's go to a bit more personal side of it. So no technicals? So why do you guys do what you do? Michelle: I think for me, you know, in the beginning, it was about us having freedom of money, time, you know, relationships. And right now, it's about freedom of purpose, you know. It has you kind of like, you know, when you're struggling, somebody is listening to this, they're struggling, or they have a job they hate or whatever, the very first thing that you look at is how can you take care of your immediate family? When you have that taken care of, then you start looking at, okay, how can I, you know, start, you know, helping them my church or helping in my community or helping on a much, much larger scale. So for me, you know, a lot of my, you know, what drives me right now, and my purpose and my why is to become a mentor and a leader. You know, for other women to start investing in real estate, to start, you know, having their money work for them, for example, and set an example, you know, I want to be a hero for my daughter. And I want her to also grow into a lady that you know, knows how to manage your finances, that is very comfortable with investments, whether small or large and so on. So, Jack: For me, along the similar lines, I remember the year 2007, when we were and we had accomplished our first major, big financial goal, which was a certain number, I feel everyone has their number and goal in mind. And we had just moved into a gorgeous, semi-custom home that we designed from scratch up and all of a sudden, we're like, you reach those goals, and you almost like fall into a hole. And we fall in that hole because you expect to be like all candy and rainbows and everything and unicorns, but actually the quite opposite of that. But it's like for a moment you celebrate and then you're like, what now, right? So we basically sat down and was like, okay, so we can sit down now and we can go retire in essence, we can go sit down, we can do nothing. But we realized, for example, there's a charity in Michelle's home country Honduras, that we said we could go work in charities, in charitable work. But we realized, we're really very good at getting businesses to a profitable stage, we're good at kind of creating money, Michelle: That's kind of like our genius. Jack: And so that we are not the person that's going to live in the Honduran in rain forest jungle and feeding the poor, so but it's close to our heart. So why don't we stick to what we love doing Michelle: Our strength. Jack: So that we generate the money that we can be more impactful in those kinds of things. And as a side thing, I love real estate, I mean, I don't see myself not doing real estate ever. I mean, I hate it the entire the IT industry. I'm not personally involved in the continuous development of our software, because I'm kind of scarred from that time in the IT industry. I get involved into the what the vision is of it, but, and then we have a great guy that drives the implementation of these things. But we focus on deals, we focus on and if I can focus deals for the rest of my life and opportunities then I'm a happy camper, it's just what I love doing. So and it throws off money and that allows us to help more people, that is awesome. Michelle: And be transformational in the way, you know, and the way we treat our investors and the way that you know, people that want to participate in our deals. Jack: So the teaching side of things, we started the teaching side of things also kind of like almost like a mission kind of the point of view that not that we need the rest to save the world. But there are so many people out there that do real estate either the wrong way or that they don't know that there's an easier and simpler way that you can do real estate. And learn and grow build the confidence and capability in your life that then allows you to do whatever the heck you want to do afterwards that we feel like I was called to teach this and show the land flipping part of things to people. So they can also get on their own feet. And we have had years where we lost money in that business where we put it on their own pocket for and it was still fulfilling because we see the difference that it makes in the people's life. So we were committed and our core values are to be transformational. Michelle: Yes. And it's not just walking a person through a deal by really sculpting someone's spirit you know, someone's confidence, someone's courage through the process of a real estate deal. So it's incredibly rewarding work for sure. James: Okay, okay. So why don't you tell about how to find you guys. How can the listeners find you? Jack: Easiest way to find us on the land flipping side is to go to landprofitgenerator.com and you can also go to www.orbitinvestments.com, there's a link over to the land flipping side. There's a couple of other links on too. James: Okay. Michelle: I'm on Facebook Michelle Bosch, Instagram michelleboschofficial. Jack: And again on the land site we since we don't teach the apartment complex things, you do that. We have no educational things about that, we just, we do syndicate with investors. We do probably similar deals and but on our website like all the educational things all about land flipping. So we have a Facebook group called Land Profit Generator Real Estate Group. So everything we do on the land side is called land profit generator. So you look for land profit generator, you find us and orbit investments is more like the overall holding company above everything else with links to all the different pieces that we do. James: Awesome. Well, Jack and Michelle, thanks for coming in. I learned so much and I learned what I didn't miss too, but I'm sure the listeners learned a lot of things from today's podcast. Thank you for coming in. Michelle: Thank you so much for having us, absolutely. Jack: Looking forward to seeing you at the next mastermind. James: Absolutely. Thank you Michelle: Thank you, bye.

[11:15] Lunch with my super agent and friend, Eugene Foley [12:15] A not so good experience at a hotel in Meherrin [25:10] The life-changing Prison experience that Larry went through [30:52] Listen to the song that started the James O'Connor Agency “Connected” Early morning of October 14th, Columbus Day. That's when I left Nashville headed to Virginia to start off my prison ministry. My first stop was Pamunkey Regional Jail. The check in time at the prison is 12.00 noon, so this gave me enough time to get myself ready for everything. [2:35] Preparation for the show There was a lot of nervous energy when I was preparing myself for the show. To begin with, the whole prison environment takes a bit of time to adapt to, so many steel doors, tiny rooms and new faces. My guitar even ended up falling off the hand truck in the load in process. The guys were in a room, something like a lunch room. Rectangular shaped with seats everywhere, and they were all staring at me while I was setting my equipment up. It goes without saying that this only made the setup time very intense, and I could feel the sweat rolling down my back. But I kept cool throughout the whole process, no one could tell what a bundle of nerves I was. [5:40] Performance at the Men's Section I started off with a couple of songs and then started to work in some of the stories. The stories were all revolving around the setlist material that I chose. This included some of the inspirational and Christian songs that I've written. I was telling the stories in between the songs. This played a role in helping them understand the experience of what the songs are all about. The entire performance was generally great. There were a few challenges of course, such as one inmate who kept talking to his friend while I was performing, but at the end of it all, I had earned not just their undivided attention, but respect as well. I ended the show with a bit of interaction with the guys, while I passed out some Dharmic Evolution Podcast business cards. I promised to keep them entertained when they get out, and are back out on the open highway.   [8:42] Performance at the Ladies' Section ‘'Where are the ladies?'', Said I. You can imagine my surprise when Jeff, the prison assistant told me that they were in another room. So, this meant that I had to pull down everything I had set up, and move it to where I'd be instructed, and then set it all up again. (where are my roadies when I need them!) It took a while, but I broke the Ice with the ladies and everything was flowing in no time. I did the whole performance sequence all over again, and it felt really great because I'm certain that my message did reach out and touch them. After the performance, it was time for me to say my goodbyes and call this visit a success.  [15:20] Jail 2: Meherrin River Regional Jail I headed south towards my second destination for the journey which was Meherrin River Regional Jail. My first observation of the place was how strict they are. On arrival, I met this tough lady who wanted to inspect every single thing that I had with me, bags, cables, boxes, key etc, lock up my phone, keys, etc. So, I went outside and reassessed the items that I had with me, and only took those that I essentially needed, and placed them on a cart. Afterward, I was shown my way to the performance platform by the Major, who was in charge of the facility. This stage was slightly bigger than the first performance platform at Pamunkey regional jail. And, because everything at the prison has to be done in its allocated time, I quickly set up my gear. The only alarming thing about this gig though, was that I had to do four sets, back to back. I hadn't sung four sets in a while. And given the fact that I was a solo, and not as young as I used to be, I knew this was going to be an uphill task. I had a bit of a similar experience like I did in the first tour. While I was performing, some guy was busy engaging his pals in a conversation. I didn't let it get to me though, I ignored it and kept performing. At the end of it, the whole crowd was jazzed up! Everyone in the backrow was bopping and dancing in their chairs, clapping their hands and singing the chorus. And once again, I had them! When the performance was over, some of them came to me, shaking my hand and thanking me for the experience. Personally, it meant the whole world to me that I had some kind of impact no matter how small or how great. So wrapping up this experience, I would say that on a whole, it really could not have been a better kickoff for this new extension to my artistry, the JKO prison ministry has been baptized and is alive and well.  Thanks for your support! James~ Thanks for joining us, and be sure to connect with us on social media! Follow our Host: www.thejamesoconnoragency.com Facebook Twitter Instagram Follow our Podcast www.dharmicevolution.com Check out our YouTube channel! Join our community on dHarmic Evolution Community Facebook Group  

There are some businesses I wished I'd created. Sendle is one of them. It's disruptive, fun to use, and solves a painful problem us small business owners have. Today we meet founder James Chin-Moody who tells us how he's done it.   A little bit more about Sendle co-founder James Chin-Moody ... For the past couple of decades, Sendle founder James Chin-Moody has had an impressive career in anything but small business, working for the United Nations, the CSIRO, even the Australian Bureau of Statistics. For eight years he was a judge on ABC TV's The New Inventors show. Then finally, just a few short years ago, he saw the light and started a micro business that would soon become Sendle … an online-based parcel delivery service that is taking on the monopolistic Goliath that is Australia Post. Sendle has already been voted Australia's Best Courier service 2-years in a row, and employs over 100 staff and has experienced 40 months straight of 15% growth. Now full disclosure … I love Sendle. I have no financial interest in it, but I love it. I love what it stands for, what it does, its user interface, the fact that it's hugely reduced the price of sending a parcel to anywhere in the world, and the time it takes, and the fact that it's disrupting a staid old business in Aussie Post. So please excuse my embarrassing fan-boyishness that I display throughout this chat.   In this wide-ranging interview James Chin-Moody shares: Where the idea for Sendle came from How he got Sendle to market What Australia Post's reaction has been Why “Hell yeah” is his major decision criteria Why focusing on few marketing channels is best How focus speeds things up How he's created a simple, reliable, affordable solution for sending parcels And plenty more ... “We spend all our waking hours figuring out how to make parcel sending a joy and not a chore.” -James Chin-Moody, Sendle Here's what caught my attention from my chat with Sendle's James Chin-Moody: I love how James uses extreme examples to get the point across of how good Sendle eg. We can deliver a packet of Tim Tams to Everest Base Camp for just $10!” or “We've delivered 4 light hours of parcels so far!” What's an extreme way you could describe the effectiveness of your business? I love how the Sendle team's decision-making process is either a Yes, No or Hell Yeah! And I love how they're constantly asking “How can we make sending a parcel less of a chore and more of a joy?” In order to optimise their customer's experience. Choose fewer marketing channels and be really good at them.   “We've delivered four light years of parcels or thirty times to the sun and back!” - James Chin-Moody, Sendle James Chin-Moody Interview Transcription Tim James Chin-Moody. Welcome to the small business big marketing show. James Thanks for having me Tim. Tim I'm going to be a little bit of a fan boy. So you'll have to excuse that right up front. I love the Sendle brand. Click Here To Download Full Transcription Resources mentioned: Sendle's official website Last week's interview on how to build a business podcast with Nigel Morris This week's Monster Prize Draw winner is Faouzi Daghistani of Newlands Pizza in Coburg   Please support the following businesses who make this show possible:   Authentic Education Learn highly effective marketing strategies directly from the co-founder of a BRW Fast 100 Company at events that are happening around Australia in June and July 2019.   American Express Business Explorer Credit Card Let your business expenses reward you. Every year.   Yellow Partner with Australia's #1 online business directory for all your digital marketing needs.   Switchnode Australia's Internet isn't great. That's why Switchnode exist. The solution is here and it's wireless.   If something in this episode of Australia's favourite marketing podcast peaked your interest, then let me know by leaving a comment below. May your marketing be the best marketing. [For more interviews with successful business owners visit Small Business Big Marketing] See omnystudio.com/listener for privacy information.

Change is scary, and yes price trends do matter in the online marketplace, particularly if you are in the market for buying or selling a business. Today we're discussing the frightening possibility of tighter margins, particularly for Amazon businesses, as a result of the most recent US government tariffs on Chinese products. Here at Quiet Light, we get a lot of questions from buyers regarding what we can expect from the Amazon marketplace now and in the future. The reality is that entrepreneurs need to learn to see these changes as par for the course as well as opportunities for growth. The internet today is so much different than it was 11 years ago when we started Quiet Light Brokerage. In fact, we started the same year the first Iphone came out  – to give some perspective on just how much things can change! When it comes to the geopolitical nature of e-commerce, specifically as it relates to the US, who better to bring in than a Canadian? Today's guest, James Thomson, is a Partner for BuyBox Experts, a managed services agency specializing in marketplace management for brands, manufacturers, and resellers. He was formerly head of Amazon Services, the division of Amazon responsible for recruiting tens of thousands of sellers annually to the Amazon marketplace. He's crazy knowledgeable about everything Amazon. We're talking all about the tariffs and their potential impact on the e-commerce marketplace. Episode Highlights: What tariffs are coming out and what tariff trends are going to affect business? Impact on first party sellers. Ways to work with and around these tariffs. How the manufacturers in China will see that they can suffer too. The length and scope of the tariffs' impact will have a lasting effect over time. Parallel imports may happen eventually, creating retail arbitrage. The foreseen impact for third party sellers. How the tariffs are creating more incentive for Chinese manufacturers to become sellers and sell products directly to customers in the United States. We discuss the consequences for Amazon sellers holding inventory. How Amazon monitors expected sell through rates to deflect inventory increases. Things sellers should keep in mind in order to keep their buy box percentages up. Indicators that there may be opportunities for competitors like Target to swoop in in certain spaces as early as the end of this quarter. If the tariffs prevail, one year from now will be the time when the retail increases will  show. What countries might be viable alternatives to China as suppliers and when to start investigating those avenues. The people who end up capitalizing and doing well in situations like these are the ones that look at these problems as opportunities. Transcription: Joe: So Mark I just launched a listing a couple of weeks ago. It's under contract already, multiple offers, it went very quickly. Actually, it's a re-launch because when we launched last year it didn't sell because of flat trends on the top side, slightly down on the bottom side and we pulled it. And the owner of the business implemented all the growth opportunities that he wrote about and now business is up 27% so it went under contract very quickly. So for those people that are listening that don't think that trends matter they definitely do because eight months ago no one wanted to buy this. Eight months later it's under contract in what was literally like four days. And I can't say the price of course but the thing that I wanted to touch about in regards to that is that he's importing products from China and the potential tariffs have changed since we last listed the business. And so we addressed that in the client interview. We're trying to stay current with it and he has a person through his manufacturer that helped him with the proper coding of the brands. And there was a slight increase in terms of the landed cost of goods sold but it was so minute it really had no impact on the discretionary earnings or profit. And I think that this is a topic that we need to address more and focus on in our client interviews and make sure that the sort of scary possibility of tighter margins is really looked into because not everything is going to have an increase and those that do it may be so small that is a very tiny percentage of that landed cost of goods sold. Now you just had an expert on to talk about it, our old friend James Thomson, right? Mark: Yeah absolutely when it comes to US issues and the geo political nature of e-commerce specifically as [inaudible 00:02:27.4] the US who better bring in than a Canadian? So, James Thomson, he is the first account manager within Amazon's marketplace. He's the co-founder of Prosper Show. He's a principal owner over at Buy Box Experts. The guy … I mean he's crazy knowledgeable about everything Amazon. And so we've been getting a lot of questions from buyers both on deals that are under offer right now and also from people just kind of trying to understand the landscape, what are we looking at here with Amazon in the future. So I thought let's go ahead and bring somebody on. Let's talk about it. Let's kind of dissect this. And he said a couple of things which are really really important about this and I'm not going to give all of it away because I need to tease of course so that people can actually listen to the entire interview but a couple of things. One, the nature of business is always changing. I mean the Internet today is way different than what it was when we started Quiet Light Brokerage. I'm actually just … I'm putting together a presentation right now for Ungagged coming up here soon early November and I'm taking a look back to when I started Quiet Light Brokerage. We started Quiet Light Brokerage the same year that the iPhone first came out so … I mean that's how much things have changed in just 11 years. Joe: Wow. Mark: I know right. So I say that this Quiet Light Brokerage was the biggest event of 2007 followed shortly after by the iPhone of course. Anyway let's get into the point here, James and I talk a lot about why are the tariffs in place, what is going on with these tariffs, what is the future of it look like, how is it going to impact e-commerce business owners, what's the hope of the US government with these tariffs. And I'll cut to the chase there the hope is that people start buying from other countries and most importantly what should you be doing about it. And on one thing that I'm just going to say here, I reiterate this at the end of this discussion with James. These sort of changes need to be looked at as opportunities among people who own businesses, among entrepreneurs. I've been an entrepreneur for 20 plus years now and the nature of the internet is constantly changing. Those who are looking at these changes and saying there is opportunity here, I have a great opportunity here to be able to adjust to the changes, find a new problem and solve that problem they do really really well. They're the ones that are absolutely killing it. Those who take a look at stuff like this and get all scared they end up leaving and not continuing onto the world of the Internet, their entrepreneurial career. So this is an interesting topic, very relevant to our time right now. Definitely, take a listen to it and then James also offered an email address if you have any questions for him to be able to speak about it. He's got a couple of really practical solutions that you can implement right away to be able to absorb some of these costs both in working with the factories and manufacturers in China but also just some very simple things that you can do on your side with your product launches and your products coming out to be able to pass this cost on. I'll say one more thing and I know I've talked a ton here; I'm kind of all around the place here. And I think it's really important to understand that everybody is facing these problems. When your costs go up 10% it's not just you, it's all of your competitors are seeing the exact same things. So it's a matter of how do you absorb those costs, how do you plan to be able to compete with that, how do you address your Amazon account so that you're not getting … losing your buy box share so on and so forth. Pretty simple stuff but you do need to have a plan. Joe: Yeah and I think you and I have been around long enough that we know it's not the end of the world, it's just another hurdle that an entrepreneur needs to get over. Get over the hurdle. And knowledge is power. If you learn about it, focus on it, and if and when you decide to sell your business you'll have that knowledge and you'll be able to address and tell people how you addressed it. And for buyers, same thing learn about it. Not every category is going to have an increase in tariffs and increase in cost of goods sold. So James is very bright, one of the smartest guys in most of the rooms he's in so I am looking forward to listening to this myself. Mark: James welcome back to the Quiet Light Podcast. James: Thanks for having me, Mark. Mark: All right so let's start off with just a quick introduction as to who you are. You have been on the podcast once before. I'm going to let you introduce yourself as far as your background … especially your background with Amazon and Prosper Show and Buy Box Experts. James: Right. Well, I'm James Thomson. People may know me as one of the co-founders of Prosper Show which is an educational event for large sophisticated third party sellers on Amazon. I am also the partner for Buy Box Experts which is an advisory and account management company at sports brands on Amazon. And I spent almost six years at Amazon doing a number of third party related responsibilities including running Amazon services and being Amazon's first FBA account manager many many many years ago. So thanks for having me back on again. I'm looking forward to talking about the ever increasing challenges of being a successful seller on Amazon. Mark: Well, I'm going to admit this is a show that I have been sort of dreading to do. James: Yeah. Mark: But it's really necessary and I know we've been starting to see more and more questions on the whole issue of tariffs. Before we jump into it real quick I am just going to give a shout out to Prosper Show. We go to a lot of shows at Quiet Light, Prosper show is awesome. If you're selling on Amazon and you're looking for a show where you can actually learn things and make good connections check it out, Prosper Show, what we're going to be there next March probably with all the booth and all that so. James: Thanks Mark, thanks. Mark: The thing is I'll make it for you because it's worth making. And also I don't want to talk about tariffs but let's talk about tariffs. And as everybody knows we've had one round of tariffs slapped on a lot of products coming from China, 10%. There is a threat of more tariffs coming out in January. And I'm going to fess up publicly to everybody to say I've really been kind of putting my fingers in my ears and saying I don't want to know about this, please make it go away. Let's get everybody up to speed on this as far as the tariffs that are coming out and what the general political landscape is that we need to be aware of in moving forward. James: So just to be clear I'm Canadian. I don't vote in the United States. I don't get to decide who does or doesn't make decisions around the tariffs that are going to be charged. But for folks that haven't been paying attention Mr. Trump is dealing … or has decided to enter into a tariff war with the Chinese around basically what dozens and now hundreds of products that are manufactured in China will be slapped with rather significant tariffs when they're imported into the United States. As many the people listening in today will know these private label sellers gosh we have a lot of stuff made in China that ends up being consumed and sold here in the US. So I work a lot with private label sellers who are saying gosh I thought I had the opportunity to make some decent margin being a private label seller but now that my products that are coming in from China with this extra 10%, 15%, and possibly 25% tariff depending on what specific type of product you happen to make, gosh that's an awful lot of money and I can't really absorb that long term without it destroying my financial situation. So what do I do? I think to tackle this problem we should split it into two parts. There are going to be those companies that wholesale products to Amazon. We'll call that the vendor central relationship and then there's all of the companies that are using seller central to sell those products themselves; two very different situations. Let's start with the … either one is really very easy but let's start with the vendor central situation. If you are a brand and you are bringing products in from China and you're turning around your wholesaling to Amazon … not surprisingly Amazon doesn't buy price increases and they don't really care about your profitability. That's your problem and so if you're now faced with an extra 10 to 25% COGS … 10 to 25% of higher COGS, absorbing that amount unless you're making insane margins most of us can't absorb that kind of money. And so the question then becomes A. can you get your manufacturer receipts absorbed? Some of that in cost reductions and we've definitely seen some situations where some of the overseas manufacturers are willing to make certain price concessions, especially if the North American sellers are buying the inventory in time to be able to avoid some of that initial tariff. So if you're prepared to load up on some of your inventories, if you load up on your inventory now then next year are the first lot of x-tiles and units your Chinese manufacturer may absorb some of that extra cost. Because the reality is the Chinese manufacturers they're also going to suffer through this. It's not just the American brands, it's Chinese manufacturers that also recognize that there isn't going to be as much demand unless they absorb some of this cost. Mark: Yeah and let me just make a point here real quick. I mean the goal of this and the Trump administration has been pretty clear, the goal of this is to get China to change some of their policies towards the US. And so they're literally trying to disincentivize business owners importing from China you know a lot of these 1P and 3P as you put it, the vendor central and the other people selling through Amazon to buy from other countries. And so they're going to make … through these tariffs they're just making business more expensive for everybody. And ideally, there is going to be this internal pressure from the Chinese manufacturers on their government to be able to change some of the policies of the US. That's kind of big picture. James: The problem is … and I speak anecdotal experience, I live close to the harbor in Seattle and I see all the used tanker ships come in and more than half of them come in from China. So if I think of all this product that comes in that we consume here in the United States is being manufactured overseas if more than half of that's being created in China the reality is our overall cost of buying stuff, whatever it is … plastic stuff, apparel, whatever … it's coming from China. And so unless some of these other countries can very very quickly not only ramp up production but more importantly identify themselves to companies here in the United States that otherwise buy from China, unless they can do that and find a way to say hey come and make your products over here instead of in China, the reality is this is going to take a while and some of this pain around higher costs is going to affect both the manufacturers in China, companies here in the United States, and of course consumers in the United States if in fact some of those costs overruns or pass through as higher resale prices. Mark: Right and just to be clear I'm not a geopolitical expert by any means but China has been pouring money in subsidizing their manufacturers for a really long time to be able to ramp up production levels that can provide basically manufacturing services to the entire world. That's why their economy has really been juiced up to where it is today. So for people to look elsewhere to other countries it's going to be darn near impossible for somebody to find prices that can be matched in other countries that may be seeing this as an opportunity. And even if a country does pop up for a particular industry it's going to take years for the capacity to be able to grow up to the level where we really need it to grow up to. James: Yes. Mark: So this is a problem. Let me ask you a question on this real quick and I want to get into specifically how Amazon is treating this as well. You started to get into it. I think it's going to be an interesting conversation but isn't this going to affect everybody the same way? And at the end of the day I mean it's the consumers that you would think are going to be left on in vague. If there's a 10% tariff on Blue Widgets, all the Blue Widget sellers have to pay that 10% tariff. James: Yes. Mark: So eventually their cost is up so they're going to have to raise the prices as well. Is this really going to impact the businesses themselves in that way since they could in theory pass that cost on? James: So there are a couple of things here, and different people go to market on Amazon with very different distribution approaches. So if you are buying product overseas, bringing it in into the United States and turning around and trying to wholesale it to Amazon through a vendor central account, Amazon has made it clear they do not accept price increases. This is your problem Mr. Brand; you need to figure out how to absorb this. So what I see happening is some brands will say gosh this is inconvenient right before Q4 our biggest time of the year. Some of these brands will say you know what, as much as we hate to do this we will suck it up and we will absorb this cost. And so many of these manufacturers will end up with much much smaller margins while Amazon continues to have the product at the same price that it had and some consumers won't see a price increase on those items. Unfortunately … and that's fine short term but long term these manufacturers are going to say unless I can find cheaper sources of manufacturing elsewhere I'm no longer going to carry these products or I'm no longer going to sell them to Amazon 1P or I'm actually no longer going to sell them anywhere on Amazon; that's one option. There is another type of distribution model that's very common on Amazon which is the product diverter, and I'm not passing judgment on the product diverter, the reality is there's a lot of product diverters on Amazon; companies that gray market source products. And so the opportunity for companies to go and proactively can parallel import and bring in products from let's say Europe that came in from China nut they're now coming in from Europe … I see an, potentially in some categories there will be a significant increase in parallel imports because somebody can buy that product in another country and to the extent, they're not necessarily answering all the questions correctly about where these products are manufactured there will be more opportunity and more incentive for companies to do parallel imports. Again so as to be able to bring products in at a cheaper price than what they would otherwise be paying if they bought directly from China. Mark: Is that illegal or do you literally have to be lying on your forms in order to be doing this parallel importing? James: Oh please deter, I'm not suggesting that anybody does this. I'm just saying I fully anticipate this is going to happen. Mark: Sure. James: And so if the other thing is if the tax … if you can ensure the tax has already been paid at least once there may be opportunity for you to capitalize on nonetheless being able to re-import it back in and be able to source it. Brands don't like product diversion and so knowing in there will be an issue there for brands long term having their products … basically, people capitalizing on retail arbitrage across borders and getting cheaper prices in one place so as to capitalize on that. What is more likely is if there is a price discrepancy in another country and you can buy the same item in Europe for 10% less than you can here in the US, some folks may decide to … depending on the math, it may decide to start buying stuff indirectly just because they can capitalize on price discrepancies in order to make things work. The logistics are more complicated but in the end, they still need to make some money and they're prepared to take on these extra logistic steps just so they can make some money. All of this is short term because in the long run if a brand wants to continue to wholesale on Amazon they have to make money. That's what … it's why we're all here. And so what I anticipate happening is some brands are going to stop supplying certain products and they're either going to go and find production in other countries or they're going to find completely different products that don't involve China at all. And so that will mean that some products that we as consumers rely on … and I think for example all the Q4 toys that get sold in this country, the vast majority of them are made overseas and a huge proportion of those are made in China. And so it will be interesting to see specifically in the toy category what happens because with Toys R Us going out of business this year, there's been a lot of discussions that some of the other brick and mortar retailers are going to be very aggressively going after Amazon. If Amazon for some reason in most of the toys that Amazon gets come from 1P, if those manufacturers for some reason say you know what we can't make any money selling you these products we're not going to sell it to you because you're not prepared to take a price increase, we may have a situation where Amazon actually runs out of stock on an awful lot of top selling toys. Which is bad, bad, bad for Amazon. So I think the toy category of all categories is the one that may push Amazon short term to accept the fact that it is going to have to absorb some higher costs in order to have inventory on absolutely critical selection in Q4. Mark: Interesting, so let's move over to the 3P and I have also some questions maybe about competition to Amazon which hopefully we can get to but let's move over to the 3P. What's the impact that you see and I know we're all crystal ball in here but what's the impact that you see for 3P sellers? And 3P for anyone that doesn't know this would be FBA merchant fulfilled, anybody that is not selling vendor central but still selling through [inaudible 00:18:43.2]. James: I'm going to separate 3P into two groups there's the resellers and there are the private label sellers. If I'm a private label seller and buying stuff from China I make the decisions myself on what pricing should look like. So if I have to raise my prices 10% to maintain my margins I can choose to absorb some of that for competitive purposes. But I always have the flexibility of saying I'm going to raise my prices. An important … a very tactical issue, let's say that you're selling your product for $25 today on Amazon and you added list price information into the Amazon catalog, you can't just raise your price from $25 to $30 to cover your extra price. You need to also increase your list price because otherwise, Amazon's going to flag you in selling products significantly above the list price and also press your Buy Box. So you've got to make both of those adjustments at once. As it relates to resellers the question becomes if you're buying from a distributor or a brand here in the United States that you're then turning around and reselling who's splitting the cost increases there? And that's going to differ widely on brand by brand. Some brands may already have a lot of inventory here in the US and they say well we're just going to ride this out and hope this tariffs disappear sometime in Q1 or Q2 in which case they're willing to … you know if they're using some kind of a lifo … I'm sorry a phyto model of inventory there may not be any price increases at all for wholesale pricing. And so the retailer can turn around and continue to sell the product at the same price. The problem is all you need is one competitor in the same space on Amazon the whole price is tight and not move prices up and if they've got lower prices and they're still doing the right thing with organic search and driving traffic they may end up with a higher proportion of total traffic on their products. Granted it's very low margined traffic but it is nonetheless higher traffic. And so the question is how long is any particular reseller prepared to take lower margins for the benefit of higher traffic which isn't necessarily high quality business. Mark: I mean in defense here we see this happen anyways where we have people come in and try to break into a market and will purposely go low margin just to be able to break into that market. But this is kind of who could hold off the longest with the higher prices. James: So there's been a very important development this week with Mr. Trump getting out of the postal shipping rate agreement with China. There was a significant subsidy that the United States was paying for overseas companies to ship products one order at a time into the United States. A lot of these individual orders today don't clear customs with any customs payments. And so if you got a 25% tax for example on those products, if they're brought in bulk but there's no tax on the individual orders, you don't also want to create a situation where there's that much more incentive for example for Chinese sellers to send products one at a time in the United States by removing some of these price subsidies on the shipping costs that will help to balance things a little bit. But you still have a situation where a Chinese seller can send an individual order into the United States and realistically most of those orders are going to get through without customs being applied on those on off envelopes and boxes. So in many ways, the tariff only creates more incentive for Chinese manufacturers to become sellers and to sell products one at a time in the United States. And so that continues to be a challenge. Mark: Let me ask you about a tactic that I've seen sellers employ here in trying to get ahead of potentially … I know there's threats of an additional tariff being imposed here coming January so possibly increasing the tariffs even more. And I've seen some sellers bulking up on inventory because of that; trying to get ahead of that. It has kind of a cascading effect though from what I understand if you're a 3P and especially using Amazon's fulfillment services. Does Amazon look closely at the amount of inventory that you're keeping with them and are there consequences for maybe having inventory sit on their shelves longer? James: No it was early this year Amazon evolved the way that they designed how much FBA capacity every seller has. And it has to do with the sell through rate of each individual skew that they choose to put into FBA. If you're selling a product that sells a thousand units a day, Amazon will let you put as much of that in as you want. If you're selling a product that sells one unit a month you can't load up five years of inventory. Amazon actually won't let you put that in the FBA all at once. And so as much as a seller wants to ramp up their level of interest they hold in FBA, Amazon will cap it based on their expected sell through rates. So if you happen to sell products that sell fast enough you're not going to be putting more than six months of product into FBA, great you may load up a little bit more. But if you start bringing in pallets and pallets more than you'll ever sell in the next six months, Amazon's going to put the kybosh on that. And you're going to have to figure out where to hold that inventory. So I think it's a system that basically corrects itself. I think it's worth a seller today if they're planning on doing this in the next four to five weeks they should create an FBA shipment right now to see if Amazon even allows them to put whatever level of incremental inventory into FBA. They may well say sorry we don't have that space because your expected sell through rate doesn't by any means justify the load of inventory. Mark: And I know a lot of sellers are using even a 3PL of sorts just to store Amazon inventory that they are eventually going to ship off to Amazon and that's … if you're not doing that and you store inventory for anywhere longer than a few months I think because of the storage rates you can get much better storage rates elsewhere but that's something to look at. James: So to that point if you do have to bring in an awful lot more inventory and hold the inventory so as to bypass the expected additional duties that come likely in January, one thing we may see is an increase in the number of sellers that decide to start using seller for full prime. And that's a mixed bag in terms of whether it's a good thing for sellers, in some situations they may be able to use the higher shipping costs that come with seller for full prime that may be adequately smaller to offset the expected cost of having to pay another 15% in a tax on imports. But you know we may see some … in certain categories we may see more sellers deciding to use seller for full prime in part because Amazon says you can't send that much stuff into FBA but you know we'll have to have to see what happens. My view is I don't see this tax staying in place indefinitely. I see this is a game of chicken between two countries. And quite frankly I think the United States has more to lose than the Chinese do because the Chinese low cost production capabilities in China will continue to be there even if those costs are a little bit higher now that there's tax added to it. And so reality is we Americans, we like cheap stuff and so if you go to the source of cheap stuff … and so I suspect at some point that there will be some counterbalancing that happens and it's a matter of how long can people hold on without going out of business. Mark: Yeah. Let's talk about the Buy Box a little bit. You touched on this earlier about things that you may want to watch out for if … when your changing prices on your site. What are some things people should keep in mind if they do decide to pass on some of those costs to the eventual customers at the end of the day? What are the things that they should watch out for so they don't lose their Buy Box percentages? James: Well the first one is you still … when you offer your product you want to make sure that it's at or below the list price. So if you're having to increase your price over whatever the current list price is today then you want to make sure that you can update the list price information. If you are a reseller of someone else's products and they haven't updated the list price then you're going to be in trouble because you can't sell that $30 item for $35 when the list price is 30. And if the manufacturer controls the list price or you as the reseller don't have brand registry ability to go in and update the list price you're going to be in a situation where you don't have the buy box because you've had to sell the product in a price above the list price. So start that conversation now if you don't have the ability to change the list price on a product you resell have that conversation now because you need to get that information updated. Otherwise, the brand is going to lose out to any other brand that has the ability to update their list prices. So even if the brand you're reselling doesn't want to do this you need to explain to them listen if you don't do this everybody that sells your product is going to be in a situation where they can't win the buy box which means the consideration of your brand or other brands is going to be significantly hampered. Mark: That's good advice. Let's move on to Amazon and their adjustments that they might be making on their side and also possible competitors. And I'm thinking Wal-Mart here who has been pretty aggressive in trying to eat in Amazon's market share. I don't know how successful they've been with their two day shipping on anything, no membership fees everything else. You've already described how Amazon is right now at least probably pretty unforgiving as far as price increases on them [inaudible 00:27:44.9] side. James: Yeah. Mark: Do you see any opportunity here for some of these competitors and even if it's not one competitor maybe that fragmentation of Home Depot taking care of their pit space and actually increasing their presence target doing the same, Wal-Mart doing the same, and have you seen any indication of this yet? James: Well what I have seen … I go back to the toy example, what I've seen is that both Target and Walmart are aggressively looking for ways that they can win in the toy space this Q4. And it only takes one or two of the big toy companies to tell Amazon 1P that they're not prepared to send any shipments unless there is some modification to the pricing. Unless that happens … oh, I'm sorry if that does happen then I think it could be a very painful Q4 for Amazon in a category that they actually absolutely need to win. But the problem with Amazon is they usually win anyways. The reality is if they can't get it directly from the distributor or the manufacturer they find a secondary source. They go and find a distributor that will unload a product at low margin, Or they will do parallel imports. So I think if these duties remain in to place for 12 months it's going to be next November or December that the pain is really felt by brands. Because right now a lot of them already have inventory, they already brought in to the United States. While they may have paid 10% extra duty it's not 25% duty but at the time you have long term 25% duty that absolutely is going to impact what their retail prices look like. So as bad as it may be coming out of this December if that tax remains in place for another 12 months that's when companies are going to have to say okay we're going to have to discontinue certain skews. We're going to have to launch new versions of the existing skews under different UPCs so that we can have new list prices on these items. I've seen situations already with some companies where they're already loading the 2019 version of an item with very slightly modified packaging but that's the product that's going to replenish the 2018 version that they're very soon going to run out of and have no plans on ever replenishing as long as the tax is in place; i.e 2019 version cost 25% more retail because everybody has to continue to make money doing this. Mark: Okay one of the things that we've been trying to educate people on especially in this e-commerce space there's a lot of people out there that want to find a couple of evergreen products that are just constantly bringing in cash. And then there's always the question of well how do you handle competition? When we brought it up time and time again now on this podcast where look good product based companies come out with new products on a regular basis and so that's actually … it's something I haven't heard before. That's a great way to be able to address this is come up with a 2019 version or a slightly different model version which your cost can absorb that new price and be able to work it out to the price that self. Last thing I want to talk about, let's assume that this does last for a while, you know a year or more. The intended effect is for US importers and retailers to move and look for other countries. So what are some of the countries maybe that people can start looking into. And I know it's going to vary industry by industry but what countries might be viable alternatives to China if people want to start looking at and look for manufacturers in different places that could possibly replace their current supply? James: I don't know how much I knew I can add to this. I mean a lot of the companies I know they look in Thailand and Vietnam today. Some of them look in Laos. I know the Southeast Asian countries, a lot of them have low cost production but they're not necessarily known for the sophistication of bringing together manufacturers the way, for example, Canton Fair does. And so I see an opportunity here for … let's say I'm the business development government organization in Thailand or Vietnam to the extent of they can put together a major event that will attract thousands of manufacturers and thousands of overseas buyers, I mean I see that as being rather significant. If you can spin up a Canton Fair like event or even a very small verison of that in one of these other Southeast Asian countries. Part of the challenge here is visibility. There already is an Alibaba that helps people find every Chinese manufacturer. Is there a similar concept in Vietnam and Thailand? To this point, it's nowhere near as visible and so it becomes something that basically has to be centrally organized either by large associations of manufacturers in country or potentially the government. And so if one of those countries is able to step up and do something like this and create visibility that will help. But let's be honest even if I said to you your product can be made in another country basically the same way starting today you're still looking at six months of testing and small minimum order quantities to verify and make sure that you have got the right payment structures in place. And so I would challenge everybody who's listening today if we're looking at a 12 month or a long term situation with this tax being in place you've got to start these conversations in January figuring out where is my alternative source going to come from. Because it's going to take time to work through and figure out am I really getting the same quality? Am I really getting the same delivery promises and so on from my overseas manufacturers that are now coming out of a different country? Mark: Yeah. So I've been an entrepreneur now for going on 20 years and the way … I would just like to close out here because some people might be hearing this and saying oh my gosh this is so incredibly scary. And what I want to say is this, these things happen. These things happen in business. The conditions change all the time and the people who end up capitalizing and doing really well are the ones who look at these problems as the opportunities that they are and figure out the way to make it work. There will be people who drop out. There will be people who do not pay enough attention to this and don't make the right moves. And so when we see these things rather than getting all scared and actually ironically enough this episode is probably going to air right around Halloween. I think we're going to publish it the day before Halloween and do our email newsletter advisory the day after … so you know a good timing for that. But to understand that there is definitely opportunity here. I think there's a couple of really good tactics. I think James you brought up just one simple one was just bringing up a new version of products that have and make them a 2019 version. That's a really simple type that we can have to see what's going to happen. And then also just have your ear to the ground as to where you can also find other products. So this has been really really enlightening. James, thank you so much for coming on. Where can people reach you if they have questions about this or honestly your work for consulting with Amazon sellers is unparalleled so if they have other questions even unrelated to this where can they reach you? James: I can be reached at info@buyboxexperts.com. All those emails go directly to me. And I appreciate your time today Mark. Mark: Yeah, absolutely. Thank you so much for coming on. Again James is one of the best in the business by far. Prosper Show check it out and then if you have questions feel free to reach out to me and I can do an intro or [inaudible 00:34:40.8] James. Thanks again for coming on. James: Thank you, Mark.   Links and Resources: Email James BuyBox Website Prospershow James's LinkedIn James's Book on Amazon

LeBron speaks out to a group of third graders in Akron, Ohio and thanks them for their support in making them the man he is today.

LeBron speaks out to a group of third graders in Akron, Ohio and thanks them for their support in making them the man he is today.

First up, a more in-depth conversation about some of the Comic-Con trailers. Then wide-ranging chats about James Corden, Corn Flakes, nude dating shows and of course, the brilliant Stranger Things on Netflix. Legion (X-Men TV Series) Sherlock Season 4 Teaser Once Upon a Time Season 6 Teaser American Gods Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. Details this week Correspondence and Recommendations:- The Televigion Mum found  Michelle Obama Carpool Karaoke  Inside the Factory: Episode 1 Cereal on BBC2 Full Steam Ahead Episode 1, BBC2 and suggested a new category Room 101, and the first show to go in Judge Rinder (Inside the bizarre world of ITV's Judge Rinder from RadioTimes) Very Special Correspondence from Gauntletgirl The Girl from Ipanema: Brazil, Bossa Nova and the Beach BBC4 Roadies on Amazon Prime Republicans Don't Like Game of Thrones Naked attraction: the apocalyptic rise of nude dating shows Cyberman 151 recommended Brain Dead on Amazon Prime James Walker loved Bojack Horseman S3 and sent a great article about it On the Underwater Episode Current TV:- The Late Late Show with James Corden, Now TV/Sky on Demand Borderline Channel 5, Tuesdays 10pm "On Demand"s My Attention:-  Stranger Things, Netflix Gold Star:- Stranger Things for both Rachel and James Disappointment:- Sherlock Season 4 Teaser for James Once Upon a Time Season 6 - Aladdin Teaser for Rachel Top of the Pile:- Zootropolis on Blu-ray for Rachel Brain Dead for James Thanks for listening!

We have returned! There's a new on-demand service in the Televigion household, some thoughts on American TV commercials and a discussion of the trend for cinematic universes (inspired by thoughts of the new Star Trek series).  Here is the Paul Feig interview about Ghostbusters from Den of Geek. Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. Details this week Correspondence and Recommendations:- The Televigion Mum found Brexageddon?! on BBC2 and recommended it Very Special Correspondence from Gauntletgirl Tot trumps: kids' TV shows that are secretly brilliant from The Guardian  The Bun Also Rises: Why We Love 'The Great British Baking Show from NPR Recommendations for Bite This with Nadia G on The Food Network and UnREAL on Amazon Prime (article about UnREAL here James Walker gives us the great news that James Corden's The Late Late Show is coming to Sky in the UK and that Crazy Ex-Girlfriend is on UK Netflix! "On Demand"s My Attention:-  Crazy Ex-Girlfriend (Netflix) Grey's Anatomy (Now TV) Murder in Successville (BBC Three) Fascinating article from the Guardian discussed in the episode Current TV:- New Blood Thursdays, BBC One Gold Star:- New Blood for Rachel Murder in Successville for James Disappointment:- None Top of the Pile:- Grey's Anatomy for Rachel Crazy Ex-Girlfriend for James Thanks for listening!

It looks like episode 40 is a season finale, but the hiatus is only two weeks long. We chat the chat shows and love the social media contact from the team behind surreal BBC3 comedy Big Field (Darren Dutton Jonny Roberts Alison Ward). Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. Details this week Current TV:- Mum BBC2, Fridays at 10pm Game of Thrones S6, Sky Atlantic, Sunday/Monday The Living and the Dead, Tuesdays, BBC One, 9pm (all episodes currently on iPlayer) Preacher Amazon Prime, new episodes every Monday "On Demand"s My Attention:-  The Larry Sanders Show (DVD) Whitechapel (Netflix) Correspondence and Recommendations:- The Televigion Mum found this article from the Telegraph about the Mum finale. Very Special Correspondence from Gauntletgirl From EW Actors and creators mourn the loss of their shows gone too soon From The New Yorker How Silicon Valley Nails Silicon Valley From The Guardian The Evil App that Sends Spoilers to Your Enemies   James Walker recommends Taskmaster S2 on Dave The Televigion Bonus mum recommends The Disappearance on BBC Four Gold Star:- Game of Thrones S6 for Rachel The Living and the Dead for James Disappointment:- None Top of the Pile:- The News for Rachel The Larry Sanders Show for James Thanks for listening!

Do you José? He is our attempt to bypass the recommendation filters of Netflix, but we ended up on iPlayer instead. We found New Blood and Love, Nina. And soon we'll be able to find the surreal comedy of Big Field from BBC3. Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. Details this week Correspondence and Recommendations:- The Televigion Mum is a Mum fan and recommended Power Monkeys - All 4 thanks to Ayda Field (which reminded Rachel of this Robbie Williams moment)  Very Special Correspondence from Gauntletgirl has some thoughts on Upstart Crow (all on iPlayer but it is not a BBC One show as James thought!) and sent this fascinating New York Times article that requires more discussion next week, so give it a read! Can Netflix Survive in the World it Created? James Walker posits an app for those behind on their Televigion viewing and we steal it for the inevitable Televigion app. Current TV:- New Blood BBC 1, Thursdays, 9pm Mum BBC2, Fridays at 10pm Game of Thrones S6, Sky Atlantic, Sunday/Monday Preacher Amazon Prime, new episodes every Monday "On Demand"s My Attention:-  Whitechapel (Netflix) Best of Enemies (Netflix) Here is the article interviewing the film's editor from the Televigion Sister Chaos on the Bridge (Netflix) Bedtime Stories - Tim Peake (CBeebies) Gold Star:- Mum and New Blood for Rachel Best of Enemies for James Disappointment:- The shock of Joséing for Rachel Upstart Crow for James (but only just) Top of the Pile:- Mum for Rachel More Netflix documentaries for James Thanks for listening!

We enjoyed the article Breaking Bad to House of Cards – Netflix finally reveals its binge scale and think more about the terms of Televigion before moving on to our love of Preacher and a broader chat about origin stories and superheroes. Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. Details this week Correspondence and Recommendations:- @cyberman_151 Nashville Season 5 Update: Axed ABC Drama on Verge of Renewal at CMT http://tvline.com/2016/06/07/nashville-season-5-renewed-cmt/ … via @TVLine The Televigion Mum recommended Panorama – Living with Dementia: Chris's Story (BBC1) The Truth About... Healthy Eating (BBC1)  Very Special Correspondence from Gauntletgirl continues the discussion of sex scenes in Outlander, including lots of further reading All Hail Outlander, the Best Sex on Television via @vulture  Sexual Violence on “Outlander” vs. “Game of Thrones”  via @indiewire  Outlander: False Feminism?    Outlander is Back and As a Feminist, I Am Conflicted    Outlander’s Top Ten Awesome Feminist Moments Current TV:- Mum BBC2, Fridays at 10pm Game of Thrones S6, Sky Atlantic, Sunday/Monday Preacher Amazon Prime "On Demand"s My Attention:-  Outlander (Amazon Prime) Reign (Netflix) The Wrong Mans (Netflix) Garfunkel and Oates (Netflix) Bo Burnham: Make Happy (Netflix) Gold Star:- Mum and Outlander for Rachel Bo Burnham: Make Happy for James Disappointment:- The Truth About... Healthy Eating for Rachel Top of the Pile:- Mum and Outlander for Rachel Versailles for James Thanks for listening!

We're so excited being back on track with Televigion that we start off quite a few new discussions in one episode - the summer Televigion drought, views on illegal downloads including coming out as a Televigion vegan, petitioning Seeso to open up to the UK and much more! Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. Details this week Correspondence and Recommendations:- Fern has a different opinion on Rachel's "five-series rule" Freya pushes for Outlander and recommends the WTF Podcast Episode 700 with Louis CK The Televigion Mum really enjoyed Mum on BBC2 and recommends George Clarke's Amazing Garden Rooms  Very Special Correspondence from Gauntletgirl  The Canadian Prime Minister joins in the Invictus fun Sad news about Nashville's cancellation Current TV:- Mum BBC2, Fridays at 10pm Game of Thrones S6, Sky Atlantic, Sunday/Monday Louis Theroux - A Different Brain BBC2, Sunday 9pm "On Demand"s My Attention:-  Sammy J and Randy in Rickett's Lane (Netflix) Gold Star:- Louis Theroux - A Different Brain for Rachel Mum for James Disappointment:- The Summer drought! Top of the Pile:- Once Upon a Time S5 (Netflix) and George Clarke's Amazing Garden Rooms (All4) for Rachel Boardwalk Empire (Sky Go) for James Thanks for listening!

Look who's back! It's been three and a half weeks and we've missed talking Televigion a heck of a lot. We finally kick off our discussion of sitcoms and what they mean to us, creating definitions and committing to a book deal along the way. But we need your thoughts on the matter too! Contact us on Twitter, online at The Televigion Blog or via televigionist@gmail.com. NB Here is the PBS documentary about the evolution of TV, America in Primetime, for those in the US Details this week Correspondence and Recommendations:- The Televigion Mum informed us of many things over the last 3.5 weeks GBBO's Nadiya was baking the Queen's 90th birthday cake The wonders of Slow TV  Intro video to Slow TV - Norway's 'Slow TV' Movement, Real Time Knitting and All, Hilarious TedX talk by one of the documentary makers - Thomas Hellum: The world's most boring television ... and why it's hilariously addictive, Guardian Article on Slow TV Sir David Attenborough and President Obama: The Full Interview  Caravanner of the Year - BBC Two "Not seen it but reviews are that it is terrible and so a must see." Invictus Choir with Gareth Malone Thurdays 9pm, BBC One Yorkshire, The Hairy Bikers' Pubs That Built Britain - BBC Two  Gauntletgirl  The Aliens (All4)- "very good, Sci fi but not really, full of British actors you'll recognise from other things. Have seen the whole series and hope it gets another."  Undercover, (BBC1, Sundays, 9pm) - "I like it but it does take concentration,  two different times now and 90s. It's a drama about the police rather than a police drama, if you see what I mean. Think there's a couple of episodes left to go in the series." Current TV:- Game of Thrones S6, Sky Atlantic, Sunday/Monday "On Demand"s My Attention:-  Flowers, All4 Gold Star:- Flowers, All4 for both of us Attenborough at 90 (iPlayer) and The Queen's Invictus video for Rachel Disappointment:- Once Upon a Time S5 (Netflix) for Rachel James was sad that Crazy Ex-Girlfriend is being offered free on iTunes as it is up for awards, BUT ONLY IN THE US https://itunes.apple.com/us/tv-season/crazy-ex-girlfriend-season/id1093947697 Top of the Pile:- Caravanner of the Year (iPlayer) for Rachel Silicon Valley S2 (Sky Go) for James Thanks for listening!