Podcasts about jonathan so

In this fast-paced world, managing our emotions and understanding those of others is more crucial than ever. Emotional intelligence (EQ) is about recognizing and managing your emotions effectively to reduce stress, communicate, empathize, overcome challenges, and defuse conflict. With high EQ, you can improve relationships, excel at work, and achieve your career and personal goals. Today, Jonathan Youssef is joined by Clay Kirkland, a returning guest with over two decades of coaching experience and a rich background in staff development at the University of Georgia Wesley Foundation. Clay is certified in emotional intelligence and includes EQ as a vital coaching component. Clay breaks down the concept of EQ into four crucial quadrants: self-awareness, self-management, social awareness, and relationship management. This episode isn't just theoretical; it is filled with practical advice, from managing personal emotions to enhancing interpersonal relations in various spheres of life, such as parenting, the workplace, and within the church community.Listeners will gain insights into how emotional intelligence intersects with spiritual maturity, the practical applications of EQ in everyday scenarios, and strategies for developing emotional resilience. Clay's explanations bridge scientific understanding with theological perspectives, making this a must-listen for anyone seeking to enhance their emotional skills and lead a more fulfilling, empathetic life. Join us as we explore how mastering emotional intelligence can lead to profound personal growth and significantly better interactions in all areas of life. This episode is for you, whether you're a leader, a parent, or simply someone looking to understand the emotional dynamics of the human mind.To ask Jonathan a question or connect with the Candid community, visit https://LTW.org/CandidFacebook: https://www.facebook.com/candidpodInstagram: https://www.instagram.com/candidpodTwitter: https://twitter.com/thecandidpodTRANSCRIPT:This transcript recounts Candid Conversations with Jonathan Youssef Episode 254:  What is Emotional Intelligence and Why Does it Matter?: Clay Kirkland [00:01] JONATHAN: Well, today we have a repeat guest. We like having repeat guests. We like to build up some relational collateral with our audience and so we've brought back Clay Kirkland. Clay has spoken on a number of topics, including calling, with us on Candid Conversations, and today we are talking about emotional intelligence. Clay is a life coach with twenty-plus years of experience. He served for eighteen years as the director of staff development at the Wesley Foundation at the University of Georgia in Athens. He has a Master of Divinity from Asbury Theological Seminary and he is a Gallup-Certified Strengths Coach. And so I will say, “Welcome back, Clay.”[00:51] CLAY: Thank you. I appreciate it. Glad to be here. [00:55] JONATHAN: Well, this is a topic that has always been of great interest to me, and obviously to my team as we were having this conversation and your name came up pretty much immediately, and it's this issue of emotional intelligence, EQ, right? That's our abbreviation. So this is not IQ, a measure of general intelligence. This is EQ, emotional intelligence, and so maybe help us define emotional intelligence. Why is it important? What is it? Kind of step us through a little bit of that process.[01:37] CLAY: Sure. Yeah. So it's a great topic. I'm very excited to be here to talk about it. And it's gone through a lot of iterations in terms of its understanding. Probably in the last forty years, really, it's been around and I'd say probably the last fifteen or twenty it's become a major player in conversations both in the business sector and also just in general. If we wanted to really boil it down to probably its simplest form, you would want to think about emotional intelligence in four different parts. Do you know yourself? Can you manage or read yourself? Do you know others? Can you manage and influence others? And that's about as easy as we can get it. We're leaving some things out, but across the bow, that's what we're looking for those four quadrants. There's a self-understanding, there's a social understanding, then there's a self-leadership or management, and there's a social leadership management and understanding.[02:55] JONATHAN: Even in just giving the categories I feel like I'm picking up on the necessity of being able to understand yourself and know yourself, being able to manage yourself, right, self-control—it's a fruit of the Spirit. And then on the relational spectrum, being able to relate to others, are … How do you lead? How do you interpret people's body language and cues and things that are being given off? So let's talk about the importance of just those four categories that you've given us.[03:45] CLAY: Sure. Well, you can, if we start with knowing yourself, right, and then think about that, as it relates to knowing others, we say things in life to our family or things are said about us that lead us back to what we're really talking about when it comes to emotions. So you'll hear people say things like, “He doesn't have a clue what's going on.” Or “Do you realize how angry you sounded when you said that?” And that immediate defensive posture. So in interpersonal relationships, it's pretty much there on a consistent basis, that idea of do you know what's on the other side of you? And that's the self-awareness, right? And then do you know what's happening with the people that are around you? So that's the first part, right; it's just this knowledge. And the great thing—I didn't mention this earlier, but the great thing of this kind of understanding emotional intelligence that plays into a lot of the definitions that people are putting out these days are that these are a set of skills that can be learned. This is not a—[05:09] JONATHAN: You're not born with it.[05:10] CLAY: —personality trait that, you've gotten and you're just stuck there. This is dynamic in a good way, but also in a sobering way in the sense that you can be really good at these and then stop being good at these, or you can be not good at these and then [05:31] CLAY: —they slide. But then outside of that awareness and knowledge, it's what do you do with it? Do you know how to manage yourself? And again, it's an interplay. It's always going to blend with the knowledge. Do you know what's appropriate for the moment either for yourself, coming out of you, with others, and then, can you apply this? So when we think about the brain, we're thinking about this process of your limbic system where the seat of your emotions are, and your prefrontal cortex, where you're making your rational decisions. So do you have understanding of both of those? Do you have control over both of those? And can you manage that—when you're alone—or can you do that also when you're with other people?[06:34] JONATHAN: This is very scientific but also very practical. Let's bring in the world of theology. How do you differentiate between spiritual maturity—or do you differentiate between spiritual maturity and emotional intelligence? Are they one in the same?[06:56] CLAY: I think you have to differentiate between the two, simply because someone who has no spiritual/religious anything—[07:09] JONATHAN: They're capable of growing.[07:13] CLAY: And being very emotionally intelligent. So you're not automatically emotionally intelligent because you have some type of spiritual maturity in the sense of you have a relationship with God or you do certain religious disciplines that make you, in the eyes of other people, highly religious or devout.There has to be a difference there. But when we look at the practical applications of emotional intelligence and you look at them and the practical applications of spiritual maturity—so probably the easiest one to go to is in the New Testament, to look at the fruits of the Spirit. You start talking about love, joy, patience, kindness, goodness. You get all the way down to self-control. And then you pull those back into the outcomes that emotional intelligence is supposed to create, there's a lot of similarities, right? Obviously, self-control is one. Optimism is a massive one, which we can really link to joy and hope. The kindness piece would clearly cover those kind of interpersonal relationships. So it's not a perfect overlay, but that's where you see it.[08:32] JONATHAN: Yeah, lots of connectivity there for sure.[08:34] CLAY: Yes, a lot. [08:38] JONATHAN:You mentioned the limbic system, the prefrontal cortex. Talk me through a little bit of that to give some clarity here.[08:52] CLAY: Sure. And again, let's make it real simple.[08:56] JONATHAN: Thanks.[08:58] CLAY: Yeah, for all of us. You're going to have your reptilian part of your brain. That's your fight, your flight when you're in danger. That's just kind of that aspect. If we get past that, we're typically going to put our neural functions into two other categories. That's going to be your limbic system, and that's the “I feel” place. And then your neocortex, that prefrontal cortex, where you're going to think rationally and you're going to make decisions, you're going to process them.So what we're trying to say is, because you get this a lot when I go around and talk to people about emotional intelligence, you'll typically hear someone or a group of people identify and say, “I don't have a lot of feelings. I'm not very emotional, so I don't know if this is going to help.”[09:59] JONATHAN: “I'm a thinker, not a feeler,” right?[10:01] CLAY: That's correct, which just means that they're leaning much more heavily into one area of their brain than the others. That doesn't mean that they don't feel. It doesn't mean that that limbic system is depressed or deformed or anything else; it just means that they are not as aware that that part of their brain is functioning and can function for them in positive, neutral or negative ways.Again, if you were to describe me and say, “Hey Clay, on a scale of 1 to 10, how emotional are you,” most people then link that to when's the last time you cried? Do you get chill bumps when you watch a video, or a commercial at Christmas, or whatever? And I would say, no, that's not the type of person I am. But that still doesn't mean that that limbic system within my brain isn't an active part of the brain. Because it is. For all of us it is, we're just not leaning into it.[11:14] JONATHAN: So is there a way—I'm sure we're all thinking of a person that perhaps is not leaning into their limbic system, and we're thinking, How do you exercise that? And I'm assuming that your goal with clients and that sort of things is to try and help find balance. I assume you want a balance between being in touch with emotions, right, because emotions can be good indicators. They can also mislead, but they can be good indicators. And then you need a rational side to help navigate that. So how do you sort of exercise—and we can do both sides of that—how do you, for those who are very much a feelings-generated person, how do they exercise their thinking and vice-versa?[12:10] CLAY: All right. So let's start with the person who typically is not necessarily a feeling-type person. I'll give you an example. I had a client several years ago, and he was a CEO of a company and I got brought in to work with him. We were meeting in the lobby of the hotel, like in the restaurant, and I asked him, I said, “Tell me a recent story about something that went wrong at work.”So he tells me the story. And after he finishes, I said, “How do you feel about that?” And he said, “Bad.” I said, “Try something a little bit more deep, descriptive.” And he just stared at me and said, “I don't know, it just made me feel bad.” So I said, “Have you ever heard of the ‘emotions wheel'? It's a very common graphic, you can google it.”So he pulled out his phone and said, “Siri, Google,” and here comes the emotions wheel. It pops up on it and he stares at it. He stares at it for probably seven minutes. I was like, “Wow, I don't know if he's going to be able to do it.”And he finally said, “Angry.”And I said, “All right! Great! This is good. This is good.” So we spent several months with that wheel, using exercises that would help him start to recognize that he has feelings that are coursing in and out of his brain that he just wasn't giving airtime to. So again, people who aren't touchy-feely or aren't kind of the emotional types, they typically won't feel anger. They're aware of that frustration, but what they typically do, they're guarding themselves. And this is where we're going to get off on a rabbit trail, so I'm going to pause myself, but they are typically guarding themselves from certain emotions they don't like or they don't believe are good or not the type of person they would be. Or pain, or whatever, again, can't go there. But that's typically what you see. So we just started to do exercises that caused him to become very aware of the emotions that were coursing through his brain and body and it became helpful. Again, it's not necessarily the end product, but we just needed to at least give some recognition.On the flip side, someone who's highly emotional, again, the way they would describe themselves, and they would say, “Well, I don't really think that much,” they do think a lot; they are just thinking primarily through their emotions. And you said it earlier: they can be great indicators, but they can also be misleading. So that's where we kind of do some exercises for people in that kind of space to really pause and start to learn where they're making their decisions from. Why are you doing this? “Because I feel like it.” What do you feel? “Well, I feel …” and they can just tell you.And so that's when you have to do some exercises where you pause and put them in situations where you say something like, “If your friend was about to do this, how would you tell him or her what to do? What kind of advice would you give them?” That gives them a pause to consider. Or it's a common kind of way that we would do it, but we would debate our emotions. So your classic, classic example for this is—and this just happened recently, so this is a true story, here in this office—I got here early because the fire company told me they needed to come and do a test on the fire system. So 6:30 in the morning I walk through here, only saw one other person in the office and said, “Hey, there's a fire alarm test.” He said, “Okay, great.”So what I didn't notice was that someone was parking and then they were coming into the front doors about ninety seconds after I warned the one person that the fire alarm would go off. And this woman came running down the hallway in panic and scared, because she and I both heard the same fire alarm, but because I had certain knowledge, I had zero panic and fear, and had no emotion towards the fire alarm whatsoever. And she had incredible emotions towards it, and therefore, she was running, she was trying to save people. She was looking for people to save because she thought that we were going up in flames, and she just couldn't believe it.So the point of that is to say when you have something that triggers emotion, you can debate it. If you know that you need to learn something about your emotions, you can debate it, again, to say, “Is there a reason for me to feel any other way? Is there a trigger or consequence that I'm concerned about? Is there any context that I could give myself that could perhaps change the way that I feel currently?”And again, they are all methods. Those are all different ways—and we can get into those exercises if you want to—but the point of those exercises is to pause yourself before you push whenever that limbic system is pushing into your vision, near the forefront of your mind, to make that the only way that you can make a decision. We're just trying to pause you enough to give you an option to have your other parts of your brain work.[18:31] JONATHAN: This sort of happened recently—I should be careful; I should use third-party examples. But my wife and I were at the beach, and our son was playing near and we were talking with friends. And we were keeping an eye on him, and then all of a sudden he was gone. And so we went into full panic mode. And we're looking in the water and it's just like it was emotion-driven. There's very little rational thought process and the panic mode strikes. He's not where he was; something terrible must have happened.And I remember after panicking for a while I finally just stopped. I did the pause, kind of what you're talking about, and I thought, “Okay, we've been here before. He knows this place.” So I told my wife, I said, “Go back up to where we're staying and check for him there.” And then I thought, “There's a little statue that I know he likes. Let me go see maybe if he's gone over there.” Because we hadn't thought, “Well, he ran past us,” because we would have seen him. But I thought, “Well, we might have been engaged in conversation and missed him.”And sure enough, as I'm running to the statue, there he is, playing in the sand. And he had run past us, chasing a seagull or something. And it was like, okay, if I just took a minute to think, all right, what are the logical things that could have happened here? But at the same time, God has given us those panic senses to where if something terrible had happened, your body is in that sort of fight, hopefully not flight, but fight mode of I need to do … I need to, as the example of the lady in the office, she's trying to save people. That's a good thing if the fire alarm is going off. But I see what you're saying in terms of just taking a minute to think, “What information do I have? What am I …?” Because I think your mind probably shuts down, you get into tunnel vision and that sort of thing.Let's talk a little bit about IQ versus EQ. And in terms of the way that we look at people, the way we consider talent, children, workplace environment, hiring, all that sort of thing. How do you see the consequences of prioritizing one over the other kind of play out? [21:04] CLAY: I'd say in the last twenty years or so there's been a push to raise the importance of EQ. Not to diminish IQ, because it's important to learn, become smart, develop that part of your brain. But this isn't a choose one over the other. Now, right, is to say we probably missed it when we were only pushing get smarter, get this score on a test, get this acceptance, then you'll be successful. Harvard Business Review came out and said that there is … the differences between good leaders and great leaders, that gap. If you were to look in that gap and see what's in there, they would say 80 percent of the contents in that gap are in the emotional intelligence sector. So that's what they would say. Daniel Goleman, who's one of the most popular voices on emotional intelligence, wrote Primal Leadership and several other books about it over the course of the past thirty years, he would say that if you're looking to define success and what's going to make you successful in this day and age, he would say 80 percent of the contents of that recipe would also be in emotional intelligence.And I think what they're saying—this is me trying to interpret a little bit—again, it's not to say, “Well, that means only 20 percent is IQ.” That's not what it's saying. It's saying we pushed, “Be smart, be smart, be smart, be smart” so hard, that's almost like a get it. Like when you look at people who work hard in high school, go to college, get really good grades, get a competitive job, I'll bring Google up in a second, but that's that pattern. We said, “IQ, IQ, IQ, IQ.” And here's how you're going to be measured on that, you're going to get rewarded. You're going to get awards, you're going to get plaques, you're going to get acceptance letters, you're going to get scholarships, and you're going to get a job.” That's the way we measure IQ. We pushed that so much, it's almost like you have to do this. But if you also add extra, what is that extra? Well, 80 percent of that extra, I would say, would be emotional intelligence. So that's where I think that those figures are coming from. You can google these things if you want to, but they did two what they would call projects where they studied their employees, one almost around 2000, and then twelve to thirteen years later. And they were very surprised, as was everyone else, because they had kind of the best of the best, the brightest people, the Ivy League schools and so on and so forth. And they were trying to differentiate why some teams were doing better than others and why some individuals were doing better than others. And that's when they started to find out that their term was “soft skills” were trumping hard skills. And they were trumping them in the sense that everyone came almost with the same hard skills—the STEM degrees that they all came with—but then why were some doing really well and why were some not? And that's when they started to see qualities like coachability, curiosity, emotional intelligence, empathy, listening. Those things were what they saw in both individuals and teams to see where people really are being successful.So as a parent and vocationally and all those kind of things, it's not that we should depress one in order to elevate the other as much as you're both working on our ability to become smarter but also your ability to be more emotional.[25:18] JONATHAN: We see this in Scripture, apart from just fruit of the spirit. What are some of the areas? Certainly there's a high level of EQ that we would see, for instance, in the Psalms, which maybe explains why David was a good king and others probably were maybe lacking in those areas. I'm trying to think it as it relates to us in the Christian life specifically and it's interesting that you bring up Google. I would think coding or something in the technology field, I wouldn't think there's as much relationality in business versus like sales or pastoral ministry or something where you really need those muscles exercised. But at the same time, it's interesting that what they're finding is that even in the technology field, your success has a balanced element to those who have the soft skills, who have elements of emotional intelligence and empathy and all those sorts of things are actually helping in that plus area, as you described it. Help us detangle some of that and just thinking like from a scriptural perspective. How does something like emotional intelligence equip you for being better in all those different areas?[27:21] CLAY: Sure. Let me stab that one real quick and then come back to some of those biblical things. You know it's interesting. If you look at statistics back when Millennials were in the limelight, I'd say about ten years ago, they would say at that point that 80 percent of them wanted to work in a place of collaboration; that is what they were desiring in a workplace. Those statistics have only gotten higher as Gen Z's are infiltrating now the workplace.So you see that push for now over half of the workforce, so regardless of what industry you're going to find, you're seeing that desire for camaraderie, teamwork, connections. So even post-COVID where a lot of things have gone hybrid, work models, it's still you're on a Teams meeting, you're on a Zoom meeting, you're still interacting. And so I have several clients, current and former, in that tech space, really smart people, and they do have to code a lot by themselves, but it's when they have to talk to the customer, when they have to talk to the teammate, when they have to interact with the boss that that's where the skills either put them into a place of advantage or [unintelligible]. So it's going to be very difficult for almost any job to be a job where you're not going to need some type of emotional intelligence skills in order to make yourself successful. Can you find it out there? Sure, there's just not that many. So most of us are going to find ourselves in positions where if we have emotional intelligence, we will succeed, stand out, excel.[29:18] JONATHAN: And we're relational beings. I mean, even by our very creation.[29:23] CLAY: Yes, absolutely. So that's that little vignette there. So I would say—you mentioned the Psalms. I mean, the Psalms are great. I love the rhythm of Psalms. I had to take a class in the Psalms when I was in seminary, I chose to, and it was fantastic. But there's almost like this general rhythm of David in the Psalms because most of them from what we understand, or at least at the onset, privately written. And obviously, some of them were more for the tribe, the songs, but typically they were private.So there's this process of raw, honest emotion about the good, the bad, and the ugly of life (I mean, not all of them are sad) and then some possible outcomes that either were happening or could happen. And then there's typically, almost in every psalm, this point to which David or the other psalmists get to where they then recognize who they are and who God is, what God might do compared to what they might do, and then there's a surrender of those things that they've felt and seen and wanted and they let go. And so that in and of itself, you could study that for a long time.Psalm 139, right, it's almost like a classic for emotional intelligence, especially the end, “Search me and know me,” right? So there's self-awareness, I want to be known. “See if there is any hurtful way in me.” That's I want to get better. But this is my favorite part is that at the very end he says, “And then lead me in the way everlasting.” The reason that's my favorite part is because of how it's saying the self-help movement gets it wrong when it puts navel-gazing and self-awareness as the end. Just become aware and the longer you can stay aware and the more that you can stay aware, you're good. It doesn't mean you're good.[31:47] JONATHAN: There's no way forward.[31:50] CLAY: That's correct. Right. So David there it's like, “Hey, I want to be aware of myself. I need to be aware of myself.” The whole psalm is basically saying, “You're absolutely aware of me. I'm pretty much under the spotlight.” I want that awareness and I want you to continue to have that awareness, not so that I can be aware; so that I can then go the ways you want me to go.When I was at Wesley, we had this phrase we would do first-year time, second-year time, third-year time [unintelligible] our second-year term. And this was the phrase that I took there. It said, “We're going to focus on you so that then we can get you out of the way.” So we wanted to have some quote/unquote navel-gazing time. We did strengths finder for them, we had emotional intelligence for them. Again, where there's a lot of awareness. But it's not just so that they can know themselves; it's so that they can know where they need help, where they need to get better, where they are doing well so that we can get all that out of the way so that we don't have to be in the limelight. We can actually then serve others [overlapping voices] and give ourselves over to the things that God wants us to do.And that's why I [unintelligible] [33:21] JONATHAN: That's right. No, you're right on, and that's a helpful sort of thought process through that. I mean, even through that lens of emotional intelligence. We live in a day and age where everything is volatile, people are triggered by anything and everything. And then you add in a layer of social media or anonymity through the computer, which sort of exacerbates our problem. How do we develop greater emotional resilience and self-control? How do we as believers navigate that terrain.[34:11] CLAY: Huge thought there for sure. I'll just take one swing at it, because that's—[34:20] JONATHAN: We'll do a five-part episode.[34:23] CLAY: Yeah, that's a big one. I'll go real technical in terms of emotional intelligence [unintelligible]. In the assessment that I'm trained in and I like to administer to people, it's got subsets. So it's got fifteen of them. Two of them, I think, speak to some of this. One of them is flexibility. And flexibility and that subset is when things change, like you've decided something is going one way but now something out of your control has changed it, how do you respond?On the other side of that coin, the next thing we administer is stress tolerance. Stress tolerance is you want things to change desperately and they're not. They're stuck. [unintelligible] And so in those two, when I look at volatility of our current culture and social media, it's you see a plan so easily in those two regards. Someone has an opinion, someone has the other one, you can't change their opinion, so what are you going to do about it? Nowadays, we just trash the other person.[35:52] JONATHAN: Ad hominem, yeah. [35:54] CLAY: That's our response. On the other side, when we had a plan and now everything has changed and we didn't get to choose that, how do we respond? We blame everybody. We have to find someone to blame because we think that that's going to make it better. Right now we look for someone to blame instead of moving into that place of resilience and grit and realizing that not everything is going to go our way. So part of that emotional intelligence, when you look at how you become flexible, become better at stress tolerance.A huge part of it is just accepting the fact that things are not always going to be good; things are not always going to go your way; and that is everybody's life. You want to take it to a biblical place, then you go back to the words of Jesus where He said, “In this world you'll have trouble.” He's already told you. And everybody's response to it. He gives you the clue, if you're doing it from a Christian perspective, He says, “But I have overcome the world,” meaning that your perspective is going to change how you respond to those situations. If the weight of the world is on that moment, you know, it'll crush you. But if you realize that that's not the weight of the world, regardless of the situation, even if it's going to hurt, those kind of things are going to take a bite out of you, it gives you the ability to realize that you can recover, you can make it through it.And that's a key part, I think, in all of that. I'll give you an example, a real practical example. I use this with my kids, but I also use this with adults for sure. I use it with myself. Ask myself this all the time. I can't remember where I came up with this, but so this is the question when you're faced with a situation that's hard, heavy, frustrating, whatever it is, and you have the option of choosing an emotional, unintelligent response, is this. This is the question I ask. Is this going to be in your book?I can say that to my kids, and they know exactly what I'm talking about. If they don't know what I'm talking about, then I give them this context. At the end of your life, you get two hundred pages to write your autobiography. This situation right now, is this a chapter? Is this a page? Is this a paragraph? Is this a sentence? Or is it on the editing floor? And almost always this will be on the editing floor. And so if it's on the editing floor, then why are we treating it like it's a chapter? And that's the context. So that's the question I ask myself, and I give it to my kids as well and that's what I tell my people at my office. Again, it gives you pause. That's the whole point of this is to pause. But the whole idea of emotional intelligence is this, and how they came up with this, I don't know. People smarter than me. I would say this: that you have six seconds to choose your emotional intelligence response, meaning that your brain likes to default to habits, and so you'll habitually just respond. You think about traffic. Any time I see traffic, I get angry, so shoulders go up, eyebrows go down, my tone changes, whatever, it's just your habit. You're choosing it, you just didn't realize that your brain is in default into the choice. You're really not giving yourself that option.But the six seconds comes into play in the sense of you can actually choose to go a different path. We're talking about neural paths. You can choose a different neural pathway. Your brain would prefer to go the habitual route because then it doesn't have to work that hard. So in all of these things, what we're trying to do is to give ourselves pause enough to alert ourselves that we're probably about to choose a default that is not the best choice, and can we train ourselves to a point where we say, ah, not to do this, probably should do this. It's the train tracks, shifting from one track to another. That's really what we're trying to do in any exercise that we do in emotional intelligence is to pause and then give that new skill an opportunity to get some [unintelligible] and get some legs [unintelligible] [41:18] JONATHAN: And it's funny, because in order to get to that position, you have to have self-awareness. You have to be aware that what's going on is—and I'm just even putting myself in situations where I'm like, oh, that is absolutely my mental state goes to a default position. Oh, this happened and I know that this is my reaction. And you're right; sometimes it's like I don't even think about it. It's just this is just what I do.It makes me think of sort of the enneagram thing, well, that's just who I am. I'm a fill-in-the-number, but there's no, okay, so is that your paradigm? Is that who you are and that defines you? Or are you at a position to where you can challenge yourself, and to your point, take a pause and consider, okay, do I have other options here? I absolutely do. Which is really, if you think about it from a gospel perspective, it's like do I have to keep choosing law over injustice for people over whatever situation? Or at what point do I choose to show grace and mercy, which by definition are undeserved for those people? And that's really where the gospel message comes in, because if God operated under our own default paradigm, if He was created in our image, then it would be law-justice, law-justice all day every day. But grace and mercy are so alien to us, and that's the beauty of Christ's work and what He has done.You've shared a lot of really great and helpful stories, but could you give us some examples of applied EQ principles in—and I'm going to give you three different things, and then I'll remind you of them if you can't remember. So one for parenting, two, the workplace, and three, the church. So we'll start with parenting. [43:32] CLAY: I'll be as practical and as vulnerable as I can. What we're trying to teach—we've got six kids, a major focus for us right now is just empathy, how to put yourself in someone else's shoes. A funny but revealing story is several years ago my wife was crying about a certain matter. One of my sons—[44:02] JONATHAN: Name redacted.[44:05] CLAY: We'll keep it redacted. One of my sons came in and saw her and immediately started crying. And then another one of my sons came in and looked at his brother and said, “Why are you crying?” And he said, “I'm crying because she's crying.” And then that brother who was not crying was like, “That's the weirdest thing I've ever seen.”[44:28] JONATHAN: That doesn't make sense to me. Yeah, yeah, yeah.CLAY: In general, we all have starting points, and those starting points have been formed and fashioned by our personality, our family systems, I mean all of these things. So that's why I love taking these type of assessments, because they show you where you're starting from. Then you get to know where you need to go. So again, take Son A in that story. Empathy is already off the charts. I mean, just his starting point is he's probably at an A-. There's one little uptick and he's perfect.The other son probably at a D or F in that area. He really needs to work on it. And that was me when I took my first assessment of emotional intelligence ten years ago, very low empathy. I've spent several months, almost half a year, keeping an empathy log so I can start to train my brain to think about someone else's emotions. And it got much better, but it's something I really had to learn. In parenting, we're saying regardless of your starting point, this is something that matters. It matters biblical standpoint, it's truly what Jesus did and still does. It, from an interpersonal standpoint, if you can't put yourself in someone else's shoes, that's going to be very difficult for you to have compassion on someone and serve someone to even care when they're not in alignment of what you want.So we have just said this matters. So we are consistently asking our kids when they say something about one of their siblings, “How do you think so-and-so feels about this? Where are they in this story?” So that's our skill right now, so it's above any other skills that we're trying to get. One, as a family of eight, we're hoping to do that well. If we can, have empathy, so we're working on that. When I think about our kids being released into the wild, and if they carry that skill with them, it will carry them a long way, regardless of what they do. And I don't need them to get recognized for it in the long way in the sense that they will do well if they do right by people.[47:29] JONATHAN: They'll be a good friend.[47:31] CLAY: Absolutely. So huge piece in that one, and that's what we've worked with there. In terms of business, I would say the really big piece of business is if you can listen, understand, and then reinterpret what you've heard to other people, you can't help but be successful, because people will flock to you because of your ability to do that. I call it the meeting after the meeting in business. And that's someone, we have a meeting and then something is lost in translation and something's then misinterpreted and then that person is, “That's not what is said. That's not what I meant at all.” And then now they have to go have a meeting about that meeting.[48:29] JONATHAN: I've been in those.[48:30] CLAY: You've been in those. We've all been in those. So now you're having a meeting about a meeting and then you're going to have to leave that meeting and have another meeting in order to let everybody else know what happened in that meeting after the meeting that should have happened in the meeting. And so that differentiator of active listening, being able to communicate empathetically, being able to communicate clearly. You know in emotional intelligence we would talk about emotional self-expression, to be able to clearly say what you're feeling, right? You can see that every day almost in practical experiences in yourself where you've got your typical passive-aggressive, bless you heart type who's lying through their teeth. They don't have any blessings for you, but that's what they say. So that type of differentiator in the business sector is massive, it's just huge, huge.Tell me the third category.[49:40] JONATHAN: The church.[49:42] CLAY: The church, yes. The church, the church, the church. Oh man, this one and a lot of different other places for this one. I'll pick one, and maybe it's probably not the most popular one, I was in ministry for, well, ran it for eighteen years and was in almost twenty years, for nineteen years. Had a lot of friends in ministry. And to see where they are now, I would say that ability to handle emotions, not just their own but other people's, burden-bearing perhaps the more specific term, and then to be able to handle the stress of that, to have mechanisms to keep that at bay. The primary term you're hearing these days is burnout. Burnout to me is when someone and they have had a moral failure, they've stolen money from the church, they've ripped their kids' lives apart, that's not good. But typically what you see before burnout—when we say burnout, like “Hey, I just can't do this anymore,” now they're completely unhealthy and that's going into sexual improprieties, that's going into financial improprieties, that's going into the idea of power and where you're getting your validity and things from. So that's what you typically see before the engine hits failure and we get to see it.And so from that emotional intelligence standpoint, you're thinking about really self-control. In emotional intelligence it's called “impulse control.” Can you have a desire, and understand it, and then make the right decision? That's one of the fifteen subsets that we look at. And if you look at people in ministry, it's so easy to get away with so many things for too long of a time, and it really comes back to [unintelligible] Scripture because [unintelligible] until it's too late. So I think impulse control is real big, again in EQ, for the church to say, “Hey, you can spend time alone with this person, you could charge this to the credit card, you could do a lot of things [unintelligible] and they're going to believe what you say.” [Overlapping voices][52:43] JONATHAN: So even in thinking about each of those ones you've just given us for children (or parenting, rather), workplace, church, it's interesting because all of those, I'm just thinking on the side of this in terms of protecting yourself—not protecting yourself in terms of I want to get away with this, but I want to prevent not having empathy. I want to be able to listen to someone and interpret and relay it back correctly to them. I want to be able to have impulse control. Those all involve, I mean, they are skills of the individual, but at the same time, it requires the assistance of others, I think. It's a very communal—which, of course, emotional intelligence is about relating with others and self. And so it's interesting in thinking about the way you've described or given those examples how much, if you're setting up safeguards or even beyond safeguards you're actually wanting to grow and develop in those skills, it requires community, it requires other around you who are committed to the same goals, so to speak. So in your work, do you—sorry, this is like bucketing rain our here. A hurricane is coming to Athens. Are you—do you encourage people to work these things out, to develop these skills, within a communal setting, accountability levels? And my power's just gone off. We're still connected, so we'll just keep going.[54:42] CLAY: Absolutely. I think the—I would encourage every person to have a communal component to every phase of emotional intelligence [unintelligible]. The assessment piece, you can take one by yourself on your computer and get a score and never share it with anyone what you scored and it would never be as effective as if you shared it.[55:05] JONATHAN: It's the navel-gazing example you gave earlier, self-help.[55:09] CLAY: We're trying to gauge our self-awareness and we're our only judges, and what have we done? So that's why when I do these assessments, my favorite one to do is the 360, because then you've got different people from all different parts of your life that are assessing you. So the assessment piece has to be in community, right? The understanding the good and the bad has to be verified in community.One of the things that we do when I take people through this coaching, especially when they come in for the 360, is to look at what we call the gap analysis. And the cool thing about the gap analysis is you'll see it on both sides of the coin. So when people say they have blind spots, what they typically means is let's say I'm a person with a blind spot. I almost always say that person thinks that they're here and they're actually here. They think they're better—which could be a blind spot. On the slip side, a blind spot is that this person thinks that he or she is here and actually they're much higher, they're here. So they have a lower self-awareness or self-image of themselves in this area than actually what's coming out of them. So you get to see both sides of the gaps. Where are you doing better than you're actually aware of and where you actually do worse? So that has to be in community.And then as you work them out and work on the skills, you're going to have to have people to work them out with and then people to let you know how you're doing. Every phase has to be in community.[56:56] JONATHAN: I'm sure people are listening to this and thinking, “I know someone who needs help with this.” Is it a subject where it's like, “Hey, I sent you a little questionnaire you can fill out to see all your blind spots”? How do you broach the subject with—is it like, “Hey, I'm working on some self-improvement stuff. Would you want to do this with me?” How do you find that others engage their colleagues, friends, family members, whatever, to see this, to have some self-awareness and bring it to the forefront without crushing them or coming across judgmental, etc.?[57:42] CLAY: Yeah, it's if you're trying to inspire—I'll use that term—someone else to do it, yeah, that's … There's not just one way, because you can have a relationship where you can say—[57:56] JONATHAN: And it depends on the person.[57:58] CLAY: Depends on the person. I will get called in to work with people who their bosses are saying, “You have to do this.” They have no choice. And then there's other people who would say, “Hey, I want to bring this up to my husband. How should I do that?” And they have to do it in a much more nuanced way. So I would definitely encourage people to get to that point where they can be honest. If you can be honest with that person, and this isn't to say, You're wrong, you're broken, you're damaged,” as much as to say, “These are skills that both of us or all of us should learn, can we do this together?” Because it's not, again, I'm certified in emotional intelligence and I teach it and coach it, but I still have to live it or I won't be emotionally intelligent. So no one arrives. You learn it, but you still have to do it. So everyone can join in. And that's what I would say the best approach to other people is to say, “Hey, let's do this together.” Because no one can say, “Hey, I hope you get to this point.”[59:13] JONATHAN: When you're like me, then you've arrived. Well, Clay, this has been such a big help for me just even in understanding the neurological things, the neurological pathways and thinking about my own mental habits that have come in play, thinking about self-awareness, other awareness. I think these are just such important factors. We see them through Scripture. We know the heart of God. We see the sovereignty of God over all things. We can have hope in Him. And just having an awareness of this, I think, helps us to serve the body, to serve the lost in such helpful ways. And so I'm grateful for your training and your expertise in this area, and I'm just grateful that you were able to take the time to join us on Candid Conversations.[01:00:13] CLAY: Glad to have done it. Thank you so much for the opportunity.[01:00:15] JONATHAN: Of course. God bless. 

In this episode of Candid, Jonathan welcomes Tyler Van Halteren, a man with a deep-rooted commitment to enriching the lives of children and youth through the power of Christian faith and storytelling. Tyler, a Master's Divinity graduate from the Master's Seminary, has dedicated most of his life to sharing Christ's teachings and the Bible's wisdom through storytelling.From serving as an Associate Pastor at Gorrie Bible Fellowship in his home country of Canada to teaching at Phnom Penh Bible School in Cambodia, Tyler's journey has been one of service and exploration. But the profound impact of 20-minute bedtime stories on his son sparked an innovative idea in him - why not blend the charm of bedtime stories with enduring lessons from the Bible?Taking up this challenge, Tyler founded Lithos Kids in 2020. His venture was no less than a mission to transform the world through biblically faithful and beautifully illustrated children's books. The launch of his first book, Little Pilgrim's Big Journey, on Kickstarter was a resounding success, exceeding its funding goal by 500%. It quickly became a treasured children's book, and Little Pilgrim's Big Journey, Volume 2, and Volume 3 was released shortly after.Now, as a father and an author, he continues his mission from southern Ontario, Canada, where he resides with his growing family. Join us as we dive into this inspiring journey with Tyler, discussing the importance of spiritual mentorship, the creative process behind his illustrated books, and his vision for instilling Christian values in young minds.This is an episode you don't want to miss, especially if you're a parent, an educator, or anyone interested in spiritual growth and innovative approaches to faith-based education. Be sure to tune in!Books by Tyler Van Halteren:Little Pilgrim's Big Journey Volume 1Little Pilgrim's Big Journey, Volume 2Little Pilgrim's Big Journey, Volume 3Kingdom of God Storybook BibleTo ask Jonathan a question or connect with the Candid community, visit https://LTW.org/CandidFacebook: https://www.facebook.com/candidpodInstagram: https://www.instagram.com/candidpodTwitter: https://twitter.com/thecandidpodTRANSCRIPT:This transcript recounts Candid Conversations with Jonathan Youssef Episode 252: How 20 Minutes Can Impact Your Child's Spirituality: Tyler Van Halteren (Reprise)JONATHAN: Tyler, thank you so much for taking the time to be on Candid Conversations.[02:28] TYLER: Yeah, thanks, Jonathan. It's a joy to be here.[02:31] JONATHAN: Well, tell us a little bit about your background, upbringing, and then we'll transition into how you got into writing and producing kids' literature. [02:43] TYLER: By God's grace, I came from a Christian home. But one of the most significant moments, and I guess most relevant moments to this interview, was when I was beginning to explore the faith more seriously, not just walking in my parents' shoes but actually considering the weight of eternity, heaven, hell, my own faith, my own walk with God, and in that time I found an old 1975 version of Pilgrim's Progress, paperback, 95 cents, that was given to my dad when he was about that age, about 15, and it just sat on the shelf. So I picked it up, read it, and that's the first memory that I have of understanding the Christian life and wanting to follow Christ. That's the first book I remember reading in that season.So that led, by God's grace, to a hunger for His Word, for sharing His Word, and then through various camps I had a great experience in high school. Our Christian high school was connected to a children's camp. And so I was able to teach there and saw a measure of gifting, a desire to teach, and then went on to Master's Seminary and then to youth pastor Cambodia. In the midst of all that, had some kids along the way and then started brewing some of these book ideas.[04:07] JONATHAN: Tell me ... You just sort of lobbed Cambodia into that history. Tell us a little bit about that. [04:18] TYLER: Yeah, for about 10 years before that, my goal and desire and prayer was to go into missions. And so we set the course for that through seminary, and then even as I joined my church there was a sense of telling them we're going to be here five years and then we want to be sent out to the mission field. So we went. The goal was to teach the Bible at a Bible school there to college students. Had some other cool opportunities, like with some friends had started children's programs, so I'd go to villages and there would be 30 kids that would just show up, 30 or 40 Buddhist kids would just come. And they listened to some English teaching, some Bible teaching, and just really neat.But in the midst of all that, COVID happened and that shut a lot of missions down. But thankfully I was able to finish the Little Pilgrims book during that time. And then also during that time, I started having some significant health issues and that sort of ended up—a variety of numbness and extreme fatigue that kind of landed us back in Canada, but trusting God's providence in all that and encouraged now to see there are some of our books being translated into already in Spanish, but some being considered for the Cambodian language, Khmer language. So there is French, Vietnamese, so encouraged to see how God's continuing that missionary desire through these books.[05:44] JONATHAN: Unbelievable. Okay, so you've shared with us that it was Bunyan's Pilgrim's Progress that set you on a particular path. I'm assuming that's the connection to wanting to retell it through a child's perspective. Tell us a little bit about how those pieces came together.[06:08] TYLER: Yeah, it was a neat few things that came together. So I've always had an entrepreneurial bent, always a desire for that. Buying and selling, doing different things. Little businesses on the side. And that gave a skill set that when my son was about three or four I started looking for, oh, is there a good children's version of Pilgrim's Progress? And at the time when I looked around, the only version was a 1985 one, Dangerous Journey. I bought that, opened it, and it was the first time I've opened a book and my son has sort of screamed and cried in terror at the illustrations. The illustrations were so—[06:53] JONATHAN: I have been there. Especially for a three- and four-year-old.[07:00] TYLER: Yes, absolutely terrifying. [07:01] JONATHAN: Here's the Christian faith, my child.[07:05] TYLER: Yeah, I saw that, and I thought, Okay, there's got to be a way to do a better version, especially for younger kids.[07:13] JONATHAN: I will say, I have seen one of the—I think it's more for teenage readers, maybe, and it is very graphic. Apollyon the dragon is very scary and menacing. And you're right, there's a lot—I mean, that's the way Bunyan wrote it, right? I mean, it is dramatic, very. But when you're thinking about little ones, you've got to tone some of that down so they're not actually terrified but wrestling with the core issues. And I feel like your book does that so well.[07:46] TYLER: Yeah, that was a real delight and surprise. I was writing with my son, three or four years old, in mind. And we read it 20, 30 times together in the process of writing it, and that was all super fun as we got new illustrations and as we pieced things together to see his excitement and to see things, Gospel truths click for him in that journey. But I'm coming into this somewhat naïve in a sense. I had no real understanding of the publishing industry and just had this goal. Write this as well as I can, with really great illustrations, for my four-year-old son. And then for whatever reason, the Lord's taken that, and it seems to have hit that target with a lot of families who say similar things, that these truths are connecting in a special way.[08:40] JONATHAN: Well, and let's talk about that. So as a parent, it is hard to find really good—and I know it's out there and I've got a lot of them. But there's not a lot of really great Christian children's books. It's either for an age up, as we just talked about, or it's kind of delves into more of a moralistic, you know, do this, behave this way, obedience—which are true things, but there are so many better, deeper truths that we need to expose our kids to. I think there's a longing of parents—I mean, I hear it from moms all the time, “Hey, if you can think of a kids' book and write it, like go for it.” Because there's a real need for that, especially at those young, really vulnerable ages, age category.[09:44] TYLER: Yeah, and we've seen a growing hunger in people, and through our social media and connecting with different people that there is this real longing for those kind of resources, and that's been an exciting part, too, seeing how much this has resonated with parents, this kind of idea. And there's other publishers that are doing some really great, like probably in the last five years really there's been almost a resurgence of good, solid books, Gospel-centered books. But before that it was pretty dismal, and that was about the time I started writing was when I was looking around and saying, “Okay, how do we get really good Gospel-centered books that hit the core of these issues for kids?”And the fun part of that has been the allegory idea of Bunyan's allegory and seeing how much that's resonated with people.[10:30] JONATHAN: So let's talk about just the impact I mean, it's obviously a tradition within ... it's been around forever, right? Either storytelling with your children before bed, or at a particular time, and just the impact that that has of, one, reading, just reading comprehension, storytelling, kids' abilities to have an imagination and picture things. Have you done any kind of research into that I mean, even in your own life and seeing the way that it relates with your own children?[11:09] TYLER: Yeah, that's one of the cool things, I think, for a lot of families, the question of family discipleship, family devotions, those kind of things come up, and it's challenging in our day and age. Generally, we're pretty busy people and probably more busy than we need to be, so it's hard to set aside a time. And sometimes it's hard to get kids that aren't wiggling during that time, or moving around, or asking, “Okay, when is it over? When is it over?”[11:36] JONATHAN: You need to draw them in, right?[11:38] TYLER: Yeah. So for my personal life it was bedtime. They kids knew, okay, we can read. It became part of the routine. And they are also glad because that time they're winding down and they know they're not going to bed yet, so they're getting a little extension. And so that just became a very simple, practical tool for me. Hey, maybe I can't do X, Y and Z with my kids, but 15 minutes before bed, that's a pretty easy thing to do. And I'm seeing how that impacted my son was a real treat and a joy.I'm thinking of our book, seeing Christian by the cross, his burden falling off, and him saying to  me, “Yeah, God ...” Or “Dad, that's what God does. He removes our burden of sin.” I remember reading David Helms' Big Picture Bible, and him seeing Jesus on the cross and saying, “I want to follow Jesus. I want to be saved from my sin. I want to know Jesus.” [12:42] JONATHAN: That's an iconic scene, isn't it? Bunyan's ... I mean, even people who haven't read the book are at least somewhat familiar with the scene of his burden falling off his back as he stands at the cross. It's such a picturesque scene. You have talked about how he's recognizing some of these things. What are the other things that are coming through the eye of the child as parents and grandparents are probably listening to this and thinking about we're trying to help formulate in our children and what they're getting from those 15 minutes before bed.[13:23] TYLER: Yeah, I think a big one I've seen, and I've heard from a lot of families, is the reality of death and eternity. And I can't think of many kids' books that hit that on the nose.[13:38] JONATHAN: Yeah, it's not coming up with regularity, that's for sure.[13:40] TYLER: Yeah, yeah. So that's not been dodged or snuck in. But reality is ... Yeah, people die. Kids are wrestling with some of these hard truths. They have some of these hard questions and they want answers to them. And so having this, again, the beauty of allegory are these spiritual truths told through images. The River of Death, the idea of someone crossing the River of Death, the sorrow of that and yet the joy of that for believers who enter the king's city, the celestial city.I've heard some very, very sweet stories from people and gotten emails that have brought me to tears where someone's reading this with their child. Their child is going through cancer and facing death, and that River of Death bringing such a comfort both to the child, the parents, siblings. And for us, when we were in Cambodia, my son would bring that up often. Because we'd left family behind and now we're going on this journey, in a sense, and that's all done in light of eternity. So these metaphors of the celestial city and living for the king's kingdom and things like that were all very helpful.And then one other story from Cambodia, which was seeing the surprise in Cambodian parents, and especially dads, that I would read to my kids for 15 minutes before bed. To me, it seemed like an obvious things. To them, it was very foreign, in literally true sense. But they were surprised. “You do that with your kids?”And I said, “Oh, you don't?”[15:20] JONATHAN: Culture shock there.[15:21] TYLER: Yeah, and they said, “No, no. They go to bed when they go to bed, and we're not too involved with that.”I said, “Oh, you should try it.” And some of them... one of the pastors could speak English, and I gave him some copies of the book. And he read it and I remember since we've left he messaged me saying, “We still do that every night. We still read to our daughter before bed. And we've gone through these books these many times and thank you for this.”I just thought that was a neat way the Lord used that.[15:53] JONATHAN: So you started with a Kickstarter fundraiser and you blew through your numbers on that. Tell us a little bit about that.[16:02] TYLER: Yeah, so again this was all kind of a leap of faith and partly the way God's wired me, willing to take a risk in that sense. So let people know this book was coming out and just kind of asked friends and family to share as widely as they could on social media and kind of leading towards this Kickstarter. So we launched, and then I was just absolutely shocked as it was within the first hour we far surpassed our initial goal. And just watching the numbers just sort of fly in was a shock and delight.[16:43] JONATHAN: It looks like you got about 500 percent of your funding. So if you were wondering if that was a need for people, that certainly made its case.[16:56] TYLER: Yes, it was awesome to see. Okay, we put all this work in and got it ready, and then, oh yes, this does resonate with other people. Other people are hungry for this kind of thing. And we've seen that tenfold since then.[17:08] JONATHAN: You've talked about how Bunyan's use of allegory helps bring forth great truths through imagery and picture. Parents are always trying to communicate the Gospel in a way for children at different ages and stages to understand. But sometimes we parents can sometimes if they don't have theological degrees like you and I, they can be overwhelmed—though having a theological degree doesn't necessarily help you in this category. It's not like how to teach children is one of the classes we get.But how do you take complex truths and break them down for children? This is one of the primary ways of doing that. But just for you as a dad of young ones, what are some of the other methodologies that you use for breaking that down for kids, big concepts that come, whether it's through Scripture or spiritual conversation or whatever it is. What other methodology do you use in an effective way?[18:21] TYLER: Yeah, yeah. A lot of at least homeschoolers talk about living books, like this idea of living books being an engaging way to teach ideas. And that's for anything—science, et cetera—to children. And allegories present this idea of a living book, which means truth is coming through in a very natural sort of conversational way. And again, I feel like Bunyan is just the master of that. So what a privilege to follow in his footsteps and to—[18:50] JONATHAN: And a good thing he was in prison, right?[18:53] TYLER: He had a very vivid imagination, and the results of just certain scenes ... And he had such a deep theology and understanding of God's Word. So I love in Part 2, which is less known (his original Part 2) there's a scene where they're walking by the cross with Great-heart, and it just goes into four or five pages on pretty technical like substitutionary atonement. But he does it in a way that's so helpful and clear, and so I loved when I was going through Part 2 to take a piece of that and just simplify it. They just go at the cross and it's a very clear explanation of what it means that the King's Son died in our place. He took our sin. He gave us his righteousness. And then that, combined with different images of Christian's filthy clothes are removed, his burden is removed. So things like that I found super helpful. And then another big piece is that kids, especially in this generation, are visual, becoming increasingly more visual learners, so that's our big slogan, Biblically Faithful, Beautifully Crafted. And the idea is to have these really vivid, beautiful illustrations that draw kids in.[20:19] JONATHAN: But they aren't too graphic.[20:20] TYLER: Yes, yes. That are age appropriate. And then also to have text that's sort of clear, deep but simple and not overwhelming, and to pair that up well. We visited a friend's house, and they had their range of kids from two to seven, and they had all the books out. They said, “We swear we're not just...”[20:44] JONATHAN: Not for you.[20:45] TYLER: “... because you're here.”[20:48] JONATHAN: It's normally like this. Well, you'd find that at our house, too. We've got both book 1 and 2 wide open on some page.[20:55] TYLER: That's awesome. And I will see them, just the kids were flipping through the pictures. Like they couldn't read yet, but—[21:03] JONATHAN: But they can remember the story associated with the picture, yeah.[21:08] TYLER: And they just loved flipping through it and looking. And they stare at all the details. And so I think that's another aspect that I found very helpful is just these vivid images in books.[21:18] JONATHAN: Apart from story time with your kids, are there rhythms or patterns or activities that you try and work in to family time that you've found successful at your home?[21:34] TYLER: Yeah, I wish I could have more to say. The story book has sort of been my big main one. The other was—[21:42] JONATHAN: And your big emphasis for sure.[21:44] TYLER: But the other has been sort of the Deuteronomy type of while you are going, while you are walking by the way to instruct your kids in these things. So where he's just saying, “Write it on your doorstops. Write it on ...” Like everywhere you're going, just have these moments. So where kids are inquisitive, kids ask. It's a crazy amount of questions per day, I think when you actually ... when you've done studies of that, I'm sure.But if you're feeding them these biblical things, then they're going to have questions about biblical things that come up naturally. Which was another little piece. I mean, like maybe my dad [unintelligible] or something. We'd always have at nighttime, it would be like, “Oh, you can watch a show, but it's going to be a Bible show.”I know different families have different rhythms and some don't like shows and some like shows. But first it was an easy switch to just say, “You want to watch Paw Patrol. Instead, let's watch something else.” And a lot of those ended up being moralistic, as we kind of said. But at least it's touching on biblical things.[22:51] JONATHAN: Well, and you're able to elaborate from that and helpfully redirect them towards a cross-centric faith instead of a duty sort of centrism.[23:07] TYLER: Yeah, definitely. And so those have led to a neat where they're just thinking about things and things are resonating. And so my grandma had died last year, and my son said, “Can we call her?” Like after she died. “Can we video call her because I want to see God? Because she's with God.” And so I was like, oh, that's such an interesting ...[23:33] JONATHAN: He's got a deep truth with some confusion.[23:38] TYLER: “She's in the presence of God, why wouldn't she have her cell phone? We used to call her. Now can't we call her now?” So then you just have these neat opportunities when you're just there. There's the input, intentional biblical input, and then they're going to be inquisitive, asking questions through the day as we experience ... “Why does this family do that? Why does my friend have a mom but no dad around?” Or “Why does this cousin not believe in Jesus?” and things like that.[24:12] JONATHAN: Yeah. Having kids keeps you on your toes. And if you're a believing family, then there's a lot of questions that I think even the greatest of us could stumble over and so you really need to be filling your own mind with helpful resources. You need to be in the Word and seeking to grow in understanding and knowledge and faith and bearing that fruit of the Spirit. There's, you know, as we kind of laughed about, I mean, kids ask a ridiculous amount of questions. And there's times where I think sometimes I'm like, “I'm done. Done answering your questions. I don't want to do this anymore.”And that's typical selfish mentality of this is about me and not you. But you know, you kind of flip the script a little bit and start thinking, Okay, this could be a really great opportunity for them. And in all their questions there's usually something underlying all of that. Fear, doubt, whatever it is. Or sometimes it is just curiosity. So it's important, I think, for parents to be as available as humanly possible, and really thinking through those things.And I think sometimes people are afraid. What if I don't know the answer? Then I'm going to fail my child, or whatever it is. And it's like, you know, kids don't think in that category necessarily. I think it's actually quite biblical to say, “You know what? You're asking really good questions. Why don't we look at this together? Why don't we kind of use this as an opportunity to show that mom and dad don't know everything, and they're seeking to grow just like you are?” So tell us a little bit about the Kingdom of God story books. This is another project that you've done. I don't know if it was before or after Little Pilgrim, Big Journey, but tell us a little bit about that.[26:12] TYLER: That was after the Pilgrim book, so that was six or seven months ago those landed. And that was a big project, and an exciting—[26:22] JONATHAN: Yeah, taking Old and New Testament, that's a big undertaking.[26:28] TYLER: That was the most challenging book I've written, obviously, because you want to do honor to God's Word and to be faithful. And initially it was going to be bird's eye overview. So I thought 70 pages and we'll touch on seven different kind of key moments that highlight the kingdom through the Bible. And then as I got into it, I said, Oh, it's still missing ... like there's something ... [26:53] JONATHAN: It's always something.[26:54] TYLER: ... in between these. And so that grew to 140, and then 280, and then all of a sudden it's—[27:01] JONATHAN: It's summer reading.[27:03] TYLER: Yeah, suddenly it's a 600-page fully illustrated 45-chapter thing. And the two big goals were one was to incorporate biblical theology, which was to have these themes that are tied through, woven through from Genesis to Revelation, and so the kingdom is one of those big themes. And there's many others. So that was an exciting challenge. And then seeing prophecies of the King to come in the Old Testament. There's so many of those. So to highlight those in a very vivid and helpful way was an exciting piece of that. And then just to give a clear understanding of God's kingdom. As Jesus said, “The Kingdom of God is now in your midst.” He said, “I have come for this purpose: to proclaim the Kingdom of God.” So if that's His understanding, He's saying, “For me to come and fulfill what God has promised is to display myself as the King of God's kingdom,” which He saw as clearly foreshadowed and set up in the Old Testament. So doing that in a kind of full way that knits. The goal was to sort of be seamless between each chapter and between each kind of scene or book. And the summary of it was God's presence, God's people, in God's place, through God's promise. And each chapter kind of has a summary in that way to connect those things.[28:28] JONATHAN: Ah, that's great. Books on the horizon. I think you have a third Pilgrim's Progress book coming out. Little Pilgrim, Big Journey, I should call it. I keep calling it Pilgrim's Progress. [28:38] TYLER: That's okay. Yeah, Part 3, which I'm excited about, it's about the two brothers, Christian's brothers. They saw their sister cross the River of Death and the king said it was not time for them to come yet. And I thought that was kind of a neat way to extend the allegory. Because some kids have viewed it, okay, we're going across this journey and then we get to death and then it's done. And there's this bigger picture of mission and evangelism and service. So kind of a follow-up to that. This idea is the king, instead of calling them to cross the River of Death, calls them to go back to their hometown, back to the cities, to proclaim the Gospel and to proclaim that the kingdom is coming. And so these brothers go and they experience the ideas of the Great Commission, missions, evangelism.[29:29] JONATHAN: Yeah, they've taken the mantle from Evangelist.[29:34] TYLER: Yeah. Yeah, so it's kind of an exciting. As even Evangelist and Great-heart pass, they say, over the River of Death, they say, “You take my sword. You go on.” And so I think that's a neat challenge and call for kids that have professed faith in Christ now to go back to serve, to spread the Gospel to their friends. And so I'm excited about that book.And then there's also. Our tribute to Bunyan was a legacy edition of the Pilgrim's Progress, so just a full, unabridged version more geared towards adults or older kids, teens. And has kind of 150 of the vintage illustrations and it's just a real treat to read.[30:17] JONATHAN: Well, my son will be excited for the third. Because he did ask why are Christiana's brothers stuck on the other side of the river. And so I can give him good news that the third one is coming. This is great. What a helpful conversation. We're going to put links for your website and all your books in our show notes. So those of you who are listening, I do recommend these. These are just fantastic. The illustrations are beautiful, they are age appropriate. The story brings through great truths and you'll have great questions. You do have questions that you ask. My son loves asking questions, and he loves answering questions as well. And so the fact that each chapter has questions that are asked—and they're not just recalling information, but there is some application in there as well, which really kind of speaks ... You know, because kids want to have understanding and then kind of relay that back to you. So I think that's been a great tool that you guys have put together on that.[31:24] TYLER: Yeah, that's been exciting. Initially, again, God has been gracious in this whole process. Because the first book, I was getting ready to print it, and then I just kind of asked on social media, “Would anyone find questions helpful?” And there was just a ton of response, “Yes, yes, please, please.” So I put them in.[31:40] JONATHAN: 500 percent again.[31:41] TYLER: Yeah, yeah. And a lot of parents have told us, yeah, these questions at the end of every chapter is such a help in our discipleship.[31:48] JONATHAN: It's so good. So helpful. Tyler Van Halteren, I am so grateful to have met you now that I've read through your books. And I hope that they continue to be a blessing for generations, just as John Bunyan has been for many centuries. And again, thank you so much for taking the time to come and chat with us on Candid Conversations. [32:09] TYLER: Yeah, thank you. 

Have you ever considered the miraculous power of the Gospel message as it transcends borders, languages, and opposition? In this episode, we talk about the profound influence of Christian media in the Arab-speaking world through the compelling experiences of Farid Garas, the Senior Director of THE KINGDOM SAT satellite television and internet channel – a media outreach of Leading The Way with Dr. Michael Youssef.Farid's narrative is not just about spreading the Gospel; it's a journey of overcoming adversity, embracing his identity in Christ, and changing lives in a region where broadcasting Christian content can defy expectations and alter eternity.Embark on a captivating journey with Farid, a man who once questioned Christianity but now plays a pivotal role in shaping Christian media in a region where such content has often faced significant obstacles. His encounters with authorities, far from deterring him, only reinforced his commitment to his faith and mission, making his story a testament to the power of unwavering faith in Christ.Through this conversation, Farid highlights the strategic use of drama, film, and satellite television to spread the Christian message, reaching out to believers and those searching for Truth in tumultuous times. He discusses the growth of THE KINGDOM SAT, its impact, and the continuous efforts to foster a connection with the audience through live broadcasts and digital platforms.This episode not only delves into Farid's personal and professional life but also provides a deeper understanding of the challenges and opportunities in media and ministry. Through their resilience and dedication, Farid and THE KINGDOM SAT team offer hope to millions in the Middle East, demonstrating the transformative potential of faith-based media in the face of adversity.To ask Jonathan a question or connect with the Candid community, visit https://LTW.org/CandidFacebook: https://www.facebook.com/candidpodInstagram: https://www.instagram.com/candidpodTwitter: https://twitter.com/thecandidpodTRANSCRIPT:This transcript recounts Candid Conversations with Jonathan Youssef Episode 251: Broadcasting Hope: Farid Garas.[01:28] JONATHAN: Today we have a special guest, an in-house guest here at Leading The Way. Farid Garas is the senior director of the Kingdom Sat. The Kingdom Sat is our 24/7 satellite channel for the Arab-speaking world, taking biblical teaching and different types of programming through satellite television and internet to the Arab-speaking population. He has become a good friend and I am so honored to have him joining us on Candid Conversations. Farid, thank you for joining us.[02:06] Farid: Thank you, Jonathan, and I would say congratulations. This is the first podcast after being Dr. Jonathan Youssef. So congratulations. It's an honor to be with you.[02:16] JONATHAN: Well, it's an honor to be with you. And you are doing some doctoral work yourself. And we can get into that a little bit later for those who are listening, you're from Egypt. Tell us a little bit about growing up and your life story and then we can transition into how you got into broadcast ministry. [02:39] Farid: Yeah. I feel I am a minority of the minority, an evangelical Christian in Egypt. And that was a great blessing. I didn't like it in the beginning, feeling that minority I'm not like everyone else, but it was great. My father was a scientist. He studied science, and he didn't like all the Christian religious ideas at that time, talking mainly about the traditional Coptic traditions or Christian traditions. And he always thought that those Christians are cheesy and he didn't like that. So his two sisters invited him to a Christian conference, and he said, “Okay, I'll go. But after the first day I will not like it and I will go back home.” So he tried to flee from the conference three times, and those good Christians would go after him and bring him back.[03:42] JONATHAN: Kicking and screaming.[03:44] Farid: Yeah. So God grabbed his attention through Bible study, and also because of the witness of those Christians that went after him. He discovered that those Christians are really good people. They are professionals. They are not cheesy. They are very intellectual, they are funny, they are successful. So he was attracted to God by the witness and the Bible study. The following year, after studying the Bible for one year, he became very excited about this paradigm shift that God allowed him to go through just by knowing the Lord, and he led the conference the following year. He invited eighteen people from his family, young people, and long story short, they all became Christians. They confessed … they gave their lives to the Lord.[04:36] JONATHAN: Were they from a Coptic background? [04:41] Farid: Yeah, they are nominal Christians, mainly. And many of them are leaders in the Christian ministry now. And he played a great role in my life, not just by the Christian teaching, but by his example to me. And he showed me it was a balance between unconditional love and discipline. And it's like your father played a great role in your life, and that prepared me to know the Lord more and to be ready for ministry.[05:14] JONATHAN: Yeah, yeah. So tell us a little bit about your upbringing. Your father's obviously grown into leadership roles within the Christian community, the evangelical community. You're grown up in a covenant home, where you've heard the Word taught. Tell us a little bit about your faith journey.[05:37] Farid: Yeah. So my father and mother brought us in a church setting and in a covenant environment, and they prepared us to hear the word of the Lord in house and also in church. But as a teenager, even a kid in an evangelical church, you get to hear the salvation message more than one time. But one time I remember, and the teacher has related with me, it was a play about the end of days. And the last line in the play, the main character talks to the audience and says, “What if Jesus came today? Are you going to be here or there?”And of course, it was so dramatic. And so I went home and couldn't sleep. I was thinking of all the events of that day. Is my life really Christian? Am I up to the standard that God accepts? And do I enjoy His redemption just because I want to get released of the … get out of … get out of hell?[06:50] JONATHAN: Yeah, sure. Get out of hell.[06:53] Farid: If only that reason, not relationship. So I couldn't sleep, thinking about all these things, and I had to go to the school the following day. I was so tired. So I came back after the school, had a nap, woke up, found I'm home alone; nobody's home. So I thought, “Uh, oh.”[07:14] JONATHAN: It's happened.[07:16] Farid: Yeah. So this was one of the times that God not only grabbed my attention I think He was preparing me for how media ministry could be a tool in evangelism and in Christian life.[07:34] JONATHAN: So the impact of that performance left a mark on you that you wanted to continue to build upon that.[07:44] Farid: Yes. After that, I was becoming like a dedicated Christian. Okay, I need to study the word. I need to practice all these things. And as a result for that, I was invited by the Christian religion teacher, in the middle school, to talk. We have those Christian classes. They separate Muslims and Christians, each group in one class, and there is a curriculum, but he would finish the curriculum and then ask me, “Okay, Farid, tell us what you think about this.”Mainly, I'm the only evangelical. He wanted to know what those evangelicals say, so I would share. And then mostly it went all right, apart from one of my colleagues who was very rigid, very extreme, and he would say all those things, “Oh, you evangelicals say this.” “Oh, you say that.” And long story, but it ended up that we became best friends and he gave his life to the Lord. We used to study every night together and so on. And after he became Christian, he has these leadership qualities and he became also excited. And together we started this evangelistic drama team. This drama team grew very fast because it was very effective. We wrote our own plays, we performed in churches, in youth meetings. Even we started our like independent Christian theater festivals. Like we would do three plays in three nights, and it was very well received. Like most of the nights we find that we have double the number of audience, so we need to perform twice and so on. And we even came here to Atlanta in 1996, during the Olympics, to help in evangelistic campaigns for the Arabic speakers.[09:59] JONATHAN: Wow. I don't know what to call it. The drama bug had been captured and you're seeing this as a tool for evangelism, for outreach even internationally., I think you start to recognize that this is only a small stage. Explain to us how the doors opened up to having a bigger reach and a bigger audience.[10:30] Farid: Yeah, the drama bug is only like a tool in evangelism. And in the Christian media I've been for many years, you would find like two extremes. One extreme you would find some very interesting, exciting but shallow content. On the other side you can find very good, deep teaching, very sophisticated, spiritual, biblical but sometimes boring. [10:57] JONATHAN: This is through television medium.[10:59] Farid: Yeah. And the theater and radio. So, I mean what was special about this team that God showed us how He could use the good content, because the gospel is the core. And when we started presenting the gospel in the drama tool that would communicate to people in our age, we found that it needs to be like this formula. We cannot let one play to be just popular because it's funny. And we found that God is growing the work.So it started with theater, then we started to do some radio with TransWorld Radio, like doing drama on radio and so on. And we went to television. You know in Egypt in those years, early, until early 90s, there's no Christian content available for public audience, even Christians. We are 10 to 15 percent. But the national television would allow a Christian Mass only on Christmas, so it's like one hour per year.So we said, okay, how can we break into television? And it was hard. There was no way. So we tried to read books, practice, and we started like drama schools. We don't know anything, but we start inviting people to teach us. And I wanted to study more about media like in a professional way, so I saved money, worked for eight years, then came here to the States, studied digital filmmaking school, did some internship. Then went back to Egypt, completed more studies, did the diploma in film production and directing in the American university.[13:00] JONATHAN: So your heart was always to go back to Egypt. Yeah.[13:03] Farid: Yes. I mean, it was very good over here. I studied in Hawaii, then internship in San Diego. The goal is to do ministry, so I went back to Egypt and completed this study, which allowed me to be part of the cinema syndicate and also to have my own production house. So it all started from just the first play that introduced me to the Lord, and then it continued to do more. Now I have to do more work for the mainstream media and the Christian. And this production house was very successful. God gave me favor in my vendors and producers and it went fast because mainly I learned here in America a different style than the Egyptian national television. Minimum crew doing quality work in a different way. Of course, technology and so on. And I got the hands-on experience. So I had still the main goal was to do ministry using media, but I was able to fund the Christian work from the secular work I used to do—mainly corporate videos, advertisements and documentaries and so on. So they complemented each other. And it grew like for 2003 to 2009 like for six years.[14:44] JONATHAN: Wow. Wow. Sort of paint a picture for us. What does it look like, up to that point, before there's television broadcasts, evangelistic broadcasts being allowed in the country? What did sort of radio and drama team, what does that kind of penetration into the population look like? [15:07] Farid: I mean, you could easily say there is none official media for Christians. They would allow some official magazine or newspaper from the Coptic Church and some from the evangelical, but mainly they would be accepted only in a church setting. So there is no mass media, no radio. So we had Christian radio, TransWorld Radio, that was being broadcast from—[15:40] JONATHAN: South of France, yeah. Monaco.[15:41] Farid: So you could only receive it at like 10:30 PM to 11:30 PM, and you have to be in an area where there's not a lot of buildings and so on. It was a great blessing. Many people knew the Lord from it. But it didn't serve the mass, those true seekers—Muslims, Christians, nominal Christians. So that was the case until '96 when Christian satellite was there as a technology. The government didn't allow it, but it was there.[16:16] JONATHAN: So that's kind of your introduction into the television world in terms of Christianity.[16:24] Farid: Yes. I mean, it's now available. Can we break into that? After the study and this production house, I was able to share in lots of production. And before that, God had prepared me with working in dubbing Christian media, like Jesus Film, VeggieTales, Super Book, as an actor. And it was a great experience.[16:55] JONATHAN: And where were those being broadcast?[16:58] Farid: In one of the production houses that actually it's like a Christian place but also recognized as a production house. So I got some training in that, and when the satellite started, I was one of the first ones that were ready to do a part.[17:19] JONATHAN: So let's kind of move the timeline forward as Christian media is now being produced. And at what point does the government allow satellite broadcasting?[17:35] Farid: You know they didn't allow it because satellite is broadcasted from abroad. So in order to stop it, they had to stop all the bouquet of channels, so they couldn't do that. So it first started on one of the satellites that was Europe-based, but if you have a big satellite dish and receiver, you could receive it at home. And it's different than here in America. I mean, satellite in the Middle East is free to own. So you just spend maybe $15 or so to have a device recorder and you receive about two thousand channels. So among them are one Christian channel, so if the government wants to stop, they have to stop everything, so they couldn't. [18:31] JONATHAN: Right. There'd be too much backlash. [18:48] So let's fast-forward. It's 2009. You're very busy. Tell us a little bit about what's going on in that year.[18:57] Farid: Yeah. It was a very important year. At that time, I was busy doing production with different now-Christian satellites. They are more than one now and I already started as a part time in one of the satellite ministries out there and at the same time I was having my production house. And I read a book in one of my visits to Europe and America about Muslim testimonies. You never read those in Egypt, so I thought maybe I should film some. I was naïve. I didn't know everything is like under surveillance. So I had this studio in my production house. I was doing lots of projects, but this one I said, okay, I need to be careful just in case, so I'll do it in a secret environment.But it wasn't. So I filmed those testimonies and the following day I started to get visits from the national security. And the way it was done, it wasn't like—they didn't come and say, “We are the national security. WE want to investigate those Christian projects.” No. First they would send like one department of some kind of police, checking the social security or checking the telephone or electricity.[20:40] JONATHAN: They were spying on you.[20:42] Farid: They were—I mean, in Egypt, I mean, not all the businesses would have all the papers right. So the plan was to find something wrong to make a case against this office without saying it's religious, just to keep the face for the media in the West. So they didn't find anything wrong. It took like five weeks, several visits. So the last one they said, “Okay, there is a censorship case against you.” Usually, those are copyrights or not using original software, which is very common in Egypt. But my software was original. I had no violations. But the case was still there. And then the national security officer called me in his office. I mean, before all that happened, God prepared me. I had this shooting day with kids at 9:00 AM. [21:45] JONATHAN: Filming, yeah.[21:46] Farid: Yeah, it was prepared and everything is in place and I had a dream or vision that I woke up early, like 5:00 AM, very alert with this impression that an officer or someone from the security will come and ask about me. And I knew this was from the Lord because it came with a sense of peace. It should be scary because I know what could happen.[22:17] JONATHAN: Yeah, right. And you've got a wife and kids and—[22:20] Farid: Yeah. It's … So I started praying, like reading the Bible and committing the day to the Lord, and I met my friend and production manager at 7:00 AM. I said I had this dream, so I smiled and he said, “What do you want to do? Do you want to cancel shooting today?” I said, “No, no. But if the officer came, please call me outside not to scare the kids.”And we started at 9:00 AM filming. Everything went all right until 3:00 PM I got the visit. They mainly told me “There is a warrant against you. Come to the national security office at 11:00 PM” at night. That's like usual part of the environment you're put in. And at that meeting, the officer confronted me. “Why are you filming those infidels?” according to the apostate law, they were Muslims, now they are Christians, they are supposed to be under this apostasy law. Apostasy law in Islam if someone left Islam he's supposed to be executed. It's not applied in Egypt, but the concept is there, so it's not allowed by the families or by the regime or—[23:45] JONATHAN: Right. It's an intimidation factor, yeah.[23:47] Farid: Yeah, for the what they call the public peace and so on. And he said, “Why did you do that?” I said, “I'm a professional director and filming what they have to say.” And he said, “Yeah, but tell me how much would you take, I see you produce a lot of Christian content.” I said, “Yes.” He said, “Okay, this Christian music video,” it's all like a lot of content from my production house. “How much do you take like to produce one?”I said, “Yeah, like one thousand pounds.”“Okay, what if you do like a music video, secular, mainstream one?” He said, “How much would you take?”I said, “I will be like about fifteen.” “Fifteen thousand to one thousand. So why would you choose to do the Christian work?”I said, “I'd like you to watch one of those music videos, secular ones. Would you be happy to show them to your family, to your kids? I want my family to be proud about what I present.”And he said, “Okay, why did you film those testimonies or stories. For them it's like disaster.”I said, “They … I mean, according to the constitution, we have freedom of speech, right?”“Oh yeah, okay.” And he said, “Okay, do you have license for the production?”I said, “Yes.” And he started asking questions, and we ended up having a case of censorship. And I asked the lawyer at that time, “Okay, why is it censorship. I had nothing wrong.”He said, “Yeah, because it's national security, it's classified. They cannot declare it.” And this lawyer was a Muslim. He said, “We're going to win this.”So God placed that lawyer after like four different lawyers, and that lawyer took maybe five months to one year, I think, until the case was resolved. And it was what was so-called Arab Spring, the revolution.[26:00] JONATHAN: Yeah, the people will remember watching that footage back at 2011 and the revolution in the streets and the overthrow of Mubarak and then somewhat of an election that took place afterwards, yeah.[26:18] Farid: Yes. And during that time, the case was released. And actually they had confiscated two of my editing machines. One of them had my first Christian evangelistic feature film footage and the other one had the backup, so it was unfortunate. I have many other agents witness, but then God really gave us favor in getting those back after all the police stations were burned and somehow God kept those editing suites and the footage, and this film was released and it was even screened here in America. It's an evangelistic movie about an immigrant who thinks that he's persecuted because he's Christian. He doesn't know that his problem is he doesn't have this relationship with God. So he comes here to America and finds that there is another set of challenges, and then he gets to know the Lord and then his life starts to take a positive turn and that film was here in cinemas in I think 2012 and it was shown in five states who have heavy Arabic-speakers population. [27:46] JONATHAN: Well, this wasn't your only run-in with the Egyptian authorities. You continue to produce content and then you find yourself in a similar situation—a worse situation. [28:02] Farid: Yes. Now I have a file. [28:06] JONATHAN: That's right.[28:22] Farid: Yeah, during those years, God made a great awakening in Egypt after the revolution. It was both religious, ritual, biblical and also political for young people especially. And there was not a lot of control at that time, so a lot of ministries were able to go out and do more. One of them was this Christian satellite that I was part of, and God gave us a chance to do things we never were able to do before, like this prayer night, twelve-hours prayer gathering, around 35 thousand. That's like first time in Egypt. And they were gathered at the Cave Church, praying from night to morning, because police were not there. Usually, police does not allow this in the name of security and also—[29:25] JONATHAN: I mean, just for context, this is after the election of—remind me his name.[29:34] Farid: Sisi?[29:35] JONATHAN: No. Before Sisi. Morsi. So this is after the election of Mohammed Morsi.[29:41] Farid: No, this was in 2011.[29:42] JONATHAN: In between. Okay, so this is after Mubarak has been sort of deposed.[29:52] Farid: Yeah. I mean, the army was in control at that time, but there was no president, so there was some more freedom.[29:59] JONATHAN: So there's these all-night prayer meetings taking place in this Cave Church.[30:04] Farid: Yeah. This was 11/11/2011, and it was a great night because it was from all non-official Christian leaders gathering together. And a lot of people, a lot Christians—and Muslims—gathered. Because of all what was happening, people were praying, “God, we need you in this country.”And the satellite ministry I was in broadcasted that live. We experienced a lot of trials for interruption, but God miraculously allowed us to be alive. And a lot of the mainstream media were shocked to see what was happening with the number of people, the prayers for peace, including Al-Jazeera channel. So they called me and said, “Can we have your feed?” And I said, “Sure, of course.” [31:01] JONATHAN: You said 35 thousand people gathered.[31:03] Farid: Yes. [31:04] JONATHAN: I mean, that's just hard to imagine.[31:07] Farid: So a lot of these events took place, a lot of production, a lot of live programs on satellite, and people were all the time looking at news and they really were looking for hope. They lost trust in the government, they lose trust sometimes in their religious leaders, and they were looking for Jesus. And we presented the hope of Jesus Christ through satellite ministry. So the regime came back in 2014 and another case was—I mean, the same scenario happened again. They came to the satellite ministry office, confiscated the machines, like a lot of people, I think there were eleven, twelve people, and they were looking for me. It was the weekend and I wasn't there, so they called me. I went there and then direct to jail, to a case of five charges, very serious charges.[32:12] JONATHAN: Each of them carried the penalty of fifteen to twenty-five years.[32:15] Farid: The minimum. The minimum one of them. And of course, they were false accusations, but in those cases, it doesn't matter.[32:29] JONATHAN: Justice may not prevail.[32:30] Farid: Yeah, it was serious, but the team members started praying, and actually many prayers around the world started because this time it was this Christian ministry, so it was well known. When this happened in 2009 in my office, nobody knew because it's like my private thing. But now many people started to pray. But it wasn't the only case at that time. I mean, the regime started to be back and there was a message through different things. Okay, the regime is back, everything needs to be back now in law and order according to our system. So those who took more freedom politically, they need to go back to their borders, to their limit. Christians who have been talking and doing a lot of ministry, no, they need to stop.[33:25] JONATHAN: Restricted freedoms, yeah.[33:28] Farid: Islamists need to do the same. So they closed a lot of Muslim channels and they had many cases against activists and the revolutionists. And this was the biggest satellite ministry, so this was like a statement that no one needs … everyone needs to go back to the original setup. You should know your limits. Don't evangelize Muslims, don't get too involved in politics and so on. So this case was very serious, and I got very scared. Just I remember in jail that night just thinking. I read the law, and it seemed like I'll not go out. And just thinking of my three kids and my wife and said, “Lord, what is going to happen?” I got really … it's like a panic attack what would happen.And the other prisoner that was in the same cell had smuggled a cell phone, so he said, “Yeah, do you want to talk to your family?” I said, “Yes.” “Okay, I'll give you a call. Let them transfer $15 for each minute.”So I called my wife, and she said, “We're praying for you.” And my eleven-years daughter said, “We're praying for you and I want to share with you the verse from Joshua, ‘Be courageous and be strong.'” And it communicated to my spirit.In the first case, my wife was afraid. She used to walk in the streets with the kids, holding her passports in her case because it was so scary with all those visits. But this time, I was scared, she was confident, and she encouraged me. And my daughter, my kids, at that time they were very young, but somehow God gave them peace, although I was in jail.And miraculously, God resolved this case. And you won't believe this, Jonathan, but all the cases that were initiated at that time are not resolved till today.[36:02] JONATHAN: Except for yours.[36:03] Farid: Yeah. It was a miracle. I can tell you details, but it was a miracle by the hand of God. And yeah, so I—Actually, it was a very special testimony for me during those times. I was released from jail, but the case was still there, so I had a conversation with God. And I said, “God, I am scared. I think it's time to flee the country.”And I felt in my spirit God is saying no. I said, “Why, God? There are biblical escapes. Joseph and Mary and the baby. Could this be one?”[36:46] JONATHAN: Peter, Paul.[36:47] Farid: Yeah. Can you let me go? How do I face those charges? There was no way this case is going to be resolved. And God asked me one question. He said, “Do you believe what you present on screen, or this is separate from you actually?”[37:08] JONATHAN: Is your faith in the thing that you stand behind as a broadcast, yeah, yeah.[37:13] Farid: “Is it only for commercial or is it real? Do you believe I can resolve this no matter what laws are there, no matter what situation?”And I met with my mentors, I prayed with my wife, and I spent time with the Lord the same night, and I ended up saying, “God, I'm yours and I have peace to stay and I am not afraid but I trust you will take care of this, whatever happens.”And I returned the flight ticket I had booked. Actually, my wife said, when I said that, she felt like I'm under a lot of pressure. She said, “Yeah, you can buy a ticket and we have twenty-four hours to return it for free.” And I returned the ticket and it took those five months of investigations, visiting court and all that, but it was resolved. And I spent a few more months in the same ministry and I felt it's time to move on and I felt, okay, I need now some time to pray and see what is next. I had confidence through prayer and through checking with my leaders that it is time for me to move on. But I stayed until God said yes and got the blessing of the leaders and family and all that. And I became independent now, not knowing what to do, and spent some time to pray and ask God what's next.[39:02] JONATHAN: And what was next? You had a special introduction, you read a book, you read another book.[39:12] Farid: Yeah! You know I was in a trip in 2014 while being very busy with my production house and our satellite ministry, so in that trip to Lebanon, I had some free time at night. I finished meetings and I selected a book from the library, and it was Dr. Youssef's book, Trust and Obey. And I couldn't stop reading it until I finished it, because I could resonate with him. And now I know Dr. Youssef from satellite, I know his faithfulness to the Word of God, but I don't know him as a person. I mean, I know him as a minister, as a speaker. So his testimony in Trust and Obey was very fascinating for me. I could visualize what he was telling in his book about his upbringing and all his stages he went through, because of course, my journey was much shorter, different, but I could understand a lot of what he was saying from being there in this culture that he was brought in.And I said this book should be filmed sometime, I mean this testimony. But I have no way of doing that. And so it took two years, and now I am free after 2016. I now have no job. I went to Germany, where my wife's family are having ministry there, and we stayed there a few months to pray and seek God, and then I got an invitation from Joshua Youssef. “Why don't you come to help us at the Kingdom Sat?”I said, “I just moved from Egypt to Germany. I'm not sure what's coming.”He said, “Yeah, pray about it and maybe you can start on a contractor basis, as a consultant.”So I said, yes, that seems good. I prayed about it, of course, and I started coming here to the Kingdom Sat, Leading The Way, and started coming every month for one week or so. And after six months, I had total peace about it and I said, “Yes, Joshua, if you still feel there is a place for me.”He said yes. I met with Dr. Youssef, of course, and they took around one more year to do the visa work and so on, and then I came and joined Kingdom Sat. That was in 2017.[41:46] JONATHAN: Tell us about Kingdom Sat. For our listeners who maybe aren't familiar, broadcasting started in 2009, you joined the team in 2017. Who does it reach? Where does it go? What's the fruit that's being borne from it?[42:07] Farid: Yeah, the Kingdom Sat is a vision of Dr. Youssef. God gave him the vision in 2004, and it took five years in the making because he wanted to have a solid, biblical channel that broadcast the best of the east and the best of the west in terms of Bible teaching. And God used Maged Atalla, my colleague, to start this. He's an engineer. He made a great foundation following the vision of Dr. Youssef and a lot of partners who came together with Dr. Youssef to present their content on the Kingdom Sat that's being translated into Arabic. So this was a big part of what's being broadcasted on the Kingdom Sat, along with selected Bible teachers from the Middle East as well.So it was a great foundation. So I came on a great foundation on a time where social media was coming, live broadcast was being introduced more and more, and when I joined, Joshua asked me, “What proposal do you have for the Kingdom Sat? What do you think?”And I presented a proposal and mainline I met with him and Dr. Youssef and said, “This is what I think. I think Kingdom Sat is a great channel, but it's more like radio. If you turn the screen off and only listen, you don't lose anything. We have a great tool. We can present visuals. We can do more. So I think it's great, but one of the things that we need to do is doing more formats, more genres. We need to reach more people—especially those who are underprivileged like women, kids, young people in the Middle East. And we need to reach out to the non-Christians. He said, “Yeah, this is our vision.” And actually Dr. Youssef said, “Yeah, actually we made a survey and this is what we reached.” And he quoted one of the friends in Egypt. He told them “the Kingdom Sat is like a big, huge, elegant department store, but you enter and you found only navy blue suits, size 42.”And he laughed at that and they said, “Yes, we want to do more.”And I started working on that, like different lines like having broadcasting live, like have live broadcasts, especially from Church of the Apostles. And this was a continuation for the people in the Middle East to know what's this vision. Who is Dr. Youssef? Who is Jonathan? Who are those singers in the Church of the Apostles? And I think that made a great connection, especially with those who don't have churches, like in Nigeria or those places—[45:25] JONATHAN: Where you're isolated and—[45:27] Farid: And they write on Facebook when we broadcast live. For example, when you're preaching they would say, “Oh Jonathan, God bless you and God bless your father. God bless the church,” as if they are there in the church. And in the communion time, they will talk “We don't have a church, so we're taking communion with you now. We're praying.”And the first time in Easter 2018 it was the first time to do live, God encouraged us by two Arabic speakers in the Middle East giving their lives to the Lord. So it was encouragement so we started that once a month, then during the COVID time, we started to do it on a regular basis. So it's a great blessing to have these live broadcasts. And we started to introduce a lot of digital platforms, like Apple TV, Roku, Smartphone application. We updated the website and streaming. So we started to add more genres, add more partners from the west and east, so a lot of things happened.And today the Kingdom Sat reaches 260 million households in the Middle East, and they receive this ministry for free. And anyone with an internet connection can receive the content of the Kingdom Sat.[46:47] JONATHAN: And let's talk a little bit about the follow-up process, because you have people that are standing by phones to answer calls. What are some of the questions and feedback that you get from the broadcast?[47:03] Farid: A lot of viewers are very true seekers, even those from Muslim background, and they are faithful. They really seek God. So they send questions, sometimes in a provoking way, sometimes attacking, but they keep watching. They will attack one time, and then the field team would respond to them in a graceful way and helping them, so they would come back, watch again, and raise another question. And we have great testimonies of those viewers that only watched by chance the Kingdom Sat, they watch some program, and they would keep interacting with us until they become Christians, they commit their lives to the Lord, and they get baptized. Then they join an online study group for discipleship or we would connect them with a local church. So this is one type of persons, those true seekers. And as I said, it changes from very extreme attackers to true seekers that are ready to accept Christ.And the second persona we serve is the new believers. Some people knew the Lord through the Kingdom Sat or online or somewhere else but they don't have a place to grow.[48:37] JONATHAN: They need discipleship, yeah.[48:39] Farid: Yeah, and not to compare, but the Kingdom Sat is very distinct about presenting biblical teaching, solid. Other ministries would present this shallow content that we spoke about. So that's the second persona, like new believers. Third persona is mature believers who are in ministry, for example, and they want to grow, they want to learn. And some of those viewers would write, for example, in YouTube, “I am watching the series so-and-so for Dr. Youssef. Where is episode number 15? I want to finish it tonight!”[49:19] JONATHAN: We're on top of you. That's right.[49:21] Farid: So they are the three main personas. There are subcategories, but we have a great field team that is dealing 24/7 with any viewer who has a question or he wants a prayer request or they ask even other, general questions.[49:39] JONATHAN: And what's the risk for those people that are on the ground, field team workers? I mean, you're working in a hostile environment. It's not like you're in Oklahoma fielding calls. You're in the thick of it.[49:54] Farid: That have the same risk I faced. And yeah, I mean, but again what I experienced. They are also in the protection of God. But they could be charged, they could be persecuted, detained, or all this could happen in an indirect way by the community, by their families. But this doesn't stop them. Most of those in the field team are coming from a Muslim background, have theology degree, so that's their life goal, their vision.[50:39] JONATHAN: Well Farid, your story is just … it's fascinating to me the beginning with the drama, you coming to the West, coming to America, then going back, facing the adversities, then coming back here and now you're presenting on a global stage the very thing that led you to the Lord. And we're just so thankful for the work that you do and the work of the Kingdom Sat. And we're so grateful that you took the time to sit with us and share your story here on Candid Conversations. Thank you for being with us.[51:13] Farid: Thank you, Jonathan. It's an honor to be here, and it's great to be in the kitchen how things are done here. And I see the hand of the Lord every day in this, in your family, in the ministry of the Church of the Apostles, Leading The Way, and it's God work and I'm very grateful to be here.[51:35] JONATHAN: Well, we're grateful for you. Thank you, Farid.[51:36] Farid: Thank you.

This week we welcome Jonathan Hornell-Kennedy from Canada's Framework Bikes. Jonathan is a relative newcomer to the world of bicycle framebuilding, but his background in manufacturing and design supporting the aerospace industry provided him with some unique skills and insights he brings to his craft. Jonathan sheds light on his entry into custom bike building, sharing the evolution of his process. He explains the meticulous method behind the creation of his unique carbon fiber tubes and aluminum lugs. We delve into what makes these bikes versatile on various terrains, and the challenges and decision-making involved in custom builds. Jonathan also touches on the struggles of establishing his brand within the competitive bike industry.  The conversation rounds off with discussions about the future of Frameworks. Join us for an insightful conversation, as we delve deeper into the fascinating world of custom bike building.  Framework Bikes Instagram Episode sponsor: Hammerhead Karoo 2 (Use code: TheGravelRide for free HRM) Support the Podcast Join The Ridership  Automated Transcription, please excuse the typos: [00:00:00]Craig Dalton: Hello, and welcome to the gravel ride podcast, where we go deep on the sport of gravel cycling through in-depth interviews with product designers, event organizers and athletes. Who are pioneering the sport I'm your host, Craig Dalton, a lifelong cyclist who discovered gravel cycling back in 2016 and made all the mistakes you don't need to make. I approach each episode as a beginner down, unlock all the knowledge you need to become a great gravel cyclist. [00:00:25]Craig Dalton (Host): This week on the broadcast. I bring you Jonathan Cornell Kennedy from frameworks out of Canada. You might've heard Jonathan briefly on the podcast. When I did one of my made bicycle show recap shows. I was captivated by his designs at the show as they were relatively unique amongst the field of titanium and steel welded bicycles. I'd been familiar with lugged carbon construction from a number of other builders along the years, but I hadn't seen his particular approach. And after following him on Instagram, which I definitely recommend you do, I became a NABARD with the manufacturing process. So I was excited to have him back on board to learn a little bit more about his history. He's a relative newcomer to the world of bicycling, which I think always yields interesting and innovative approaches to things. That's builders who have been around forever. Might not care to revisit as an approach. . So. I'm excited to have this conversation before we jump in. I do need to thank this week sponsor hammer had, and the hammer had Caru to computer. Maybe you've been thinking about updating your gravel cycling GPS computer. This time of year, the hammer head crew two is the most advanced GPS cycling computer available today. With industry leading mapping navigation and routing capabilities that set it apart for other GPS options, it has free global maps with points of interest included like cafes and campsites. So you can explore with confidence and on the go flexibility. One of the things I always talk about when talking about my hammerhead crew too. Is the ongoing software updates that they ship. You never have to feel left behind from a new feature coming out in the world because the team at hammerhead are always looking to improve. The device, the climber feature is one that I always call out as it notably has this predictive path technology. Which lets you visualize for the upcoming gradient changes in real time, whether without a root loaded. That is something that I particularly lean on when I'm doing. An event in terrain that I don't. I have familiarity with, or I'm on some sort of adventure ride for me. I really just love to see what's ahead of me in the climb. So I can just think about my cadence and effort level. Et cetera. The other big update that I saw come through was around this new e-bike integration, which brings detailed battery usage data right onto this. The display. As the new owner of N E MTB, I'm excited to explore this feature. Because I do have a bit of range anxiety. So having those battery details right in the display unit. By which you can access via a specific persona on the head unit. So I can switch between things I need on an e-bike ride versus things I need on a traditional gravel ride. Anyway, I encourage you to give. The Karoo to a look right now, our listeners can get a free heart rate monitor with the purchase of our hammerhead kuru two. Just visit hammerhead.io right now and use the promo code, the gravel ride at checkout today. This is an exclusive offer for my listeners. So don't forget that promo code, the gravel ride. You'll get a free heart rate monitor with your purchase of our crew to just go to hammerhead.io today at both items to your cart and use that promo code, the gravel ride. With that business behind us, let's jump right in to my conversation with Jonathan. Jonathan. Welcome to the show. I'm excited to have this conversation after we originally connected at the maid show in Portland, Oregon. Super cool. I thought your product was one of the more. Interesting products I saw in the entire show. So I'm stoked to give the listeners a little bit more insight as to your background and what frameworks is all about. [00:04:26]Jonathan: Thanks for saying that. That's nice of you. Um, yeah, it's kind of a tired story at this point. Someone with a passion in bikes and who makes things for a living decides to combine those two of their life and see what happens. [00:04:40]Craig Dalton (Host): Jonathan, where'd you grow up and how did you discover cycling in the first place? [00:04:45]Jonathan: so I'm, uh, native Southern Ontarian, uh, up here in Canada. I was born in Toronto and have lived within a few hours of Toronto my entire life. Um, so, started biking, just, you know, when you're, Parents kind of teach you how to ride a two wheeler kind of thing in the school field. Well, I was probably like six or seven at that point, um, and we moved out of the city when I was seven and into a more, well, we were still in a town, but I would say a more suburban kind of town. So biking around the neighborhoods and going to see your friends and stuff, kind of a little bit of escaping mom and dad's supervision. Uh, and then just started kind of. Like, loosely mountain biking. I had like a giant hardtail for my whole, like, biking career from age 12 to when I left for university. Um, so, you know, go on, jump off of stuff, try and jump over logs, whatever, you know, just being a goof with buddies, and then in university, I, um, that was like, what, early 2000s, um, there was kind of like, the original fixie craze, I feel like [00:05:57]Craig Dalton (Host): It comes in waves [00:05:59]Jonathan: but, so I started riding a fixie. Yeah, yeah, yeah. I don't know. It's cyclical, I'm sure. Um, so I started riding a fixie then to get around town, and that was the last bike I purchased before I made one for myself, I studied, uh, a somewhat esoteric field of statistics called, like, uh, financial math. So it was taught in the Department of Statistics and Actuarial Sciences at the university I went to, so that's like the people who do insurance math. Basically figuring out how much your life insurance policy should cost based on, you know, statistics and market values and things like that. So, um, yeah, so I was at school for quite a while. I, seven years, I think. Um, studying that I have a master's degree in it and then ended up doing nothing with that degree, uh, in practical use, like I should have been working as like a finance math kind of guy, you know, so didn't really [00:07:05]Craig Dalton (Host): And then you had mentioned, you know, you had that fixed gear bike that was the only one you had and the next one was one you built yourself. That's for most of us. That's quite a massive leap and journey. What was going on there? I mean, you had, you develop sort of a passion for the sport of cycling. Was it more the idea of frame building and how did you even begin to acquire the skills to manufacture your first bike? [00:07:30]Jonathan: Yeah, so that, that's maybe where the academic journey ends and then what I've done to earn a living, uh, commenced after that. Um, I, my wife and I own and operate a machine shop and, um, what we started the business with was, um, again, another esoteric thing, uh, pattern making is what it's called. And that's the, the trade that is involved with making the tools that foundries [00:07:58]Craig Dalton (Host): And how did, [00:07:59]Jonathan: castings. [00:08:00]Craig Dalton (Host): I'm curious, Jonathan. So how did, I mean, how did you even see that as an opportunity? Did either of you have, you know, ties into the manufacturing world to begin with? [00:08:10]Jonathan: Yeah, absolutely. So my dad is a mechanical engineer by education, and he owns and operates a company that, um, basically repairs, refurbishes, remakes large industrial pumps. Um So they, they oftentimes begin life as a casting, like a large chunk of, uh, iron or steel or bronze, whatever it might be. So when I was done university and kind of doing a little bit of soul searching, a friend of mine who's a few years older and was sort of, um, not thrilled with the job he had, I would say, or maybe that's not the right way to say it, but was looking for a change, um, He is, uh, he's a civil engineer by training and approached my dad cause he knew he was self employed and said, uh, Hey Pat, what do you think of like going out on my own? Got any ideas? I'm pretty handy guy. And my dad said to him, like, Hey, I think you should look into pattern making. The guys are all old. You really can't go to school to learn that stuff. It's all sort of apprenticeship based and they're kind of phasing out their businesses, you know? Um, so there could be an opportunity there. So Stefan, my friend, and I, um, I took like a night class at a local community college to learn how to do 3D modeling and was kind of pretty handy with SolidWorks. And the modern way of making patterns is to use CNC machines to carve 3D shapes, typically out of like blocks of foam or wood or, uh, tooling board, it's called, which is like a hard plastic. And those objects that you create are what the foundry uses to create their sand molds. So picture like a cast iron frying pan. The way that's made is they melt iron in a pot and they pour it into a mold that's made out of sand and the mold has the shape of the iron, uh, the cast iron frying pan inside of it. So my obligation or sort of the service that we offered was not only to produce the tooling, but I was also. You have to design it to work for the foundry. So, uh, cast iron frying pan is a relatively simple object, but we got, over the years, as my skill set grew, got involved with, um, some relatively complicated castings for, like, world leading Aerospace foundries. And, um, so yeah, Stefan and I ran the business together for about a year, year and a bit. He was living in a different, like he lived in Toronto property. We're in Hamilton, which is about an hour outside. And, um, he had, uh, his first kid in that time. And I was like super hungry to get the business going. And so we were kind of on different paces and there's a little bit of friction that resulted because of that. So we parted ways and then. We're still good friends, but, um, I kind of ran the business on my own and then my wife, Elise, came on, um, as we started to grow a bit, move facilities, and then started to expand more out of just pattern making to do, um, machining as well, which is, a lot of times, foundries have these metal castings that they produce that are relatively intricate shapes that need some more precise operations carried out on them. Um, you could, like, an example might be, like, an engine block in a car or turbocharger, like, objects that people, like, think of more readily than some other things I got involved with. So you've got this object that's relatively crude when it comes out of the foundry, and it might need a bearing put in it or threads added so you could bolt it together. So that, that's an operation that typically happens in some sort of machining setup. So we had this customer base of all these foundries that trusted us to make these relatively complicated things like patterns are, are big, like organic shapes, lots of 3D things that need to be accurate and go together and work. Um, so it was a pretty easy thing for us to say to them, Hey, you know, he trusts us to do this. Would you allow us to machine your castings for you? Like, can we quote on that work? And the idea for us there was, um, kind of more repeat business. The thing about, uh, uh, pattern tool, uh, is you only make one of them. Hopefully the customer is not coming back to you for another one right away, because the idea with a mold or a tool or something of that nature is that it costs a lot of money to make, but it allows you to make a ton of parts. Um, so think of that as like a mold for a carbon fiber frame. It's the same kind of idea. You've got this thing that costs a lot of money is really complicated, but it allows you to put, uh, a basic material into it and get [00:12:39]Craig Dalton (Host): And then you're in your example of like the engine block, they would have pulled something out of the mold that was a bit rough around the edges, maybe not as precise as it needed to be to fit. You would bring it back into your CNC capabilities and really use the tool to, to make precise edges and cuts and shapes around the basic block. [00:13:01]Jonathan: exactly. [00:13:01]Craig Dalton (Host): Gotcha. [00:13:03]Jonathan: Yeah. And like a lot of that stuff would have happened more historically in the, the cycling industry when they used a lot of investment castings for lugs and things like that, or, you know, a lot of that type of product has moved away, like, um, in favor of probably more cost competitive and superior products. Uh, but yeah, like, uh, there would have been a whole bunch of examples. I'm sure old shift levers and things like that die castings [00:13:28]Craig Dalton (Host): Yeah, I remember. [00:13:29]Jonathan: um. The, you get a [00:13:31]Craig Dalton (Host): remember in the early days of mountain biking, the wave of CNC machined parts that came out, preferably color anodized that were all the rage at the time. [00:13:41]Jonathan: Yeah. [00:13:42]Craig Dalton (Host): Yeah. [00:13:43]Jonathan: Yeah. So it's, so that's sort of the, the story on, and then we got involved in injection molding and doing, um, work for the government during COVID to make PCR testing consumables, uh, so that involved like some pretty complicated work in terms of reverse engineering, um, yeah, plastic components, getting a clean room set up, [00:14:05]Craig Dalton (Host): And what was that additional equipment that you invested in at the time? [00:14:09]Jonathan: Yeah. So we were, we got a grant from the government to set it up. Uh, so we had to put some capital into it for sure. That's how it worked, but you know, we felt like we're definitely doing the right thing when North America was kind of running out of those parts. The whole world was running out of them because when, when did like they ever see a demand spike like that in terms of lab consumables, right? So, uh, yeah, we got that up and running and then. worked our butts off for two years to make it all happen. And then that's kind of what I would say gave me the financial [00:14:44]Craig Dalton (Host): So that's that brings us to maybe what 2000 2022. [00:14:48]Jonathan: yeah, honestly, man, the whole pandemic is a blur in sort of timelines. Yeah, I think so. That sounds about right. Um, yeah, I would say July of 2022 is when we shipped our last part, um, to fulfill the order to the government. And, um, yeah, [00:15:06]Craig Dalton (Host): And was there a driver behind you saying like, Oh, I want to make a bike? Had you like increased your cycling during the pandemic? Yeah. [00:15:15]Jonathan: So it's another pandemic story of, I'm sure you remember trying to buy bike stuff. Um, so yeah, the, the, all along, I've been, I've always had a passion for making things, right? Like, using my hands to create an object, like I, like, when I was in school, I worked in, like, fine dining restaurants, like, 40 hours a week. That was kind of my first form of, you know, trading my time for money in terms of making things. Uh, so the, the shop that I've built up over the years, I've got some really nice equipment. I've paid for it all out of cash flow by doing other people's work. And I've always wanted a product line of my own stuff. Um, not that I don't like working with other people and you're certainly exposed to a lot of really interesting and challenging problems to solve when other people are bringing you their stuff. But it's a bit of a, like, you know, everybody's got masters, even when I started making my own product, I've got to sell it now. So that's a whole other thing. But, um, yeah, it's a bit of a, always wanted to make something and I've always been into bikes. So that's why I was saying earlier, kind of combine those two things. And the big push was, um, yeah, just not being able to buy a new bike during the pandemic. I was riding [00:16:28]Craig Dalton (Host): and given the equipment that you had in hand at that time, can you describe the bike that you were able to make? [00:16:35]Jonathan: yeah, well, uh, I had originally thought like I'm watching Cobra frameworks as Or yeah, Cobra frame buildings, YouTube channel, how to weld a bike. And I ordered a bunch of chromoly tubing. I've got welding equipment here and milling machines. So I was like, I'm going to just make myself a bike and that's it, right? Like that's going to be, it'll be very, it'll be a piece of junk because I'm not that good at welding and I've never done one before, but the, it'll be the thing that I made and I'm riding it. And that's cool. Um, and then the tube shot sat on the shelf for like two years. Because it's like, it's not, that's not what I do, right? That's not my, it felt like too fussy. I was going to have to be like sitting at a welding table, filing things. So the bike that I decided to make was, um, a format that is gaining popularity right now with the advent of 3d printing, which is a lugged. construction frame where the lugs are alloy and I'm using carbon fiber tubes. So, um, I had actually originally, like I'm really good at 3d modeling. That's one of my main skill sets. So designing the bike took like a day, less than that. And then I was going to have the lugs printed, like 3d printed, like everyone else is doing. It's a pretty, um, in comparison to CNC machine shops that could produce a part like that. In terms of intricacy, it's relatively easy to find vendors that do 3D printing as a job shopping service. Like, that's kind of the main [00:18:03]Craig Dalton (Host): And are those, are those, uh, 3d printing? Are they printing in titanium or aluminum or both? Okay. [00:18:10]Jonathan: both, there's stainless steels, there's all sorts of alloys coming out, there's different forms of printing. And then we, because we do aerospace work, like we had our aerospace designation working with foundries and machine shops that do that type of stuff. Um, we're involved with some of the like, Canadian leaders in terms of operating that equipment and having those processes validated. So I sent them to the engineers and they said you're not actually going to ride that thing. Are you? I was like, what are you talking about? I was like, yeah, I'm going to write it. And like, well, I don't know if we would like, what do you mean? And that's when I started to like do a bit more research into, um, the metallurgy of 3d prints and would have needed to beef them up more than I thought to get it to work. But the main thing that [00:18:56]Craig Dalton (Host): Yeah. Cause I often, when I see companies using the 3d printing, it's often. around the rear dropout. They might highlight that they're doing it back there, but I don't recall of anybody doing a head tube, for example, in the 3D printing style. [00:19:11]Jonathan: most head tubes on bikes that are logged with 3D prints, they actually segment a piece of carbon in there, um, in between, or a piece of titanium pipe and weld it at the two ends, because that particular shape might actually exceed the build volume of some printers. It's not that they, cost wise it doesn't make sense, it's that it, you're literally talking about a little microwave oven. [00:19:33]Craig Dalton (Host): Yeah. [00:19:34]Jonathan: to cram all the lugs into there. Um, and it's the build volume might be like nine, 10 inches cubed. So if you've got a head tube in there, that's, you know, for a taller person, it just won't even fit. So yeah, there was the, the structural element is one thing it can be overcome. The, what floored me was the cost. Um, these guys are like, often engineers are also in gear guys, right? And they're into cars and biking and stuff like that. So a lot of them knew of these brands that are doing it. And they're kind of saying like, uh, I don't know. We can't with our own cost structure on what it costs to operate these machines. And kind of how long it takes to print something. We don't get it. So then I kind of went, okay, you know what? For that amount of money, um, that we're talking just to build myself a bike. I can, I can just take a couple. Blocks of aluminum that I have on the shelf and sacrifice a few days of my life to see if I can machine them Um, so I made myself a fixie that that was the first bike and I just bought Carbon tubes from McMaster car like carbon fiber tube. McMaster car is like, uh, I don't know the Amazon of industrial Ordering so they're they're awesome. They've got everything next day shipping kind of thing. So I got all this stuff and I glued the thing up manually and then I started riding it around, um, around town and going out to group rides, which I hadn't done before. And people started asking questions about it. You know, most bike people are, they pay attention to stuff like that, whether it's a saddle bike they would ever ride themselves. Maybe not the case, but They know, right? And like, everyone's got [00:21:07]Craig Dalton (Host): your bicycles have a very distinct look that is going to get people to ask questions. And for the listener, maybe who hasn't, isn't able to kind of visualize what a lugged construction looks like, you've got the head tube. With a little bit of kind of aluminum coming out for the down tube and the top tube, you've got another lug and bottom bracket set up in a similar fashion. And similarly around the C tube and the rear stay and the carbon fiber tube basically goes inside that aluminum, that lug as we're talking about, and is bonded together in some way to kind of. Create the frame that's somewhat accurate. Jonathan, [00:21:47]Jonathan: I think that's a pretty [00:21:48]Craig Dalton (Host): I've never thought about describing lugs to someone in their ears. Not looking at a picture [00:21:53]Jonathan: Yeah, like, Colagno, Cologno? I don't know how to say the name properly. Like, even their carbon fi Colnago. There you go. They're, they're, uh, Their carbon fiber bikes are logged. So just like there's a step, like most bikes, carbon fiber bikes are made in multiple pieces. They just seen them and sand them and you don't see it because it's under the paint or they might do clear coat [00:22:13]Craig Dalton (Host): Yeah, exactly. [00:22:14]Jonathan: wrap or something. But yeah, anyways, there's a bit of a step and it's, yeah. The, and the, and the first bike, I, it's like bright aluminum. I just left it raw. I didn't put any of the, um, kind of plating that we do on the ones you would have seen. And I use like a more old school looking carbon fiber with like the checkered weave. So it's like quite, um, yeah. And it's built like a steel bike, like skinny tubes, like I think inch and an eighth or inch and a quarter down tube. Like, uh, yeah, so it was, so I started riding it around and people were saying like, Hey, you know, like go look at, then they list brands X, Y, and Z. Go look at those guys and what they're charging for a bike. And I thought like, holy cow, like that's, uh, that's, I could do this again and charge less than that and make a pretty good go of it. Um, so that's when I kind of went like, okay, maybe I should try to spend a bit more time not doing it as a one off, but think about how I would build it with the skill set and resources that I have at my disposal and to kind of rethink the construction methodology a bit. So, as much as my bike is like a object at the end, what I'm, what I really focus on when I'm thinking about the bike is, Everything that goes into making it and optimizing the design so that it can produce the best possible result, uh, in a really predictable manner [00:23:36]Craig Dalton (Host): Yeah. And in riding that first fixed gear bike and using those off the shelf carbon fiber tubes. Did you kind of recognize something in the tubing that left something to be desired? [00:23:47]Jonathan: Um, are you, is this like leading towards why I started making my own tubes? Yeah, um, so yeah, they're, they're roll wrapped, so that's a process where you take sheets of pre pranked cloth and picture like rolling pastry on a rolling pin. You've got a 2D sheet on your table and you roll it over. Um, so you're kind of at the, like, you're constrained to what the fabric itself will allow you to do in terms of laying the fiber in certain orientations and what resin is already in it. Um. So it's, it makes a more limited tube in terms of strength, but honestly, the main motivating factor for me starting to wind the tubes in house was that sourcing stuff in Canada can be problematic for a relatively small economy, you know, and like, there's the border. So every, all these tubes that I had access to were coming out of the States, I'm paying import duties on them. I'm paying in a currency that's worth a lot more than ours. So when I looked at what it was going to cost me to buy a set of tubes from Rockwest, which is what I made the first bunch of bikes with, like I was working with them on the tubing, um, I just thought like, okay, maybe I can, if the whole idea is to try to optimize the process and drive costs down a bit, I thought I got to do this in house, right? Like the, the tubes were costing me a lot more than the aluminum that goes into the bike. And that's like aerospace grade coming from a certified mill with traceability certs. And you know, it's. Good stuff. So, um, then there's the option of like when you're using, or option, that's the wrong word, sorry, there, there's the limitation that when you're buying an off the shelf product, you're constrained to how that is made, right? So the tubes I could have spec'd out to Rockwest, like, Hey, could you make me the tubes with this recipe? And they'd say, yes. But one thing I wanted to maintain, um, as wide open the variable set as possible was like making bikes customizable. Right? So like, say you're talking to a, a frame builder that's using any type of alloy. They're at the mercy of what tubes they can buy. They can't tune beyond that, right? They can maybe squish them a little bit or change the shape of them to get some different bending compliance in them, but the material is what it is. Um, so it, with internalizing the tube manufacturing, I've got a considerable amount of control over making the tubes behave differently. Um, so it looks like a fairly basic bike in profile. It looks kind of as like a classical shape in terms of if you overlaid a welded steel bike over it, they'd almost look the same, right? Like, I use a relatively large down tube, but, um, but I wanted, like, I, I think carbon fiber is an excellent material, but to produce a carbon fiber bike in a traditional sense. Um, you need a mold and then you're not doing custom geometry at that point, right? So I wanted to maintain the ability for every bike to be both custom geometry and have a lot of the benefits of [00:26:42]Craig Dalton (Host): Can you describe what the filament wound carbon fiber, what's that process like? [00:26:47]Jonathan: Yeah, so instead of roll wrapping where you're taking prepreg sheets, um, you have a machine, it's like a CNC machine that I built. Um, that operates like a lathe, so a lathe is where you have a spinning thing on a single axis rotating and something tracing back and forth along it. So, I've got a mandrel that's spinning and I, uh, like a spool of carbon fiber is on this carriage and it goes back and forth and I can basically roll or wind the single strand of carbon fiber onto this tube. So I, I got to do the math again. I did it a few months ago and I forget the number, but I think to make a tube set for a bike, there's like 20, 000 linear feet. that I lay up in a really precise manner. Um, so we build up the tube in layers and we can have different layers for different tubes, different rider thicknesses. And then what the winder allows me to do is put the fiber down in different orientations. So like, I'm not, I don't have to buy prepreg fabric from someone where it's only unidirectional, it's only. 45 or 90. Um, I can go any angle I want and put down as much or as little as I want in certain areas, and that's all done [00:28:00]Craig Dalton (Host): that sort of pastry analysis, uh, comparison you used, is there the equivalent of the rolling pin inside that you remove at the end after it's sort of wound into shape? [00:28:11]Jonathan: yeah. So our, that's where our process is differentiated once again, from people who roll wrap is I don't cure on the mandrel. So most production roll wrapping places or other frame builder, or sorry, um, filament wound tubes, what they do is they have a really precise rod that they wind onto, the mandrel, and then whether it's, you can use, so just to really muddy this a bit more, you can use two forms of fiber to it. You can have prepreg fiber, so it's a single strand with the resin already in it. Or you can do what I'm doing, which is wet winding, where I buy dry spools of fiber, and then I'm mixing my own resin, um, and the fiber gets wetted on the way to the mandrel. Um, both systems require a cure cycle after to set the resin, but with the prepreg toe, you're subjected to the same constraints that prepreg is in terms of, you know, needing to store the stuff in the freezer. It has a shelf life. You've got no say over the resin whatsoever. Um. So for us, I can mix and match the recipe for whatever I want. We use some really high performance resins and that's something that I think, you know, the bike industry doesn't talk a lot about. They talk about the fiber. I've got Toray T1100 in my frame or Ultra High Mod in my frame here, but no one talks about the stuff that actually holds it all together, which is [00:29:28]Craig Dalton (Host): Yeah. I've never heard of it beyond a technical discussion. [00:29:31]Jonathan: so we spent a lot of time [00:29:32]Craig Dalton (Host): Yeah. Yeah. I would say, I would say I would encourage the listener while they're listening to this in their earphones to go onto your Instagram account because a lot of this discussion will become more visual. If you start looking through some of the framework bikes, Instagram stories, you'll get sucked into this process and everything Jonathan's saying will come together visually for you. [00:29:54]Jonathan: I appreciate the plug. So I think the question I'm taking a really long time to answer is like, what happens once the fiber is on the rod? Most places, what they do is to get some amount of consolidation is they wrap tape over it once it's on the mandrel. Kind of like wrapping a hockey stick or a golf club grip or a tennis racket or whatever. So they've got an additional head that has what looks like packing tape and they pull on it kind of hard and then try and wrap, wrap it under tension to consolidate that fiber down onto the mandrel. Then that whole thing goes in an oven. Some guys will vacuum bag it depending on what you're doing. So that means they put a big plastic sleeve over it and pull vacuum on the sleeve. So that'll give you, I think it works out to about 14 PSI of consolidation, um, and then, then they have to remove the rod from the carbon fiber once it's cured, pull it out the end, and you're left with your final carbon fiber tube. So what we do that's a little different is, while the fiber is still wet, like the glue, the epoxy glue hasn't set up yet, mandrel, and then I place it into a mold, like a, The mold that has two hemispheres in it. So I slip a bladder inside of it and then, um, expand the fiber into the mold to give it a really accurate shape and much higher consolidation than you can achieve with, um, traditional [00:31:21]Craig Dalton (Host): Interesting. You mentioned you, um, [00:31:24]Jonathan: So that there's, there's a few motivations for that. One is to get like much higher quality product without, because when you're wet winding, um, air and stuff gets worked in. It's really hard to avoid little micro air bubbles and tiny little air bubbles in carbon fiber is what causes the material to break down over time more rapidly. It's if the, if the plastic starts to fatigue, the fibers get overworked and then the thing kind of breaks down. So the higher quality you can make the product coming out of the mold, the longer it's going to last, the better performance you get out of it. The other thing for us is I wanted really accurate. diameter on the outside of the tube because that's how we glue it into the lugs. Um, so if you can imagine the process that I described where you tape the outside of it, you're left with a fairly coarse outer surface on your filament wound tube. So most people have to sand it quite heavily to get it either dimensionally accurate or, you know, looking good. So that's another step I wanted to avoid. Like my whole thing is about trying to minimize the amount of human [00:32:26]Craig Dalton (Host): Yeah, I think when many of us look around our garages at the carbon fiber frames, uh, clearly like they, they must've been sanded. And then obviously like the paint and everything gets it smoothed over. So you don't see if anybody's seen like a raw construction of a carbon fiber frame, they look a lot rougher around the edges than the finished painted products do. But in your case, there's nowhere to hide. You know, the, the, the product is everything. [00:32:52]Jonathan: You could, like, like you, what you could do to rectify it, and I think some other builders do need to do this, is like, you've got little pinholes everywhere, you've got little wrinkles in the surface, you lay on a clear coat, you mix up your epoxy, or some other finishing agent, you lay it down, and then you sand it. And then you repeat that process three or four times until you've got something that looks really nice, but it's, you can kind of think of it as like the, the mosquito trapped in amber, you know, there's like, your carbon fiber tube is in there, but you have layers of extra resin and clear coat on the outside to make it look pristine, but there's actually a lot of like little plastic and paint on the [00:33:31]Craig Dalton (Host): So we've given the listener a little bit of an understanding of like the process that you go through and all the, your background as a machine shop first, and why you became suited to kind of create these frames with the process you have today, what is a customer engagement look like, how do they work with you? How do you leverage? All of that customization capability you've just described to create a unique ride property for a customer's bike. [00:33:59]Jonathan: That's a question that I don't have a, I don't think I have a satisfying answer to for most people. I'm, I'm coming to this from an extremely technical background where, like, you have to measure and prove everything and, uh, ride feel is totally subjective. You know, there's no, there's no, um, industry standard guidelines for how you test for ride feel. So people will say to me, Oh, I ride your bike. If you could. talk more, or I'd buy a bike from you if you talk more about how it feels and all these things. So my, I would say my thesis on it is that torsional stiffness is really important. So again, coming back, there's so many layers of like, I could go into techie deep dives on everything, but the, the torsional strength you can get from a filament wound product is like exceptionally high. It's how they make, like, really high performing, um, motorsport driveshafts and stuff like that. So, torsion refers to how much twisting the downtube can handle, basically. Um, that's the main structural element there. Uh, so, if you wanted to make an object that had the same strength as our downtube, and sort of, in terms of torsion, they would be really stiff in all your other dimensions, right? It would be an uncomfortable bike to ride. So, I really focus on, um, like, speed and comfort. I would say, uh, you'd think those things might be at odds with one another, but the efficiencies from sort of the bike, not wanting to twist it, like. Yeah, when you pull on the handlebars and push on the bottom bracket, you're trying to torque the down tube, right? So, I can make that strong enough to resist that, that you're not being inefficient during pedaling or riding and you're gonna corner well. But it, it's not unnecessarily stiff in plane, so you don't get like, uh, a chattery feel when you're going over bumps. So, yeah, but I, I don't like, I don't have an answer that I think is satisfying. I, I, I, Honestly, I was researching this last night, going through like academic literature for what places, like, where do you put accelerometers and strain gauges on a bike to try and figure out ride feel? And there's no, there's no answer. And then even if you, even if I come up with a rigorous testing methodology, I say my bike's a seven. Like, what does that mean to you, Craig, when you're going to buy it? Right. So I think within custom frames, the customer is taking a little bit of a risk. Because they can't go to the showroom floor and try my bike, right? And even if they did try my bike, um, that was built for a different rider, there's no guarantee that the one I make is going to be, you know, I'm not a mind reader and a psychic. I don't know how to translate those things. But, um, for people who are very concerned about that, I don't have a satisfying answer. I don't think I can't tell them I can make you exactly what you want. The things we look at are your weight, your riding style. Um, your preferences in terms of stiffness, like just having a sort of verbal conversation about that, and like describe what you're looking for, your power output, like FTP, things like that. Um, yeah, and [00:36:59]Craig Dalton (Host): the challenge with your process that you can make it overly stiff and it's backing it off to the [00:37:06]Jonathan: Uh, no, I don't, I don't think we'd ever be able to, I, I, I maybe could if I redesign things, but no, we're not going to be like, uh, you know, early 2000s, we feel like riding a board. That's like our, our two profiles in a lot of places are slender, our chainstays are small, they're strong, they're very strong. But, um, you know, I think if, if you're someone who comes from riding like pretty hardcore road bikes or like time trial bikes, our bike is not going to feel, um, too stiff to you. There's no, no, I'm making something that I want to ride for a couple hours and have fun on, and we can stiffen things up for sure if that's what you're looking for. But I. You know, like there's the whole conversation of, um, pedaling efficiency, aero gains, all those types of things. Like I'm not making a type of bike that anyone is going to race on, right? Like people who are racing and are concerned about aero gains and drivetrain efficiency and all that stuff are, they're probably on, they want to be on the BMC or the Canyon or the Factor or whatever other guys are racing on. So for me to try to tailor the bike construction methodology to capture that little bit more of the market, Even if I had a product that met their needs, I don't think I'd have a very easy time selling it because it's not got, you know, it's not what other people are racing. So, um, yeah, I've, I've. Tried to make a bike that is really enjoyable for most people. Like even if you are a serious racer, train on one of our bikes, you're going to have a lot [00:38:33]Craig Dalton (Host): Yeah. Yeah. Interesting. So, I mean, just to be clear. So for the would be gravel cyclists looking at one of your gravel frames, what size tire clearance can you get? And do you sort of in your mind say this is sort of a, this is an all around gravel bike. This is going to get it in that sweet spot of you can do almost everything from including racing with it to, you know, your local group ride, gravel rides, et cetera, [00:38:59]Jonathan: Yeah. I think that comes down to what do you define a gravel bike as, right? So we, because everything is custom geometry, I can take it from being basically like a nineties, late eighties mountain bike, um, to. Basically a super fast road bike that you can fit gravel tires on, right? Like it's, I can do the whole spectrum. So I kind of didn't answer this part of the question that you asked about what the customer experience is like. Everything we do is like, I haven't made two bikes that are the same yet. Right. And I'm on a boat. Bike 20 at this point. So we can do all your normal fit stuff. But then again, yeah, the question of tire clearance, drivetrain impingement. Um, I'd say, uh, we would have a tough time stuffing a 50 millimeter tire in with a two by drivetrain with one by no problem. Um, upfront. So we're, uh, classified OEM. I don't know if you're familiar with those. Uh, yeah. The internal shifting hub. So if people like really want huge tire clearance and two by that's like one of the things I can lean on there. Um, but yeah, like I think my, I've made myself, uh, kind of an all road gravel leaning bike and a gravel bike. That's got a really slack head tube and I ride it with 45s on it all the time. Uh, so yeah, we can, we can kind of do whatever you're looking for. I think. Gravel as a segment has a lot more variability than like a road bike, you know, there's fast gravel Um, you know, whatever slack bike packing type gravel. So yeah, we can kind of do Anything really and that that is one of the challenges we have is like, okay I'm telling you about how diverse our system is in terms of its output and we can tune tubes and all this stuff It [00:40:39]Craig Dalton (Host): 100%. Yeah. [00:40:40]Jonathan: For the customer, right? Like they can't, it's, it's, it's too much. So that's why in the new year, I'm working on it right now. We want to offer like pre made geometry essentially at a slightly better price than our customs. We're going to have a couple of geometry tables, um, for, you know, road, all road, gravel, maybe even do two gravels, like the fast gravel and the, but that'll kind of like, which is all road, [00:41:02]Craig Dalton (Host): Yeah. Yeah. Having gone through my own, uh, custom [00:41:05]Jonathan: And just to kind [00:41:07]Craig Dalton (Host): overwhelmed with choice all of a sudden when someone says they can make you anything all of a sudden, it's hard not to become paralyzed. And it took me a while. And fortunately, I'm surrounded by lots of advisors in this front to help that helped me kind of just narrow down the constraints. Of what I wanted and then kind of work with the frame builder to say, yeah, this makes sense. [00:41:28]Jonathan: yeah. So our, like. Easiest customers, fastest, like, time from first interaction to when the bike is built are people who have commissioned lots of custom bikes already, right? They don't, like, they're not doubting their decision. They know what they're looking for. They know they're fit. Um, so they're not belabouring these decisions of like, oh, what's a 0. 2 degree difference on my head tube gonna do, right? Like, they're, it's To them, it's not a big deal. So that's where it's, someone said it to me at, at made actually is like, Oh, what you want is freedom from choice in terms of like having the, the, the product, you know, take this or leave it, you know, that's, if you want to do the full custom thing, we can do that, but maybe it's easier for you to just cross shop geometry tables on like bike insights. And that's what you, how you want to do it. So I need to kind of make that, um, available for people. So yeah, it is, it is totally overwhelming. And I think it's, so there is no customer interaction for me right now that isn't like one click buy on the website, right? Like I'm, there's a bunch of emails back and forth. There's drawing revisions, there's discussions about what you're looking for, what bikes you currently have, um, and what your goals are for the build. So yeah, it's, it, it's involved. And that's part of the reason for shifting to like sort of the tiered model of like prebuilt at one price. And. Full custom at another price because there's a ton of time involved in custom where I can just like Turn on the CNC machine and make make the size 56 all road and you get your thing a couple weeks later You know, there's [00:43:06]Craig Dalton (Host): You had mentioned in this conversation sort of this journey to becoming part of the bike industry. Is, is there anything that stands out that surprised you? About the way people buy bikes or what it's like being a bicycle manufacturer. [00:43:20]Jonathan: no everything. I'm I'm yeah, we talked about this a bit before we started But yeah, like that's the whole side of it. That's It's a total mystery to me, like I'm, I'm a like tech focused, fact based kind of person and to try to navigate, um, the mind of the consumer amidst all the information they're giving, given from general marketing and you know, what, what's important, what's not, it's, and, and convincing someone that what you're doing is worthwhile. Is really challenging. That's, that's going to be the kind of crux of my success or failure. It's not like, I think we make a good product and I can't guarantee you. Sorry. I think my heater just kicked on in the shop. Did that come [00:44:03]Craig Dalton (Host): No worries. [00:44:04]Jonathan: microphone a bit? Okay. Um, so yeah, like that, that, that's going to be the make or break for me. Can I sell enough bikes to keep it, uh, [00:44:14]Craig Dalton (Host): Yeah. Yeah. It's, it, [00:44:16]Jonathan: So [00:44:16]Craig Dalton (Host): so interesting [00:44:17]Jonathan: inside the mind. [00:44:18]Craig Dalton (Host): your business over Instagram because you're, you're so, um, open about sharing your manufacturing process and open to engineering debates and discussions with would be commenters on your Instagram stories that I do think, I mean, from an outsider's perspective, Jonathan, I think you, you showcase the quality of your work in those discussions. And you have always shown up in every story that I've, I've watched in our, our previous conversations, you show up as someone who's very thoughtful about the things you're doing. And obviously there are different ways of doing things, but you are clear about why you are doing things the way you are doing that. [00:45:00]Jonathan: Yeah. So that's always been what's worked for me is sort of the behind the scenes, lay it out for what it is. Um, I think what a lot of people have told me in that sort of marketing branding thing is like, you need to take it a step further. You need to not just show what you're doing, but you need to explain why it's good. And that's where I think I draw a little bit of a personal line because it's like, I'm not, I don't want to take it to, I'm telling you what you should think. I want to leave it at let me show you and you decide for yourself and I don't know if [00:45:29]Craig Dalton (Host): Yeah, I think, I mean, I think the challenge now just my two senses, um, given the small number of frames you have out there in the world is just getting rider feedback, testimonials, reviews, other people riding bikes that are willing to comment on things like ride quality to kind of bring it all together, because as I just said, like, I do think that you've yeah. You've established through your social accounts that trust in your skill as a manufacturer. Now people are just wanting to see what do people say when they've got one of these underneath them? [00:46:02]Jonathan: Yeah I've had people literally DM me and said like there I've got some review bikes out there with Certain reviewers and I've had people say when so and so writes their review as long as it's not bad. I'm buying a bike It's like okay great I think that's good that you need that little like last bit of confirmation that it's not a crapshoot but Like I'm, I'm over here kind of feeling a little vulnerable to be honest, like you put yourself out there. I'm selling bikes. I don't know what expectations I had in terms of how fast sales would take off. I think, like my wife keeps reminding me, like you've been doing this for a year, like maybe you have unreasonable expectations. Just keep your head down and keep like doing good stuff. So yeah, I think you're right. That'll just take a little bit of time, awareness. [00:46:46]Craig Dalton (Host): Yeah. And then [00:46:47]Jonathan: Yeah, all those things of [00:46:49]Craig Dalton (Host): would say, and I maybe I've missed this on your account to the degree in which you are writing your own product and out there. Just sharing a little bit of, of your own commentary again, like everybody's going to take it with a, Hey, this is one rider and, you know, maybe it's a very self interested rider's perspective, but I, you always have struck me as someone who's honest. So I'm not thinking you're going to film a video of yourself riding a gravel trail saying this is the fastest bike ever been produced on earth. [00:47:17]Jonathan: so yeah, I might've given, uh, discredited myself already in this conversation in that regard of, I wrote a fixie for the last 20 years, right? Like what's my frame of reference? I've, I've said this to people and they look at me like, Oh my God, this guy must be a total idiot. Where I say like, I'm not a bike guy. Like, I'm a cyclist. I love riding bikes, but I'm not a guy that's reading the magazines every month, seeing what the latest and greatest is, or knowing what the trends are. Like, I'm kind of outside of all of that. So I think, to your question about what are the biggest kind of shocks is, um, yeah, the whole branding, marketing side of it. I was, I really underestimated that. I thought like a good product, a good, well made product is worthy of, um, you know, at least consideration from a buyer, but there's so much information out there, right? There it's overwhelming and it changes [00:48:06]Craig Dalton (Host): hundred percent. I mean, I think what, [00:48:08]Jonathan: me saying, I'm enjoying riding my bike. It's like, yeah, of course I'm going to say like, [00:48:14]Craig Dalton (Host): oh man, well, I mean, this is great. Jonathan, just one final question on like the customer journey. Like if someone was to come to you with a custom project and assume that they kind of are in the know and got to understand the basics of what they want. Once you kind of locked in design back and forth, how long does it take you to produce a bicycle? And are you typically selling a complete bike or just a frame? [00:48:35]Jonathan: so I'll answer the last part of that question first. We do both. Um, I would say. The farther away the bike's getting shipped, the less likely it is that it's a complete, if that makes any sense. Like I'm in Canada, I'm sourcing components here, so our American customers, it might make more sense for them to work with their local shop. To fill out the build and I just send the frames work and handlebars or whatever they're buying down there. Um, local people have bought full builds. I've sent stuff, yeah, internationally as far as Japan more recently, and those are typically frames. So we do both. We do want to know about component, um, compatibility, even if we're not the ones. We're doing the full build, you know, that's an important part of making sure everything works for the customer when they get it. Um, so the way we work is we take a deposit, uh, 500 right now to reserve a spot in the build queue and to kind of do that back and start the discussion on what you're looking for. That deposit's non refundable, but it gets applied to the balance of whatever the build cost comes out to at the end. Um, and from the approval, like some people approve same day. They know exactly what they want. Might go to production later that day or the next morning. Uh, it's, I would say it's typically about a month right now from start to finish to build the bike. Like, it's, there's, it's not a lot of my time, but there's a bunch of steps where you wait in between. The main one being that I send the lugs out for plating for, uh, corrosion resistance and Uh, and that, you know, if I finish them on a Monday, I ship them out a Tuesday or Wednesday, I get them back a week and a half later, uh, in that time I can have made the tubes. So, yeah, it's our lead time right now is about two months. I think we've got some backlog, a small backlog of orders to work through, some review bikes going out and. Yeah, so it's, we're pretty quick, I think, like our, the theoretical throughput on what I can do in a year, uh, on our current equipment is [00:50:41]Craig Dalton (Host): Okay. [00:50:42]Jonathan: 200 bikes. So I don't expect to be selling that many. If I was, [00:50:47]Craig Dalton (Host): Well, we'll get you there in time. Jonathan. I'm good. I'm excited to see this journey ahead of you. [00:50:53]Jonathan: Thanks. [00:50:54]Craig Dalton (Host): Yeah. Cool. Well, I'll put links to everything in the show notes. So people know how to find you again for the listener. Definitely follow the frameworks framework bikes, Instagram account, which I'll link to as well. You can get all the behind the scenes. You're going to want a friend of mine who tipped me off to your brand when we were at Manufacturer's porn, which I think is appropriate. [00:51:15]Jonathan: No, Yeah, the website, uh, it's there. It needs some work. Like I said, we're working on the kind of program for 2024 in terms of the stock sizes. Throwing some more information up there. It's just really it's a placeholder website right now. So definitely needs [00:51:31]Craig Dalton (Host): Right on. Thanks for all the time, Jonathan. [00:51:34]Jonathan: Thank you [00:51:34]Craig Dalton (Host): that's going to do it for this week's edition of the gravel ride podcast. Big, thanks to Jonathan from frameworks for coming on board. And telling us all about his journey and manufacturing process for those beautiful bikes. Additional thanks. Goes out to our friends at hammerhead. For sponsoring the show many times this year, truly appreciate their support as I couldn't do what I do without some of their underwriting. If you were able to support the show, a couple of things you can do for me, ratings and reviews are hugely appreciated. They really help. With discoverability. Or if you're able to financially contribute to the show, simply visit buy me a coffee.com/the gravel ride. Until next time here's to finding some dirt onto your wheels.     

Welcome to episode 224 of The CloudPod Podcast - where the forecast is always cloudy! This week, your hosts Justin, Jonathan, and Ryan discuss some major changes at Terraform, including switching from open source to a BSL License. Additionally, we cover updates to Amazon S3, goodies from Storage Day, and Google Gemini vs. Open AI.  Titles we almost went with this week: None! This week's title was ✨chef's kiss✨ A big thanks to this week's sponsor: Foghorn Consulting provides top-notch cloud and DevOps engineers to the world's most innovative companies. Initiatives stalled because you have trouble hiring?  Foghorn can be burning down your DevOps and Cloud backlogs as soon as next week.

Welcome to the newest episode of The Cloud Pod podcast! Justin, Ryan, Jonathan, Matthew are your hosts this week as we discuss all things cloud and AI, as well as Amazon Detective, SageMaker, AWS Documentation, and Google Workstation.  Titles we almost went with (and there's a lot this week)

We are excited to be the first podcast in the world to release an in-depth interview on the new SOTA in commercially licensed open source models - MosiacML MPT-7B!The Latent Space crew will be at the NYC Lux AI Summit next week, and have two meetups in June. As usual, all events are on the Community page! We are also inviting beta testers for the upcoming AI for Engineers course. See you soon!One of GPT3's biggest limitations is context length - you can only send it up to 4000 tokens (3k words, 6 pages) before it throws a hard error, requiring you to bring in LangChain and other retrieval techniques to process long documents and prompts. But MosaicML recently open sourced MPT-7B, the newest addition to their Foundation Series, with context length going up to 84,000 tokens (63k words, 126 pages):This transformer model, trained from scratch on 1 trillion tokens of text and code (compared to 300B for Pythia and OpenLLaMA, and 800B for StableLM), matches the quality of LLaMA-7B. It was trained on the MosaicML platform in 9.5 days on 440 GPUs with no human intervention, costing approximately $200,000. Unlike many open models, MPT-7B is licensed for commercial use and it's optimized for fast training and inference through FlashAttention and FasterTransformer.They also released 3 finetuned models starting from the base MPT-7B: * MPT-7B-Instruct: finetuned on dolly_hhrlhf, a dataset built on top of dolly-5k (see our Dolly episode for more details). * MPT-7B-Chat: finetuned on the ShareGPT-Vicuna, HC3, Alpaca, Helpful and Harmless, and Evol-Instruct datasets.* MPT-7B-StoryWriter-65k+: it was finetuned with a context length of 65k tokens on a filtered fiction subset of the books3 dataset. While 65k is the advertised size, the team has gotten up to 84k tokens in response when running on a single node A100-80GB GPUs. ALiBi is the dark magic that makes this possible. Turns out The Great Gatsby is only about 68k tokens, so the team used the model to create new epilogues for it!On top of the model checkpoints, the team also open-sourced the entire codebase for pretraining, finetuning, and evaluating MPT via their new MosaicML LLM Foundry. The table we showed above was created using LLM Foundry in-context-learning eval framework itself!In this episode, we chatted with the leads of MPT-7B at Mosaic: Jonathan Frankle, Chief Scientist, and Abhinav Venigalla, Research Scientist who spearheaded the MPT-7B training run. We talked about some of the innovations they've brought into the training process to remove the need for 2am on-call PagerDutys, why the LLM dataset mix is such an important yet dark art, and why some of the traditional multiple-choice benchmarks might not be very helpful for the type of technology we are building.Show Notes* Introducing MPT-7B* Cerebras* Lottery Ticket Hypothesis* Hazy Research* ALiBi* Flash Attention* FasterTransformer* List of naughty words for C4 https://twitter.com/code_star/status/1661386844250963972* What is Sparsity?* Hungry Hungry Hippos* BF16 FPp.s. yes, MPT-7B really is codenamed LLongboi!Timestamps* Introductions [00:00:00]* Intro to Mosaic [00:03:20]* Training and Creating the Models [00:05:45]* Data Choices and the Importance of Repetition [00:08:45]* The Central Question: What Mix of Data Sets Should You Use? [00:10:00]* Evaluation Challenges of LLMs [0:13:00]* Flash Attention [00:16:00]* Fine-tuning for Creativity [00:19:50]* Open Source Licenses and Ethical Considerations [00:23:00]* Training Stability Enhancement [00:25:15]* Data Readiness & Training Preparation [00:30:00]* Dynamic Real-time Model Evaluation [00:34:00]* Open Science for Affordable AI Research [00:36:00]* The Open Approach [00:40:15]* The Future of Mosaic [00:44:11]* Speed and Efficiency [00:48:01]* Trends and Transformers [00:54:00]* Lightning Round and Closing [1:00:55]TranscriptAlessio: [00:00:00] Hey everyone. Welcome to the Latent Space podcast. This is Alessio partner and CTO-in-Residence at Decibel Partners. I'm joined by my co-host, Swyx, writer and editor of Latent Space.Swyx: Hey, and today we have Jonathan and Abhi from Mosaic ML. Welcome to our studio.Jonathan: Guys thank you so much for having us. Thanks so much.Swyx: How's it feel?Jonathan: Honestly, I've been doing a lot of podcasts during the pandemic, and it has not been the same.Swyx: No, not the same actually. So you have on your bio that you're primarily based in Boston,Jonathan: New York. New York, yeah. My Twitter bio was a probability distribution over locations.Swyx: Exactly, exactly. So I DMd you because I was obviously very interested in MPT-7B and DMd you, I was like, for the 0.2% of the time that you're in San Francisco, can you come please come to a podcast studio and you're like, I'm there next week.Jonathan: Yeah, it worked out perfectly. Swyx: We're really lucky to have you, I'll read off a few intros that people should know about you and then you can fill in the blanks.So Jonathan, you did your BS and MS at Princeton in programming languages and then found your way into ML for your PhD at MiT where you made a real splash with the lottery ticket hypothesis in 2018, which people can check up on. I think you've done a few podcasts about it over the years, which has been highly influential, and we'll talk about sparse models at Mosaic. You have also had some side [00:01:30] quest. You taught programming for lawyers and you did some law and privacy stuff in, in DC and also did some cryptography stuff. Um, and you've been an assistant professor at Harvard before earning your PhD.Jonathan:  I've yet to start.Swyx: You, you yet to start. Okay. But you just got your PhD.Jonathan:. I technically just got my PhD. I was at Mosaic which delayed my defense by about two years. It was, I was at 99% done for two years. Got the job at Harvard, Mosaic started, and I had better things to do than write my dissertation for two years. Swyx: You know, you know, this is very out of order.Jonathan: Like, oh, completely out of order, completely backwards. Go talk to my advisor about that. He's also an advisor at Mosaic and has been from the beginning. And, you know, go talk to him about finishing on time.Swyx: Great, great, great. And just to fill it out, Abhi, you did your BS and MS and MIT, you were a researcher at Cerebras, and you're now a research scientist at Mosaic. Just before we go into Mosaic stuff, I'm actually very curious about Cereus and, uh, just that, that space in general. Um, what are they doing that people should know about?Abhinav: Yeah, absolutely. Um, I think the biggest thing about CEREUS is that they're really building, you know, kind of the NextGen computing platform beyond, like GPUs.Um, they're trying to build a system that uses an entire wafer, you know, rather than cutting up a wafer into smaller chips and trying to train a model on that entire system, or actually more recently on many such wafers. Um, so it's, and it's really extraordinary. I think it's like the first time ever that kind of wafer scale computing has ever really worked. And so it's a really exciting time to be there, trying to figure out how we can map ML workloads to work, um, on a much, much bigger chip.Swyx: And do you use like [00:03:00] a different programming language or framework to do that? Or is that like..Abhinav: Yeah, so I mean, things have changed a bit since I was there.I think, um, you can actually run just normal tensor flow and pie torch on there. Um, so they've built a kind of software stack that compiles it down. So it actually just kind of works naturally. But yeah.Jonathan : Compiled versions of Python is a hot topic at the moment with Mojo as well. Swyx: And then Mosaic, you, you spearheaded the MPT-7B effort.INTRO TO MOSAIC [00:03:20]Abhinav: Uh, yeah. Yeah, so it's kind of like, it's been maybe six months, 12 months in the making. We kind of started working on LMs sort of back in the summer of last year. Um, and then we came with this blog post where we kind of profiled a lot of LMs and saw, hey, the cost of training is actually a lot lower than what people might think.Um, and then since then, you know, being inspired by kind of, you know, meta's release, so the LLaMA models and lots of other open source work, we kind of started working towards, well, what if we were to release a really good kind of 7 billion parameter model? And that's what MPT is. Alessio:You know, we mentioned some of the podcasts you had done, Jonathan, I think in one of them you mentioned Mosaic was not planning on building a  model and releasing and obviously you eventually did. So what are some of the things that got you there that maybe obviously LLaMA you mentioned was an inspiration. You now have both the training and like inference products that you offer. Was this more of a research challenge in a way, uh, that you wanted to do?Or how did the idea come to be?Jonathan: I think there were a couple of things. So we still don't have a first class model. We're not an open AI where, you know, our businesses come to use our one great model. Our business is built around customers creating their own models. But at the end of the day, if customers are gonna create their own models, we have to have the tools to help them do that, and to have the tools to help them do that and know that they work we have to create our own models to start. We have to know that we can do something great if customers are gonna do something great. And one too many people may have challenged me on Twitter about the fact that, you know, mosaic claims all these amazing numbers, but, you know, I believe not to, you know, call out Ross Whiteman here, but, you know, I believe he said at some point, you know, show us the pudding.Um, and so Ross, you know, please let me know how the pudding tastes. But in all seriousness, like I think there is something, this is a demo in some sense. This is to say we did this in 9.5 days for a really reasonable cost, straight through 200, an intervention. 200 K. Yep. Um, you can do this too.Swyx: Uh, and just to reference the numbers that you're putting out, this is the, the last year you were making a lot of noise for trading GPT 3 under 450 K, which is your, your initial estimate.Um, and then it went down to a 100 K and stable diffusion 160 k going down to less than 50 K as well.Jonathan: So I will be careful about that 100 K number. That's certainly the challenge I've given Abhi to hit. Oh, I wouldn't make the promise that we've hit yet, but you know, it's certainly a target that we have.And I, you know, Abhi may kill me for saying this. I don't think it's crazy. TRAINING AND CREATING THE MODELS [00:05:45] Swyx: So we definitely want to get into like estimation math, right? Like what, what needs to happen for those big order magnitude changes to in, in infrastructure costs. But, uh, let's kind of stick to the MPT-7B story. Yeah. Tell us everything.Like you have, uh, three different models. One of them. State of the art essentially on context length. Let's talk about the process of training them, the, uh, the decisions that you made. Um, I can go into, you know, individual details, but I just wanna let you let you rip.Abhinav: Yeah, so I mean, I think, uh, we started off with the base model, which is kind of for all practical purposes, a recreation of LLaMA 7B.Um, so it's a 7 billion perimeter model trained on the trillion tokens. Um, and our goal was like, you know, we should do it efficiently. We should be able to do it like, kind of hands free so we don't have to babysit the runs as they're doing them. And it could be kind of a, a launching point for these fine tune models and those fine tune models, you know, on, on the one hand they're kind of really fun for the community, like the story writer model, which has like a 65,000 length context window and you can even kind of extrapolate beyond that. Um, but they're, they're also kind of just tr inspirations really. So you could kind of start with an MPT-7B base and then build your own custom, you know, downstream. If you want a long context code model, you could do that with our platform. If you wanted one that was for a particular language, you could do that too.But yeah, so we picked kind of the three variance chat and instruct and story writer just kind of like inspirations looking at what people were doing in the community today. Yeah. Alessio: And what's the beginning of the math to come up with? You know, how many tokens you wanna turn it on? How many parameters do you want in a bottle? 7 billion and 30 billion seem to be kind of like two of the magic numbers going around right now. Abhinav: Yeah, definitely. Definitely. Yeah, I think like there's sort of these scaling laws which kind of tell you how to best spend your training compute if that's all you cared about. So if you wanna spend $200,000 exactly in the most efficient way, there'd be a recipe for doing that.Um, and that we usually go by the Chinchilla laws. Now for these models, we actually didn't quite do that because we wanted to make sure that people could actually run these at home and that they [00:07:30] were good for inference. So we trained them kind of beyond those chinchilla points so that we're almost over-training them.I think there's like a joke going on online that they're like long boy and that that came up internally because we were training them for really, really long durations. So that 7B model, the chinchilla point might be 140 billion tokens. Instead, we trained a trillion, so almost seven times longer than you normally would.Swyx: So longboi was the code name. So is it, is it the trading method? Is it the scaling law that you're trying to coin or is it the code name for the 64 billion?Jonathan: Uh, 64. It was just an internal joke for the, for training on way more tokens than you would via chinchilla. Okay. Um, we can coin it long boy and it, it really stuck, but just to, you know, long boys filled with two ELs at the beginning.Yeah. Cause you know, we wanted the lLLaMA thing in there as well. Jonathan: Yeah, yeah, yeah. Our darn CEO we have to rein him in that guy, you know, you can't, yeah. I'm gonna take away his Twitter password at some point. Um, but you know, he had to let that one out publicly. And then I believe there was a YouTube video where someone happened to see it mentioned before the model came out and called it the Long G boy or something like that.Like, so you know, now it's out there in the world. It's out there. It's like Sydnee can't put it back inSwyx: There's a beautiful picture which I think Naveen tweeted out, which, um, shows a long boy on a whiteboard.Jonathan: That was the origin of Long Boy. In fact, the legs of the lLLaMA were the two Ls and the long boy.DATA CHOICES AND THE IMPORTANCE OF REPETITION [00:08:45]Swyx: Well, talk to me about your data choices, right? Like this is your passion project. Like what can you tell us about it?Jonathan: Yeah, I think Abhi wanted to kill me by the end for trying to use all the GPUs on data and none of them on actually training the model. Um, at the end of the day, We know that you need to train these models and [00:09:00] lots of data, but there are a bunch of things we don't know.Number one is what kinds of different data sources matter. The other is how much does repetition really matter? And really kind of repetition can be broken down into how much does quality versus quantity matter. Suppose I had the world's best 10 billion tokens of data. Would it be better to train on that a hundred times or better to train on a trillion tokens of low quality, fresh data?And obviously there's, there's a middle point in between. That's probably the sweet spot. But how do you even know what good quality data is? And. So, yeah, this is, nobody knows, and I think the more time I spent, we have a whole data team, so me and several other people, the more time that we spent on this, you know, I came away thinking, gosh, we know nothing.Gosh, if I were back in academia right now, I would definitely go and, you know, write a paper about this because I have no idea what's going on.Swyx: You would write a paper about it. I'm interested in such a paper. I haven't come across any that exists. Could you frame the central question of such a paper?THE CENTRAL QUESTION: WHAT MIX OF DATA SETS SHOULD YOU USE? [00:10:00]Jonathan: Yeah. The central question is what mix of data sets should you use? Okay. Actually I've, you know, you had mentioned my law school stuff. I went back to Georgetown Law where I used to teach, um, in the midst of creating this model, and I actually sat down with a class of law students and asked them, I gave them our exact data sets, our data mixes, um, like how many tokens we had, and I said, Create the best data set for your model.Knowing they knew nothing about large language models, they just know that data goes in and it's going to affect the behavior. Um, and I was like, create a mix and they basically covered all the different trade-offs. Um, you probably want a lot of English language [00:10:30] text to start with. You get that from the web, but do you want it to be multilingual?If so, you're gonna have a lot less English text. Maybe it'll be worse. Do you wanna have code in there? There are all these beliefs that code leads to models being better at logical reasoning, of which I've seen zero evidence. Rep. It's not, um, I mean, really made a great code model, but code models leading to better chain of thought reasoning on the part of language or code being in the training set leading to better chain of thought reasoning.People claim this all the time, but I've still never seen any real evidence beyond that. You know, one of the generations of the GPT three model started supposedly from Code Da Vinci. Yes. And so there's a belief that, you know, maybe that helped. But again, no evidence. You know, there's a belief that spending a lot of time on good sources like Wikipedia is good for the model.Again, no evidence. At the end of the day, we tried a bunch of different data mixes and the answer was that there are some that are better or worse than others. We did find that the pile, for example, was a really solid data mix, but you know, there were stronger data mixes by our evaluation metrics. And I'll get back to the evaluation question in a minute cuz that's a really important one.This data set called c4, which is what the original T five model was trained on, is weirdly good. And everybody, when I posted on this on Twitter, like Stella Beaterman from Luther mentioned this, I think someone else mentioned this as well. C4 does really well in the metrics and we have no idea why we de-duplicated it against our evaluation set.So it's not like it memorized the data, it is just one web scrape from 2019. If you actually look at the T five paper and see how it was pre-processed, it looks very silly. Mm-hmm. They removed anything that had the word JavaScript in it because they didn't want to get like no JavaScript [00:12:00] warnings. They removed anything with curly braces cuz they didn't wanna get JavaScript in it.They looked at this list of bad words, um, and removed anything that had those bad words. If you actually look at the list of bad words, words like gay are on that list. And so there's, you know, it is a very problematic, you know, list of words, but that was the cleaning that leads to a data set that seems to be unbeatable.So that to me says that we know nothing about data. We, in fact used a data set called mc four as well, which is they supposedly did the same pre-processing of C4 just on more web calls. The English portion is much worse than C4 for reasons that completely escape us. So in the midst of all that, Basically I set two criteria.One was I wanted to be at least as good as mc four English, like make sure that we're not making things actively worse. And mc four English is a nice step up over other stuff that's out there. And two was to go all in on diversity after that, making sure that we had some code, we had some scientific papers, we had Wikipedia, because people are gonna use this model for all sorts of different purposes.But I think the most important thing, and I'm guessing abhi had a million opinions on this, is you're only as good as your evaluation. And we don't know how to evaluate models for the kind of generation we ask them to do. So past a certain point, you have to kinda shrug and say, well, my evaluation's not even measuring what I care about.Mm-hmm. So let me just make reasonable choices. EVALUATION CHALLENGES OF LLMs [0:13:00]Swyx: So you're saying MMLU, big bench, that kind of stuff is not. Convincing for youJonathan: A lot of this stuff is you've got two kinds of tasks. Some of these are more of multiple choice style tasks where there is a right answer. Um, either you ask the model to spit out A, B, C, or D or you know, and if you're more [00:13:30] sophisticated, you look at the perplexity of each possible answer and pick the one that the model is most likely to generate.But we don't ask these models to do multiple choice questions. We ask them to do open-ended generation. There are also open-ended generation tasks like summarization. You compare using things like a blue score or a rouge score, which are known to be very bad ways of comparing text. At the end of the day, there are a lot of great summaries of a paper.There are a lot of great ways to do open form generation, and so humans are, to some extent, the gold standard. Humans are very expensive. It turns out we can't put them into our eval pipeline and just have the humans look at our model every, you know, 10 minutes? Not yet. Not yet. Maybe soon. Um, are you volunteering Abhi?Abhinav: I, I, I just know we have a great eval team who's, uh, who's helping us build new metrics. So if they're listening,Jonathan:  But it's, you know, evaluation of large language models is incredibly hard and I don't think any of these metrics really truly capture. What we expect from the models in practice.Swyx: Yeah. And we might draw wrong conclusions.There's been a debate recently about the emergence phenomenon, whether or not it's a mirage, right? I don't know if you guys have opinions about that process. Abhinav: Yeah, I think I've seen like this paper and all and all, even just kind of plots from different people where like, well maybe it's just a artifact of power, like log scaling or metrics or, you know, we're meshing accuracy, which is this a very like harsh zero one thing.Yeah. Rather than kind of something more continuous. But yeah, similar to what Jonathan was saying about evals. Like there there's one issue of like you just like our diversity of eval metrics, like when we put these models up, even like the chat ones, the instruct ones, people are using 'em for such a variety of tasks.There's just almost no way we get ahead of time, like measuring individual dimensions. And then also particularly like, you know, at the 7B scale, [00:15:00] um, these models still are not super great yet at the really hard tasks, like some of the hardest tasks in MMLU and stuff. So sometimes they're barely scoring like the above kind of random chance, you know, like on really, really hard tasks.So potentially as we. You know, aim for higher and higher quality models. Some of these things will be more useful to us. But we kind of had to develop MPT 7B kind of flying a little bit blind on, on what we knew it was coming out and just going off of like, you know, a small set of common sensor reasoning tasks.And of course, you know, just comparing, you know, those metrics versus other open source models. Alessio: I think fast training in inference was like one of the goals, right? So there's always the trade off between doing the hardest thing and like. Doing all the other things quickly.Abhinav: Yeah, absolutely. Yeah, I mean, I think like, you know, even at the 7B scale, you know, uh, people are trying to run these things on CPUs at home.You know, people are trying to port these to their phones, basically prioritizing the fact that the small scale would lead to our adoption. That was like a big, um, big thing going on. Alessio: Yeah. and you mentioned, um, flash attention and faster transformer as like two of the core things. Can you maybe explain some of the benefits and maybe why other models don't use it?FLASH ATTENTION [00:16:00]Abhinav: Yeah, absolutely. So flash attention is this basically faster implementation of full attention. Um, it's like a mathematical equivalent developed by like actually some of our collaborators, uh, at Stanford. Uh, the hazy research. Hazy research, yeah, exactly.Jonathan: What is, what, what, what's the name hazy research mean?Abhinav: I actually have no idea.Swyx: I have no clue. All these labs have fun names. I always like the stories behind them.Abhinav: Yeah, absolutely. We really, really liked flash attention. We, I think, had to integrate into repo even as [00:16:30] as early as September of last year. And it really just helps, you know, with training speed and also inference speed and we kind of bake that into model architecture.And this is kind of unique amongst all the other hugging face models you see out there. So ours actually, you can toggle between normal torch attention, which will work anywhere and flash attention, which will work on GPUs right out of the box. And that way I think you get almost like a 2x speed up at training time and somewhere between like 50% to a hundred percent speed up at inference time as well.So again, this is just like, we really, really wanted people to use these and like, feel like an improvement and we, we have the team to, to help deliver that. Swyx: Another part, um, of your choices was alibi position, encodings, which people are very interested in, maybe a lot of people just, uh, to sort of take in, in coatings as, as a given.But there's actually a lot of active research and honestly, it's a lot of, um, it's very opaque as well. Like people don't know how to evaluate encodings, including position encodings, but may, may, could you explain, um, alibi and, um, your choice?Abhinav: Yeah, for sure. The alibi and uh, kind of flash attention thing all kind of goes together in interesting ways.And even with training stability too. What alibi does really is that it eliminates the need to have positional embeddings in your model. Where previously, if you're a token position one, you have a particular embedding that you add, and you can't really go beyond your max position, which usually is like about 2000.With alibies, they get rid of that. Instead, just add a bias to the attention map itself. That's kind of like this slope. And if at inference time you wanna go much, much larger, they just kind of stretch that slope out to a longer, longer number of positions. And because the slope is kind of continuous and you can interpret it, it all works out now.Now one of [00:18:00] the, the funny things we found is like with flash attention, it saved so much memory and like improved performance so much that even as early as I kind of last year, like we were profiling models with, with very long context lines up to like, you know, the 65 k that you seen in release, we just never really got around to using it cuz we didn't really know what we might use it for.And also it's very hard to train stably. So we started experimenting with alibi integration, then we suddenly found that, oh wow, stability improves dramatically and now we can actually work together with alibi in a long context lens. That's how we got to like our story writer model where we can stably train these models out to very, very long context lenses and, and use them performantly.Jonathan: Yeah.Swyx: And it's also why you don't have a firm number. Most people now have a firm number on the context line. Now you're just like, eh, 65 to 85Abhinav: Oh yeah, there's, there's a, there's a big age to be 64 K or 65 k. 65 k plus.Swyx: Just do powers of twos. So 64 isn't, you know. Jonathan: Right, right. Yeah. Yeah. But we could, I mean, technically the context length is infinite.If you give me enough memory, um, you know, we can just keep going forever. We had a debate over what number to say is the longest that we could handle. We picked 84 cakes. It's the longest I expect people to see easily in practice. But, you know, we played around for even longer than that and I don't see why we couldn't go longer.Swyx: Yeah. Um, and so for those who haven't read the blog posts, you put the Great Gatsby in there and, uh, asked it to write an epilogue, which seemed pretty impressive.Jonathan: Yeah. There are a bunch of epilogues floating around internally at Mosaic. Yeah. That wasn't my favorite. I think we all have our own favorites.Yeah. But there are a bunch of really, really good ones. There was one where, you know, it's Gatsby's funeral and then Nick starts talking to Gatsby's Ghost, and Gatsby's father shows up and, you know, then he's [00:19:30] at the police station with Tom. It was very plot heavy, like this is what comes next. And a bunch of that were just very Fitzgerald-esque, like, you know, beautiful writing.Um, but it was cool to just see that Wow, the model seemed to actually be working with. You know, all this input. Yeah, yeah. Like it's, it's exciting. You can think of a lot of things you could do with that kind of context length.FINE-TUNING FOR CREATIVITY [00:19:50]Swyx: Is there a trick to fine tuning for a creative task rather than, um, factual task?Jonathan: I don't know what that is, but probably, yeah, I think, you know, the person, um, Alex who did this, he did fine tune the model explicitly on books. The goal was to try to get a model that was really a story writer. But, you know, beyond that, I'm not entirely sure. Actually, it's a great question. Well, no, I'll ask you back.How would you measure that? Swyx: Uh, God, human feedback is the solve to all things. Um, I think there is a labeling question, right? Uh, in computer vision, we had a really, really good episode with Robo Flow on the segment. Anything model where you, you actually start human feedback on like very, I think it's something like 0.5% of the, the overall, uh, final, uh, uh, labels that you had.But then you sort augment them and then you, you fully automate them, um, which I think could be applied to text. It seems intuitive and probably people like snorkel have already raised ahead on this stuff, but I just haven't seen this applied in the language domain yet.Jonathan: It, I mean there are a lot of things that seem like they make a lot of sense in machine learning that never work and a lot of things that make zero sense that seem to work.So, you know, I've given up trying to even predict. Yeah, yeah. Until I see the data or try it, I just kind shg my shoulders and you know, you hope for the best. Bring data or else, right? Yeah, [00:21:00] exactly. Yeah, yeah, yeah.Alessio: The fine tuning of books. Books three is like one of the big data sets and there was the whole.Twitter thing about trade comments and like, you know, you know, I used to be a community moderator@agenius.com and we've run into a lot of things is, well, if you're explaining lyrics, do you have the right to redistribute the lyrics? I know you ended up changing the license on the model from a commercial use Permitted.Swyx: Yeah let's let them. I'm not sure they did. Jonathan: So we flipped it for about a couple hours. Swyx: Um, okay. Can we, can we introduce the story from the start Just for people who are under the loop. Jonathan: Yeah. So I can tell the story very simply. So, you know, the book three data set does contain a lot of books. And it is, you know, as I discovered, um, it is a data set that provokes very strong feelings from a lot of folks.Um, that was one, one guy from one person in particular, in fact. Um, and that's about it. But it turns out one person who wants a lot of attention can, you know, get enough attention that we're talking about it now. And so we had a, we had a discussion internally after that conversation and we talked about flipping the license and, you know, very late at night I thought, you know, maybe it's a good thing to do.And decided, you know, actually probably better to just, you know, Stan Pat's license is still Apache too. And one of the conversations we had was kind of, we hadn't thought about this cuz we had our heads down, but the Hollywood writer Strike took place basically the moment we released the model. Mm-hmm.Um, we were releasing a model that could do AI generated creative content. And that is one of the big sticking points during the strike. Oh, the optics are not good. So the optics aren't good and that's not what we want to convey. This is really, this is a demo of the ability to do really long sequence lengths and.Boy, you know, [00:22:30] that's, that's not timing that we appreciated. And so we talked a lot internally that night about like, oh, we've had time to read the news. We've had time to take a breath. We don't really love this. Came to the conclusion that it's better to just leave it as it is now and learn the lesson for the future.But certainly that was one of my takeaways is this stuff, you know, there's a societal context around this that it's easy to forget when you're in the trenches just trying to get the model to train. And you know, in hindsight, you know, I might've gone with a different thing than a story writer. I might've gone with, you know, coder because we seem to have no problem putting programmers out of work with these models.Swyx: Oh yeah. Please, please, you know, take away this stuff from me.OPEN SOURCE LICENSES AND ETHICAL CONSIDERATIONS [00:23:00]Jonathan: Right. You know, so it's, I think, you know, really. The copyright concerns I leave to the lawyers. Um, that's really, if I learned one thing teaching at a law school, it was that I'm not a lawyer and all this stuff is a little complicated, especially open source licenses were not designed for this kind of world.They were designed for a world of forcing people to be more open, not forcing people to be more closed. And I think, you know, that was part of the impetus here, was to try to use licenses to make things more closed. Um, which is, I think, against the grain of the open source ethos. So that struck me as a little bit strange, but I think the most important part is, you know, we wanna be thoughtful and we wanna do the right thing.And in that case, you know, I hope with all that interesting licensing fund you saw, we're trying to be really thoughtful about this and it's hard. I learned a lot from that experience. Swyx: There's also, I think, an open question of fair use, right? Is training on words of fair use because you don't have a monopoly on words, but some certain arrangements of words you do.And who is to say how much is memorization by a model versus actually learning and internalizing and then. Sometimes happening to land at the right, the [00:24:00] same result.Jonathan: And if I've learned one lesson, I'm not gonna be the person to answer that question. Right, exactly. And so my position is, you know, we will try to make this stuff open and available.Yeah. And, you know, let the community make decisions about what they are or aren't comfortable using. Um, and at the end of the day, you know, it still strikes me as a little bit weird that someone is trying to use these open source licenses to, you know, to close the ecosystem and not to make things more open.That's very much against the ethos of why these licenses were created.Swyx: So the official mosaic position, I guess is like, before you use TC MPC 7B for anything commercial, check your own lawyers now trust our lawyers, not mosaic's lawyers.Jonathan: Yeah, okay. Yeah. I'm, you know, our lawyers are not your lawyers.Exactly. And, you know, make the best decision for yourself. We've tried to be respectful of the content creators and, you know, at the end of the day, This is complicated. And this is something that is a new law. It's a new law. It's a new law that hasn't been established yet. Um, but it's a place where we're gonna continue to try to do the right thing.Um, and it's, I think, one of the commenters, you know, I really appreciated this said, you know, well, they're trying to do the right thing, but nobody knows what the right thing is to even do, you know, the, I guess the, the most right thing would've been to literally not release a model at all. But I don't think that would've been the best thing for the community either.Swyx: Cool.Well, thanks. Well handled. Uh, we had to cover it, just causeJonathan:  Oh, yes, no worries. A big piece of news. It's been on my mind a lot.TRAINING STABILITY ENHANCEMENT [00:25:15]Swyx: Yeah. Yeah. Well, you've been very thoughtful about it. Okay. So a lot of these other ideas in terms of architecture, flash, attention, alibi, and the other data sets were contributions from the rest of the let's just call it open community of, of machine learning advancements. Uh, but Mosaic in [00:25:30] particular had some stability improvements to mitigate loss spikes, quote unquote, uh, which, uh, I, I took to mean, uh, your existing set of tools, uh, maybe we just co kind of covered that. I don't wanna sort of put words in your mouth, but when you say things like, uh, please enjoy my empty logbook.How much of an oversell is that? How much, you know, how much is that marketing versus how much is that reality?Abhinav: Oh yeah. That, that one's real. Yeah. It's like fully end-to-end. Um, and I think.Swyx: So maybe like what, what specific features of Mosaic malibu?Abhinav: Totally, totally. Yeah. I think I'll break it into two parts.One is like training stability, right? Knowing that your model's gonna basically get to the end of the training without loss spikes. Um, and I think, you know, at the 7B scale, you know, for some models like it ha it's not that big of a deal. As you train for longer and longer durations, we found that it's trickier and trickier to avoid these lost spikes.And so we actually spent a long time figuring out, you know, what can we do about our initialization, about our optimizers, about the architecture that basically prevents these lost spikes. And you know, even in our training run, if you zoom in, you'll see small intermittent spikes, but they recover within a few hundred steps.And so that's kind of the magical bit. Our line is one of defenses we recover from Las Vegas, like just naturally, right? Mm-hmm. Our line two defense was that we used determinism and basically really smart resumption strategies so that if something catastrophic happened, we can resume very quickly, like a few batches before.And apply some of these like, uh, interventions. So we had these kinds of preparations, like a plan B, but we didn't have to use them at all for MPT 7B training. So, that was kind of like a lucky break. And the third part of like basically getting all the way to the empty law book is having the right training infrastructure.[00:27:00]So this is basically what, like is, one of the big selling points of the platform is that when you try to train these models on hundreds of GPUs, not many people outside, you know, like deep industry research owners, but the GPUs fail like a lot. Um, I would say like almost once every thousand a 100 days.So for us on like a big 512 cluster every two days, basically the run will fail. Um, and this is either due to GPUs, like falling off the bus, like that's, that's a real error we see, or kind of networking failures or something like that. And so in those situations, what people have normally done is they'll have an on-call team that's just sitting round the clock, 24-7 on slack, once something goes wrong.And if then they'll basically like to try to inspect the cluster, take nodes out that are broken, restart it, and it's a huge pain. Like we ourselves did this for a few months. And as a result of that, because we're building such a platform, we basically step by step automated every single one of those processes.So now when a run fails, we have this automatic kind of watch talk that's watching. It'll basically stop the job. Test the nodes cord in anyone's that are broken and relaunch it. And because our software's all deterministic has fast resumption stuff, it just continues on gracefully. So within that log you can see sometimes I think maybe at like 2:00 AM or something, the run failed and within a few minutes it's back up and running and all of us are just sleeping peacefully.Jonathan: I do wanna say that was hard one. Mm-hmm. Um, certainly this is not how things were going, you know, many months ago, hardware failures we had on calls who were, you know, getting up at two in the morning to, you know, figure out which node had died for what reason, restart the job, have to cord the node. [00:28:30] Um, we were seeing catastrophic loss spikes really frequently, even at the 7B scale that we're just completely derailing runs.And so this was step by step just ratcheting our way there. As Abhi said, to the point where, Many models are training at the moment and I'm sitting here in the studio and not worrying one bit about whether the runs are gonna continue. Yeah. Swyx: I'm, I'm not so much of a data center hardware kind of guy, but isn't there existing software to do this for CPUs and like, what's different about this domain? Does this question make sense at all?Jonathan: Yeah, so when I think about, like, I think back to all the Google fault tolerance papers I read, you know, as an undergrad or grad student mm-hmm. About, you know, building distributed systems. A lot of it is that, you know, Each CPU is doing, say, an individual unit of work.You've got a database that's distributed across your cluster. You wanna make sure that one CPU failing can't, or one machine failing can't, you know, delete data. So you, you replicate it. You know, you have protocols like Paxos where you're literally, you've got state machines that are replicated with, you know, with leaders and backups and things like that.And in this case, you were performing one giant computation where you cannot afford to lose any node. If you lose a node, you lose model state. If you lose a node, you can't continue. It may be that, that in the future we actually, you know, create new versions of a lot of our distributed training libraries that do have backups and where data is replicated so that if you lose a node, you can detect what node you've lost and just continue training without having to stop the run, you know?Pull from a checkpoint. Yeah. Restart again on different hardware. But for now, we're certainly in a world where if anything dies, that's the end of the run and you have to go back and recover from it. [00:30:00]DATA READINESS & TRAINING PREPARATION [00:30:00]Abhinav: Yeah. Like I think a big part, a big word there is like synchronous data pluralism, right? So like, we're basically saying that on every step, every GP is gonna do some work.They're gonna stay in sync with each other and average their, their gradients and continue. Now that there are algorithmic techniques to get around this, like you could say, oh, if a GP dies, just forget about it. All the data that's gonna see, we'll just forget about it. We're not gonna train on it.But, we don't like to do that currently because, um, it makes us give up determinism, stuff like that. Maybe in the future, as you go to extreme scales, we'll start looking at some of those methods. But at the current time it's like, we want determinism. We wanted to have a run that we could perfectly replicate if we needed to.And it was, the goal is figure out how to run it on a big cluster without humans having to babysit it. Babysit it. Alessio: So as you mentioned, these models are kind of the starting point for a lot of your customers To start, you have a. Inference product. You have a training product. You previously had a composer product that is now kind of not rolled into, but you have like a super set of it, which is like the LLM foundry.How are you seeing that change, you know, like from the usual LOP stack and like how people train things before versus now they're starting from, you know, one of these MPT models and coming from there. Like worship teams think about as they come to you and start their journey.Jonathan: So I think there's a key distinction to make here, which is, you know, when you say starting from MPT models, you can mean two things.One is actually starting from one of our checkpoints, which I think very few of our customers are actually going to do, and one is starting from our configuration. You can look at our friends at Rep for that, where, you know, MPT was in progress when Refl [00:31:30] came to us and said, Hey, we need a 3 billion parameter model by next week on all of our data.We're like, well, here you go. This is what we're doing, and if it's good enough for us, um, hopefully it's good enough for you. And that's basically the message we wanna send to our customers. MPT is basically clearing a path all the way through where they know that they can come bring their data, they can use our training infrastructure, they can use all of our amazing orchestration and other tools that abhi just mentioned, for fault tolerance.They can use Composer, which is, you know, still at the heart of our stack. And then the l l M Foundry is really the specific model configuration. They can come in and they know that thing is gonna train well because we've already done it multiple times. Swyx: Let's dig in a little bit more on what should people have ready before they come talk to you? So data architecture, eval that they're looking, etc.Abhinav: Yeah, I, I mean, I think we'll accept customers at any kind of stage in their pipeline. You know, like I'd say science, there's archetypes of people who have built products around like some of these API companies and reach a stage or maturity level where it's like we want our own custom models now, either for the purpose of reducing cost, right?Like our inference services. Quite a bit cheaper than using APIs or because they want some kind of customization that you can't really get from the other API providers. I'd say the most important things to have before training a big model. You know, you wanna have good eval metrics, you know, some kind of score that you can track as you're training your models and scaling up, they can tell you you're progressing.And it's really funny, like a lot of times customers will be really excited about training the models, right? It's really fun to like launch shelves on hundreds of gfs, just all around. It's super fun. But then they'll be like, but wait, what are we gonna measure? Not just the training loss, right? I mean, it's gotta be more than that.[00:33:00]So eval metrics is like a, it's a good pre-req also, you know, your data, you know, either coming with your own pre-training or fine-tune data and having like a strategy to clean it or we can help clean it too. I think we're, we're building a lot of tooling around that. And I think once you have those two kinds of inputs and sort of the budget that you want, we can pretty much walk you through the rest of it, right?Like that's kind of what we do. Recently we helped build CR FM's model for biomedical language a while back. Jonathan: Um, we can. That's the center of research for foundation models. Abhi: Exactly, exactly.Jonathan: Spelling it out for people. Of course.Abhinav: No, absolutely. Yeah, yeah. No, you've done more of these than I have.Um, I think, uh, basically it's sort of, we can help you figure out what model I should train to scale up so that when I go for my big run company, your here run, it's, uh, it's predictable. You can feel confident that it's gonna work, and you'll kind of know what quality you're gonna get out before you have to spend like a few hundred thousand dollars.DYNAMIC REAL-TIME MODEL EVALUATION [00:34:00]Alessio: The rap Reza from rap was on the podcast last week and, uh, they had human eval and then that, uh, I'm Jon Eval, which is like vibe based. Jonathan: And I, I do think the vibe based eval cannot be, you know, underrated really at the, I mean, at the end of the day we, we did stop our models and do vibe checks and we did, as we monitor our models, one of our evals was we just had a bunch of prompts and we would watch the answers as the model trained and see if they changed cuz honestly, You know, I don't really believe in any of these eval metrics to capture what we care about.Mm-hmm. But when you ask it, uh, you know, I don't know. I think one of our prompts was to suggest games for a three-year-old and a seven-year-old. That would be fun to play. Like that was a lot more [00:34:30] valuable to me personally, to see how that answer evolved and changed over the course of training. So, you know, and human eval, just to clarify for folks, human human eval is an automated evaluation metric.There's no humans in it at all. There's no humans in it at all. It's really badly named. I got so confused the first time that someone brought that to me and I was like, no, we're not bringing humans in. It's like, no, it's, it's automated. They just called it a bad name and there's only a hundred cents on it or something.Abhinav: Yeah. Yeah. And, and it's for code specifically, right?Jonathan: Yeah. Yeah. It's very weird. It's a, it's a weird, confusing name that I hate, but you know, when other metrics are called hella swag, like, you know, you do it, just gotta roll with it at this point. Swyx: You're doing live evals now. So one, one of the tweets that I saw from you was that it is, uh, important that you do it paralyzed.Uh, maybe you kind of wanna explain, uh, what, what you guys did.Abhinav: Yeah, for sure. So with LLM Foundry, there's many pieces to it. There's obviously the core training piece, but there's also, you know, tools for evaluation of models. And we've kind of had one of the, I think it's like the, the fastest like evaluation framework.Um, basically it's multi GPU compatible. It runs with Composer, it can support really, really big models. So basically our framework runs so fast that even Azure models are training. We can run these metrics live during the training. So like if you have a dashboard like weights and biases, you kind of watch all these evil metrics.We have, like, 15 or 20 of them honestly, that we track during the run and add negligible overhead. So we can actually watch as our models go and feel confident. Like, it's not like we wait until the very last day to, to test if the models good or notJonathan: That's amazing. Yeah. I love that we've gotten this far into the conversation.We still haven't talked about efficiency and speed. Those are usually our two watch words at Mosaic, which is, you know, that's great. That says that we're [00:36:00] doing a lot of other cool stuff, but at the end of the day, um, you know, Cost comes first. If you can't afford it, it doesn't matter. And so, you know, getting things down cheap enough that, you know, we can monitor in real time, getting things down cheap enough that we can even do it in the first place.That's the basis for everything we do.OPEN SCIENCE FOR AFFORDABLE AI RESEARCH [00:36:00]Alessio: Do you think a lot of the questions that we have around, you know, what data sets we should use and things like that are just because training was so expensive before that, we just haven't run enough experiments to figure that out. And is that one of your goals is trying to make it cheaper so that we can actually get the answers?Jonathan: Yeah, that's a big part of my personal conviction for being here. I think I'm, I'm still in my heart, the second year grad student who was jealous of all his friends who had GPUs and he didn't, and I couldn't train any models except in my laptop. And that, I mean, the lottery ticket experiments began on my laptop that I had to beg for one K 80 so that I could run amist.And I'm still that person deep down in my heart. And I'm a believer that, you know, if we wanna do science and really understand these systems and understand how to make them work well, understand how they behave, understand what makes them safe and reliable. We need to make it cheap enough that we can actually do science, and science involves running dozens of experiments.When I finally, you know, cleaned out my g c s bucket from my PhD, I deleted a million model checkpoints. I'm not kidding. There were over a million model checkpoints. That is the kind of science we need, you know, that's just what it takes. In the same way that if you're in a biology lab, you don't just grow one cell and say like, eh, the drug seems to work on that cell.Like, there's a lot more science you have to do before you really know.Abhinav: Yeah. And I think one of the special things about Mosaic's kind of [00:37:30] position as well is that we have such, so many customers all trying to train models that basically we have the incentive to like to devote all these resources and time to do this science.Because when we learn which pieces actually work, which ones don't, we get to help many, many people, right? And so that kind of aggregation process I think is really important for us. I remember way back there was a paper about Google that basically would investigate batch sizes or something like that.And it was this paper that must have cost a few million dollars during all the experience. And it was just like, wow, what a, what a benefit to the whole community. Now, like now we all get to learn from that and we get, we get to save. We don't have to spend those millions of dollars anymore. So I think, um, kind of mosaical science, like the insights we get on, on data, on pre-screening architecture, on all these different things, um, that's why customers come to us.Swyx: Yeah, you guys did some really good stuff on PubMed, G B T as well. That's the first time I heard of you. Of you. And that's also published to the community.Abhinav: Yeah, that one was really fun. We were like, well, no one's really trained, like fully from scratch domain specific models before. Like, what if we just did a biomed one?Would it still work? And, uh, yeah, I'd be really excited. That did, um, we'll probably have some follow up soon, I think, later this summer.Jonathan: Yeah. Yes. Stay tuned on that. Um, but I, I will say just in general, it's a really important value for us to be open in some sense. We have no incentive not to be open. You know, we make our money off of helping people train better.There's no cost to us in sharing what we learn with the community. Cuz really at the end of the day, we make our money off of those custom models and great infrastructure and, and putting all the pieces together. That's honestly where the Mosaic name came from. Not off of like, oh, we've got, you know, this one cool secret trick [00:39:00] that we won't tell you, or, you know, closing up.I sometimes, you know, in the past couple weeks I've talked to my friends at places like Brain or, you know, what used to be Brain Now Google DeepMind. Oh, I R I P Brain. Yeah. R i p Brian. I spent a lot of time there and it was really a formative time for me. Um, so I miss it, but. You know, I kind of feel like we're one of the biggest open research labs left in industry, which is a very sad state of affairs because we're not very big.Um, but at least can you say how big the team is actually? Yeah. We were about 15 researchers, so we're, we're tiny compared to, you know, the huge army of researchers I remember at Brain or at fair, at Deep Mind back, you know, when I was there during their heydays. Um, you know, but everybody else is kind of, you know, closed up and isn't saying very much anymore.Yeah. And we're gonna keep talking and we're gonna keep sharing and, you know, we will try to be that vanguard to the best of our ability. We're very small and I, I can't promise we're gonna do what those labs used to do in terms of scale or quantity of research, but we will share what we learn and we will try to create resources for the community.Um, I, I dunno, I just, I believe in openness fundamentally. I'm an academic at heart and it's sad to me to watch that go away from a lot of the big labs. THE OPEN APPROACH [00:40:15]Alessio: We just had a live pod about the, you know, open AI snow mode, uh, post that came out and it was one of the first time I really dove into Laura and some of the this new technologies, like how are you thinking about what it's gonna take for like the open approach to really work?Obviously today, GPT four is still, you know, part of like that state-of-the-art model for a [00:40:30] lot of tasks. Do you think some of the innovation and kind of returning methods that we have today are enough if enough people like you guys are like running these, these research groups that are open? Or do you think we still need a step function improvement there?Jonathan: I think one important point here is the idea of coexistence. I think when you look at, I don't know who won Linux or Windows, the answer is yes. Microsoft bought GitHub and has a Windows subsystem for Linux. Linux runs a huge number of our servers and Microsoft is still a wildly profitable company.Probably the most successful tech company right now. So who won open source or closed source? Yes. Um, and I think that's a similar world that we're gonna be in here where, you know, it's gonna be different things for different purposes. I would not run Linux on my laptop personally cuz I like connecting to wifi and printing things.But I wouldn't run Windows on one of my surfers. And so I do think what we're seeing with a lot of our customers is, do they choose opening IR mosaic? Yes. There's a purpose for each of these. You have to send your data off to somebody else with open eyes models. That's a risk. GPT four is amazing and I would never promise someone that if they come to Mosaic, they're gonna get a GPT four quality model.That's way beyond our means and not what we're trying to do anyway. But there's also a whole world for, you know, domain specific models, context specific models that are really specialized, proprietary, trained on your own data that can do things that you could never do with one of these big models. You can customize in crazy ways like G B T four is not gonna hit 65 K context length for a very long time, cuz they've already trained that [00:42:00] model and you know, they haven't even released the 32 K version yet.So we can, you know, we can do things differently, you know, by being flexible. So I think the answer to all this is yes. But we can't see the open source ecosystem disappear. And that's the scariest thing for me. I hear a lot of talk in academia about, you know, whatever happened to that academic research on this field called information retrieval?Well, in 1999 it disappeared. Why? Because Google came along and who cares about information retrieval research when you know you have a Google Scale, you know, Web Scale database. So you know, there's a balance here. We need to have both. Swyx: I wanna applaud you, Elaine. We'll maybe edit it a little like crowd applause, uh, line.Cuz I, I think that, um, that is something that as a research community, as people interested in progress, we need to see these things instead of just, uh, seeing marketing papers from the advertising GPT 4.Jonathan: Yeah. I, I think I, you know, to get on my soapbox for 10 more seconds. Go ahead. When I talk to policymakers about, you know, the AI ecosystem, the usual fear that I bring up is, Innovation will slow because of lack of openness.I've been complaining about this for years and it's finally happened. Hmm. Why is Google sharing, you know, these papers? Why is Open AI sharing these papers? There are a lot of reasons. You know, I have my own beliefs, but it's not something we should take for granted that everybody's sharing the work that they do and it turns out well, I think we took it for granted for a while and now it's gone.I think it's gonna slow down the pace of progress. In a lot of cases, each of these labs has a bit of a monoculture and being able to pass ideas [00:43:30] back and forth was a lot of what kept, you know, scientific progress moving. So it's imperative not just, you know, for the open source community and for academia, but for the progress of technology.That we have a vibrant open source research community.THE FUTURE OF MOSAIC [00:44:11]Swyx: There's a preview of the ecosystem and commentary that we're, we're gonna do. But I wanna close out some stuff on Mosaic. You launched a bunch of stuff this month. A lot of stuff, uh, actually was, I was listening to you on Gradient descent, uh, and other podcasts we know and love.Uh, and you said you also said you were not gonna do inference and, and, and last week you were like, here's Mosaic ML inference. Oops. So maybe just a, at a high level, what was Mosaic ml and like, what is it growing into? Like how do you conceptualize this? Jonathan: Yeah, and I will say gradient, when graded dissent was recorded, we weren't doing inference and had no plans to do it.It took a little while for the podcast to get out. Um, in the meantime, basically, you know, one thing I've learned at a startup, and I'm sure abhi can comment on this as well, focus is the most important thing. We have done our best work when we've been focused on doing one thing really well and our worst work when we've tried to do lots of things.Yeah. So, We don't want to do inference, we don't want to have had to do inference. Um, and at the end of the day, our customers were begging us to do it because they wanted a good way to serve the models and they liked our ecosystem. And so in some sense, we got dragged into it kicking and screaming. We're very excited to have a product.We're going to put our best foot forward and make something really truly amazing. But there is, you know, that's something that we were reluctant to do. You know, our customers convinced us it would be good for our business. It's been wonderful for business and we are gonna put everything into this, but you know, back when grading dissent came out, I [00:45:00] was thinking like, or when we recorded it or focused, oh God, like focus is the most important thing.I've learned that the hard way multiple times that Mosaic, abhi can tell you like, you know, I've made a lot of mistakes on not focusing enough. Um, boy inference, that's a whole second thing, and a whole different animal from training. And at the end of the day, when we founded the company, our belief was that inference was relatively well served at that time.There were a lot of great inference companies out there. Um, training was not well served, especially efficient training. And we had something to add there. I think we've discovered that as the nature of the models have changed, the nature of what we had to add to inference changed a lot and there became an opportunity for us to contribute something.But that was not the plan. But now we do wanna be the place that people come when they wanna train these big, complex, difficult models and know that it's gonna go right the first time and they're gonna have something they can servee right away. Um, you know, really the rep example of, you know, with 10 days to go saying, Hey, can you please train that model?And, you know, three or four days later the model was trained and we were just having fun doing interesting, fine tuning work in it for the rest of the 10 days, you know. That also requires good inference. Swyx: That's true, that's true. Like, so running evals and, and fine tuning. I'm just putting my business hat on and you know, and Alessio as well, like, uh, I've actually had fights with potential co-founders about this on the primary business.Almost like being training, right? Like essentially a one-time cost.Jonathan: Who told you it was a one time cost? What, who, who told you that?Swyx: No, no, no, no. Correct me. Jonathan: Yeah. Yeah. Let me correct you in two ways. Um, as our CEO Navine would say, if he were here, when you create version 1.0 of your software, do you then fire all the engineers?Of [00:46:30] course not. You never, like, MPT has a thousand different things we wanted to do that we never got to. So, you know, there will be future models.Abhinav: And, and the data that's been trained on is also changing over time too, right? If you wanna ask anything about, I guess like May of 2023, we'll have to retrain it further and so on.Right? And I think this is especially true for customers who run like the kind of things that need to be up to date on world knowledge. So I, I think like, you know, the other thing I would say too is that, The malls we have today are certainly not the best malls we'll ever produce. Right. They're gonna get smaller, they're gonna get faster, they're gonna get cheaper, they're gonna get lower latency, they're gonna get higher quality.Right? And so you always want the next gen version of MPT and the one after that and one after that. There's a reason that even the GPT series goes three, four, and we know there's gonna be a five. Right? Um, so I I I also don't see as a, as a one-time cost.Jonathan: Yeah. Yeah. And I, if you wanna cite a stat on this, there are very, very

Join the discussion on Facebook!TranscriptJonathan:Hey guys. This is the third episode in the series. If you've not listened to the first two episodes, make sure you go back in time to check those out first. It should be in the title of the episode which part in the series it is, so make sure you go back and check those out so that you have a full understanding of what it is we're talking about today. I just want to jump in here real quick and let you know that. We'll see you next time.Jonathan:Welcome to the Tooth and Coin Podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific, but we hope that these episodes help you along with your journey. Now, a very important piece for you to understand is that this is not paid financial advice, this is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. We've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today. To continue the discussion, agree with us, don't agree with us, have a story to tell, have something to share, join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin Podcast, click on it to join it and be able to join us there. Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion to be able to help you a little bit more than what the content is doing.Jonathan:So if you'd like access to that, whenever it becomes ready, all you have to do is text the word tooth and coin, T-O-O-T-H-A-N-D-C-O-I-N, to 33444. Again, that's tooth and coin, all one word, no spaces, to 33444. Reply with your email address and we'll email you instructions on how to get into a Facebook group, as well as add you to lists to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you, as well. On to today's episode. I hope you enjoy it.Jonathan:So we give that number to our clients every month. Here's what your breakeven point is so that they can have the context of, Well, I want to make $30,000, my break even point is $45,000. I've got to be producing $75,000, right now my average is $55,000. I got a lot of work to do. They know they got to influence it. They're not going to be surprised when they don't have $30,000 at the end of the month. They're going to know what that is. So, what about you in terms of breakeven point, things like that, what are some of the things that you like to use a breakeven point in order to be able to use in terms of management and goal setting and things that.Joseph:So I think it's probably important that we talk about the things that go into that break even point. It is a few additions to the calculator and a subtraction. When we look at a break even point, what was all of the costs involved from your P and L for the month? What was your total cost to operate? Then we're going to add back those owner's discretionary expenses, like the owner's wages. We're going to add that back. We're going to add back depreciation and amortization because those are paper entries that go on. And then we're also going to subtract out and say how much were your principal payments on your debt to get to your break even point. Those breakeven points, I find that to be most useful in determining how much cash you need to keep in practice.Jonathan:Mm-hmm (affirmative).Joseph:If I'm looking at a client that has a breakeven point of a $100,000 and they have $700,000 in their business checking account, I'd say you've probably got a little bit too much cash in your practice, it's not working for you. What you do with that cash, there's a lot of things, call your financial advisor and talk to them about that. But, if we've got a client that has a $100,000 breakeven point and their cash in the bank is $50,000, it's Look, we probably should slow down this owner's withdrawals. We probably should slow down all these different things. We need to get the cash to a point where you can sleep well at night, that you've got the liquidity to be able to operate.Joseph:And when we look at that ratio, your breakeven point to the cash in the bank, again, it's very similar to what we were talking about with the balance sheet and looking at their current assets divided by current liabilities. It's not the same exact number, but it's the same concept, how many weeks worth of cash that you have to operate. So if the spicket of income gets turned off today, how long can you operate? Can you operate for a month?Jonathan:Mm-hmm (affirmative).Jonathan:Can you operate for a week? Can you operate for six months, eight months, 10 months, 12 months? So those are the things that I like to talk to practice owners about. And we get the question all the time, how much cash do we keep in the practice checking account? And a lot of that has to do with the comfort level of the practice owner.Jonathan:There are some practice owners that want to empty the checking account out every month and take all that money home. There's some practice owners that say, Hey, I really want to make sure that I keep a $100,000 or $150,000 or $50,000. That number is different, that level of cash and comfort is different for everybody. The thing that I like about the breakeven point is it takes the emotion out of it and it just says, Here's how much it costs to operate your practice, period.Jonathan:Mm-hmm (affirmative).Joseph:Now we can figure out what you want to keep cash wise on hand with that.Jonathan:Completely agree. Honestly, I think that's probably one of the biggest comfort levels you can get as a business owner is to reach that cash goal. Because once you've hit that point, at that point, you can just optimize because and really work towards those goals. I really like using the breakeven point as a goal standard, too. Let's say that I have a personal income goal of $40,000 a month. We'll our average breakeven point is $50,000 a month. Again, we give our break even point to our clients each month. We also give a rolling quarterly average as well as we give a year to date average so that people can understand really kind of how's that breakeven point trending, where's my average, like what is the number that it looks like, so you can have a bit of normalization to that number as well.Jonathan:You have a little bit of a, of a plus or minus on there. Let's say a $50,000 breakeven point's the number that you've been averaging, a fairly consistent number, because obviously things go come up and down. Things will happen that create one time expenses. But, knowing that breakeven point by heart, knowing it's $50,000, if I want to make $40,000, then I know I got to be at $90,000 a month in collections. I know that has to happen. And if I know that we're going to be open 18 days out of the month, the quick math is `that's $5,000 a day.Jonathan:Let's see, $9,000 divided 18, $5,000 a day, yes. My almost a minor in math still works. So, $5,000 a day is what you got to get to in order to be able to hit $9,000 in collections. And all of a sudden, a number quantitative number that we can use in terms of the inside of the practice to quantify what it is we need to be bringing in. And we were to be able to set some type of a standard. If I know right now we're averaging $4,200 a day, I know that number has to change. I have to get an extra a hundred dollars a day in there. If I have that $5,000 a day number in my head, what I would tell people to do is break it into two segments. Break that into hygiene and break the into doctor production collection.Jonathan:Hygiene is usually a little bit easier for people to calculate on because it seems to be pretty standard. Over time, there's a normalization of hygiene revenue it seems like because there's just not a whole lot of extra services that get added into hygiene. You have a prophy and you have x-rays and you have, fluoride, maybe you have some perio treatment or something like that, if your practice is doing that. And, but overall, that revenue is fairly consistent from a hygiene perspective. So, let's say that you got two people there everyday doing hygiene, and you know that your hygiene's going to be somewhere around $1,800 a day in collections coming from your hygiene department. Every practice is going to be a little bit different, but what they do or don't do it in this terms of those numbers.Jonathan:So that gives you $1,800 a day, $900 a hygienist, goal. And it gives you a $3,200 doctor production in a day. And so that allows you to then say, Okay, if my goal is $3,200 in a day, what does that look like in terms of what I am commonly doing in terms of production? Is that two crowns a day, plus some exams and plus other things? What is that number, to you, as a dentist, as a practice? And there's that one new ortho case a day? What is that number? And that gives you a lot of power to set some type of a goal. And once you have those goals set, you can then bring your team in. And again, this is the reason to circle back to the part about having good staff is you want to have a team to be able to help you reach those different production roles.Jonathan:And that's where you start the training, you can start working on those different things. And I think it's a good starting point for allowing you to be able to come up with what you need to do in terms of what the production does. And again, that's just one use of the breakeven point. If I was a business owner, I would always know my breakeven point. Well, I say that, I am a business owner, I do know my breakeven point.Jonathan:But, for all my clients, I urge you to understand your breakeven point because there's a lot of power in that number from in a bunch of different aspects. I wish the breakeven point was just a standard financial statement number. But even though it's really important, to me, it's probably the most powerful number that you get from your financial statements, just not on your financial statement. It's not there. You have to calculate, you have to know what you're looking for in order to be able to look for it. So, to me, the breakeven points of like a magic number almost that everyone should know. So, that's the breaking point. Is there anything else on the P and L that you want to talk about because that went pretty in-depth on the P and L.Joseph:I like to look for trends, I like to see if things look out of whack, I like to look at measures of our percentages over time. I think that those are going to help tell the story as your practice grows or as your practice shrinks. It may be one of those things that you grew too fast, you have too much stuff going on, too much expenses, you hired a couple of associates and you're Man, I need to go back to just being a single practice owner. Those percentages will help you understand kind of what the story is and evens things out over time. So, those are the big things that I'm looking at, for sure.Jonathan:Yeah, same here. So let's move on to the last one. And Joseph and I talked about this financial statement before the call, and I said, You'd probably be surprised by my answer or this one. The last one was the statement of cash flow. And in terms of the statement of cashflow, what is it that you're looking for when you're analyzing the statement of cashflow?Joseph:So, the beginning number of the statement of cash flows is what was your cash in the bank, minus your credit cards, at the beginning of the month. The bottom number on the cash flows is what is that number at the end of the month? The statement of cash flows tells you how you got from your beginning balance to your ending balance. So, there are a couple of different things that go into how we got from A to B. The simplest, easiest way, and I'm not going to use the accounting technical term is number one is what was the profit? What was the net profit of business? And then we're going to add back non-cash expenses, depreciation, amortization, add those things back. And then we're going to subtract out, did we buy any assets this month, cash assets?Joseph:And then we're going to also subtract out and we're going to say, How much did we pay in principal payments our debt? So,, how do we get in cash in the bank from X to Y? So when I'm looking at the statement of cash flows...Also, how much did we take out owner's distributions? That's another pretty key component. When I'm looking at the statement of cash flows, first thing I'm looking for is Did the cash go up or down over the period? And then the next question is Why? As I'm looking at that, and then I also look at that ending cash balance and I'm looking at that breakeven point and seeing whether or not we're in good shape or not. If the ending cash balance is still seven times your breakeven point, it doesn't matter that cash went down $10,000, $5,000, whatever it is.Joseph:That's not a statement of alarm. I also am looking at the cashflow statement because we have a lot of owners that are saying, Hey, look, I'm not paying myself a salary. I'm a schedule C filer. How much can I afford to pay myself? And that's one of the first places that I go and kind of direct them at is to say, Well, let's look at your cashflow statement. Let's see how much cash was produced in the practice last month versus how much came out, let's look at that. I like to look at whether the cash increased or decreased and why and then I try to figure out how much was taken out in owner's distributions and was it enough or too much or that kind of thing in order to figure out where the cash balance is compared to the breakeven point.Joseph:So, those are some of the things that I'm looking for. If cash went down by $10,000, but that's because we paid off our line of credit, that's not a bad thing. If cash went up a $100,000 and it's because we took out a 50% interest, hard lender that's a bad thing. So, how did we get from cash in the bank at the beginning to the end and what makes up all of those different pieces? Obviously, loans are a big part of practice ownership, but if you're taking out a loan in that kind of a way where you're just desperate for cash and you've got to take it out at a really, really high interest rate, that's not something to celebrate because your cash went up because you took out a cash advance on your credit card.Joseph:That's not a good thing. So, cash at the beginning, cash at the end. And then how do we get there? What are those kind of bigger key components? Hopefully you run a net profit for the month, hopefully you took out some sort of an owner's distribution. You probably had some sort of a payment on your line of credit and you may or may not have bought a new asset inside the practice. So, those are like the high level things that I'm looking at. And just to make sure that it makes sense over time. And then comparing that to back to your breakeven point and why it's so important, comparing that back to your breakeven point and seeing what the cash looks like. How about for you? What are you looking for in a statement of cash flows?Jonathan:The first thing that I look at statement of cash flows again, if it's internally prepared by our firm, then I'm actually looking at it. If it's externally prepared, I usually just throw it in the trash because I know it's probably not going to be prepared well. Statement of cash flows is one of the most complicated financial statements to create, for some reason. I think that the reason is because most bookkeepers and most CPAs do not have any need for a statement of cashflow whatsoever, ever, when they're preparing a tax return. You do not need one for a tax return, at all. And so I think that most people just ignore it, they basically just hit the print button on their financial statements and statement of cashflow pops out and they give it to the people and they get along with it.Jonathan:I think that's what the standard is for most statement of cash flows. If it's internally prepared, I know it will be done well, I know that with the software that we use, the way we have it set up, it's going to give us what we need. If I'm looking at a statement of cashflow, like you said, the way the statement of cashflow is set up is a three prong approach as grouped beginning balance, plus or minus operating expenses plus or minus investing activities, plus or minus financing activities and the end is what your cash balance is going to be and there's going to be a delta between the beginning and the end to see where that money went to. If you don't normalize that, that number is going to be worthless, it's not going to make any difference at all, because you may as well have just looked at your bank statement because your bank statement has at the beginning of the month, how much cash is in there, has the deposits, has the expense, and it has an ending balance. Bank statement says the same exact thing. But in the statement of cashflow, it groups things into logical ways to be able to tell what's going on. Yes, the times when I would look at the statement of cashflow, or whenever I'm looking at a year end analysis to say... If I have client saying What happened to my cash? Statement of cashflow is where you typically tell them where the cash went to. You do a rolling number of showing them, Okay, well, beginning of the year you had this much cash you got this much in loans, you pay this much loans back, you took it out this much in extra whatever, and distributions, here's what you paid yourself and here's where your cash went to and that's the rolling number.Jonathan:That's the standard for small CPA firms or when you have small business clients, you have to do that almost every year for most clients, whenever you're a small CPA firm. For us, we don't do that because we do that every month. We do it in a customized way to show people three things. Number one is cash profit. Number two is what your cash profit versus your tax profit is. So, your cash profit is not what ends up on your statement of cash flow but we use that number to help us calculate what the cash profit is. We have to do those add backs, just like we did with the normalization of the income statement. And by the way, this is probably episode 12 now for the time of the cashflow. You have to normalize that to be able to say what happened to your money.Jonathan:I skipped over the third one which is what is your tax profit versus your cash profit? Because those two numbers are very different. And people get those really confused. We talked about on the financial statements, what's at the bottom doesn't make a whole lot of difference because it could be that the owner paid themselves something or another. Cash profits, the same thing. Your cash profit is not going to be anywhere on your financial statements, you got to calculate it in order for it to be reality. And you've got to normalize that cash profit. You find out what your cash profit is so you know how your business is doing, your tax profits really just there so you can kind of understand how much you've made from the IRS's eyes. So you kind of have an idea of what we will be paying taxes on at the end of the year.Jonathan:That's really the only use for the tax profit number. So, we use the cash profit for that purpose, which is derived from a bunch of different metrics inside of the statement of cashflow. We do utilize it because we also have things like the financing activities is the paying of the debt down and things like that. And they always get, even I get them confused. I don't remember the rules because the software does it for us all the time now. I think technically when you take out debt, it's an investing activity, but to repay it back to financing activity or something like that. Or maybe it's the assets go into the investing and then... It gets real complicated, real fast.Jonathan:There's a real reason why we don't look at it again because we never use it. The only time I'll ever use it is when I'm helping someone to understand what happened to their cash. And then you go in and if it's a well done set of financials, those numbers will roll the right way. If there's a bunch of journal entries done to dodo accounting every month, which is what a lot of firms do, the cashflow statement will not work because the journal entries will not be reflected appropriately inside of the table cashflow almost ever. So to answer the question again, the three things I look at is what is the actual cash profit and then what is the delta of cash? And then what does that versus tax profit?Jonathan:Those are the things that I look at a statement. They're not technically on the statement of cashflow, but that's what I look for when I'm using a statement of cashflow, in the grand picture of things. I think I had a client asked me, actually asked me this one time of, What's the standard that should be going into my investing activities inside of the statement of cashflow? Because they were really studious and they heard about statement of cashflow and they'd read some type of book that had said that there was a really important number that nobody talks about or whatever it is. There is no standard for that. In a small service-based business, it's very much what you're doing, not versus what other people are doing.Jonathan:And the ways and means that you get to those things, that isn't something you can normalize. I've used the term normalized too many times. It's not something that you can aggregate and then make an average of and have it be a meaningful number for anyone, I don't believe. Because there's so many different variables that go into it in such as what type of practice it is, what type of patients you have, how old is your practice, what's your production capabilities as a dentist. There's just so many different things that go into that, that it's a fool's errand to try and figure out is my investing activities, I'm assuming cashflow, optimal comparatively to the other practices that are out there, does doesn't exist. And help us, please, if there is a study out there that says that there's some averages that you should be looking at in dental practices, because I can only imagine what type of data they have. That, to me, is the statement of cashflow. So is there anything else that you wanted to add for that topic?Joseph:Back to that question that I got when I sat down and interviewed for a finance job. The guys told me his favorite financial statement was the cashflow statement and he was a private equity investor, so basically he wanted to know how much cash he could skim out of the business... Not skim out of the business, but he could strip out of the business -Jonathan:Sure.Joseph:In owner's distributions every single month. So, the cashflow statement told him everything he needed to know. Did they make a profit or not, add back depreciation, amortization? What were the loan paybacks? And then that's the cash I can then take out because that was the net change in cash over the point in time. I always struggled with cashflow statement whenever I was coming up through the ranks in CPA land and in accounting land. Balance sheet income statement always made the most sense, but I always got confused. You're talking about this financing versus investing. At the end of the day, the cashflow statement is trying to tell you, where does your cash go?Jonathan:Mm-hmm (affirmative).Joseph:Did it go up or down and why.Jonathan:Yep.Joseph:That's what you need to glean off your financial statement of cash flows.Jonathan:Yep, absolutely. And it's there, you just got to know how to read it. And that's another reason why tell dentists to not spend them a lot of time on that because context is so important. And if you don't fully understand the full set of financials in your industry specifically, you really just can't read a book to tell you how to read a statement of cashflow. It's not going to bear fruit. So to me, hopefully you got good advice and people are painting a picture for you rather than you having to know all the ins and outs of the different elements of financial analysis to be able to divine how these numbers are doing. Those are the financial statements.Jonathan:WE've touched over things, believe it or not. Even though we've talked a lot about the financial statements, we've just touched over the things. There's a lot more nuance that goes into the creation of these things. And, it's almost an art, in a way, of the start to finish creation of them and setting them up in a way in which can be analyzed appropriately. And that was something that I struggled with really heavily on when we started our firm was I wanted to teach everyone how to read their financials. That was my goal in life because I was Man, I want to teach them how to be... they're going to, they're going to be putting people at Goldman Sachs to shame because they're going to be able to know how to read the financials.Jonathan:And I quickly realized that there's no reason to do that. Just tell them what they need, show them what they need. And so what we do in our firm is we definitely take those financials and we paint a tapestry of the important numbers. A good set of financials can be six to seven pages along of data per period. And if you do that over a course of a year, you got a hundred some odd pages of data. What we do for our clients every month is we set up all that information by a single page report that lets people understand really well The answer to four questions, which is how profitable are we? How well did we spend our money? How much cash should we make? And where did that cash go to?Jonathan:But that's our goals with our financial analysis to give to our clients every month. And then we help people, if they don't understand what the numbers say, we teach them, we tell them how to read it and show them what happens. And then if they have any questions about the results, they ask us and we can give them our input from viewing that over 250 times a month. That's the way that we've approached this challenge and approached the problem of that there's not a whole lot of education out there about what are on the financial statements. And I'll be honest. I don't really think that there's, I don't know... I'm torn on this one at this point because my thinking has evolved so much over the past 10 years. Would you spend time if you a dentist going and taking a course, a three hour college course about how to analyze financial statements?Joseph:I wouldn't. I don't think it'd be a good use of your time. I think that if you've got a good CPA or a good accountant that can help you understand your financial statements then you can see what's going on month to month and tell you everything you need to know. I think a three hour course... Because it's not going to be relevant. The same metrics that they're going to teach in that they're going to talk about some of these higher level concepts, like the debt to income ratio or the assets to liabilities, or the current ratio. They're going to talk about a couple of those things. They're not going to say, Here's what your supplies and labs need to be each month. They're going to say, Well, this is a typical in your industry how much your overhead should be. If we're a construction business, we've got more going on materials than you do in a dental, right?Jonathan:And then there's also the different the cost to completion method or, what's the other one? There's another construction one. I can't remember it off the top of my head.Joseph:I mean, if you really want to learn this at a high level, go figure out your favorite publicly traded corporation, go figure out when their earnings call is, look at their financial statements and listen to the executives talk about what's going on inside of those businesses. I think that would be a lot better use of your time. If you really love Apple computers, figure out when Apple's earnings call is and go sit on their earnings call or listen to a replay of it and have them walk you through their financial statements. You get a lot more out of that because it's a business that you know and understand. Or any of these publicly traded companies that are in the dental space. They'll talk to you about what's going on in the industry. Those would be a lot better use of your time than taking a college class.Jonathan:I agree. And the other thing that's really important, closing thoughts, is that the financial statements, they tell you what happened from a financial perspective, they don't tell you everything about your business. Like I told you at the beginning of the conversation that there's people out there that thinks that the financials have everything in there and they don't. Like I said, they don't show you a measure of capacity. They don't show you new patient inflows. They don't show you your production per day. They don't show you your open chair time. They don't show you how many patients are coming in, being rescheduled for your hygiene every month or every day. Those are important numbers to know if you're a practice owner, but they're not on your financials. And no amount of financial analysis is going to give you any of those numbers unless you bridge the gap between practice management and financial numbers.Jonathan:And what we tell people is that we are CPAs. And I know there's a lot of blurring of the lines of what CPAs do and don't do, but for us, we're CPAs. We handle financial analysis and we help you with financial analysis. Practice management analysis should be done by practice management consultants. We are not practice management consultants. I know that there's a lot of blurring of the lines in the dental industry for what is a practice management consultant or not. And, yeah, we know a lot about the numbers, but I don't know your hygienist, I don't know your office manager. I don't know your management style. I don't know what type of patients you have every day. I don't know how you like to turn patients over. I don't know how you like to have your tools set up and how efficient that makes your assistant.Jonathan:I'm not going to tell you how to do those things. I've never been a dentist before. I can tell you how to be a leader and things like that, but I'm not going to be able to give you that practice management information. And so to me, in terms of the best financial advice I can give someone is to pay a practice management consultant for that time that you're spending, because you were paying a CPA, you're paying $200, $300, $400, $500 an hour for this advice. And if you have a CPA doing this for you, more than likely, all they're going to find is problems. Probably not going to have any solutions, probably it's going to be problems are going to find. So rather than paying them somewhere between $200, $500 an hour for someone to find problems, pay a practice management consultant between $100 and $200 an hour to find the problems and give you the solutions. Much better use of your money, so to speak.Jonathan:So financial numbers can help you look for areas of focus, but they're not going to be giving you hard, cold facts that this is optimal performance. That's not how financials work, unfortunately. That's a big misconception, too. And I think there's a lot of people out there that they get into this game because business is a game in a way. And they think that If I optimize the financials, I'm going to win this game. And it's not the financials. It's really the people that you got to optimize. It's really the performance that you got to... Practice management. It's a different game, it's a different thing. I want to make sure that I'm putting that out there that financial analysis does one thing, practice analysis, practice management analysis does a whole nother thing. It's a whole other ball game. Any other closing thoughts you have, Joseph?Joseph:Well said, Jonathan. And ditto those things that you said. Financial statements can tell the story, but they don't tell the whole story. They can give you a glimpse of where you're at and where you've been. That's the other thing about financial statements is they're always going to be backwards looking. I had this conversation with one of our clients a couple of weeks ago. Inherently, they are talking about what happened in the past. It doesn't tell you what's going on in your practice today, what's on the schedule for next week. Those are not going to come out of your financials. They're always going to be backwards looking. So the challenge is to marry the two. Come up with what your goals are, figure out what you did in the past and figure out what your future needs to look like to get to the place you want to get to. And I think that's where the beauty is.Jonathan:Exactly. I agree. It's been a fun set of episodes. Hopefully you've gotten a lot of value out of this, listeners. If you have any questions about this, obviously, we talked about this too much already to our loved ones, and they don't want to hear about it. So if you want to come over to the Facebook group and chat about financial statement analysis, we'll be there and talking about it. Maybe if you had some type of a really interesting number you found in your practice or you've had a way that you've been able to affect your numbers we'd love to have you over in the group and be able to hear about it. Or if you have any questions about what your numbers mean, we can maybe give you some context around that in terms from a financial analysis perspective. We appreciate you listening in. Hope you've had fun and we will see you next time.Joseph:Bye, guys.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country and would love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're requiring, about to be an owner of a practice they are starting up or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:And if you enjoy today's episode, again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the longterm. Lastly, if you want access to those resources that we are currently building, just text the word Tooth and Coin to 33444. That's tooth and coin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444. Apply with your email address. We'll send you the instructions to the Facebook group. We'll send you the resources when they're available and we will see you next week.

Join the discussion on Facebook!TranscriptJonathan:Hey everybody, Jonathan checking in here. And just so you know, this is a second part of the episode. So if you've not listened to the first part yet, you want to go back and listen to it in the prior weeks. We should have it labeled on the episode title what part one is and part two is. So you should be able to see that in the title of the episode it is what episode of episode it is. So thanks.Jonathan:Welcome to the Tooth And Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific, but we hope that these episodes help you along with your journey. Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share? Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it, and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion to be able to help you a little bit more than what the content is doing. So if you'd like access to that whenever it becomes ready, all you have to do is text the word toothandcoin, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address, and we'll email you instructions on how to get into the Facebook group. As well as add you to a list to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well.Jonathan:So onto today's episode, hope you enjoy it.Jonathan:We work with around 250 offices, and we see there are just differences in dental practices. So a P&L, to me, is a fantastic thing to look at to have an understanding what's happening. But to me, you have to be financially savvy enough to calculate out that seller's discretionary earnings in order to be able to calculate what the actual profitability of this practice is on a dollars and cents perspective. Once that is done, you would then look at those different key categories, which again is another area where I find a lot of dental practices financials don't have things properly segmented inside of their financials. So you can't do that. So the presentation of the P&L for dental practices is just as important as the understanding. Because you and I could look at a financial statement that would come to us, and if it's not a really, really well-defined P&L.Jonathan:I mean, we've seen P&Ls that came through that had 10 expenses on it, and that's all the expenses on the P&L. They have nothing else. And it's just like-Joseph:Wages.Jonathan:Yeah, wages. Like payroll taxes-Joseph:Supplies.Jonathan:[crosstalk 00:03:36] that. Insurance is on that. They have a consultant, probably, in wages. They probably did some recruitment, that was in wages. And it's just all in one big pile, one big line item. And you can't define anything out of that. So presentation is just as important as well. So what about you? What are some other things you like to look at on the P&L? Because I could probably talk about this for another two hours.Joseph:Yeah, no. I like to look at the owner's discretionary expenses and really make sure that you're able to do that. Anytime that you're ever going to buy or sell, it's in everyone's best interest to do what's called normalize the financial statements, which is what Jonathan just described there. Which is like all of this stuff that the owners run through that are ordinary necessary business expenses, if somebody else came and bought the practice out, a PE firm or a bigger company comes out, or DSO, whatever, comes in and buys, they're not going to spend $18,000 on the travel to take you to eight CEs across the country. Right? They're going to come up with probably a more cost-effective way to do that. So I like looking at the owner's discretionary expenses.Joseph:I like looking at labor, and seeing how much are we spending on labor? One of the calculations that we make for our clients each month is: what percentage of your money are you spending on clinical staff, hygiene staff, and clerical staff, divided by your top line revenue? And one of the things that we try to get inside the benchmark of the industry. And if they're significantly outside of that benchmark, like in a bad way, if we want that number to be, let's say, 25%, and that number's at 35%, then that tells us that that's something that we need to dig into.Joseph:Now, some people might just say immediately, "Oh, that just means we need to cut salaries and cut staff by 25%," but then if we just kind of look at the top line and we're like, "Well, the practice only collected like $20,000 this month," it sounds like it's probably more of a collections problem and a top line revenue problem than a production problem, and maybe an AR problem, versus spending too much in wages. So I like to look at that. I think that when you look at your people, and we've talked a lot about leadership inside this podcast, the people that are inside your practice that are helping you make this thing go certainly are a big, huge asset to you. They officially go on the P&L. But I want to make sure that we can it back and challenge the staff and say, "Hey, look, we need to grow the practice in order to justify the money that we're spending on all of the people that are here." That's something that I look at.Joseph:I like to look at supplies and labs and figure out if that's kind of something that's significantly out of whack. If you got $20,000 in collections but you're spending $25,000 a month in labs, anybody could tell you that's a problem. Right? So I look at supplies. Like to look at labs, like to look at wages. And then I'm just kind of looking for like any crazy stuff that sticks out, any kind of big pieces. Like going back to the comparative piece that we were talking about with the balance sheet, I like to look at a P&L and I like to look at this month versus the past three months or four months or five months, so I can see if I can note any trends. And then if all of a sudden I see an $8,000 expense that pops into an expense category, that may be something we need to look at. Like, "What's going on here?"Joseph:It's like, "Oh. Well, I had to replace the roof," or, "I had to replace the AC," or, "I had a piece of equipment that I bought," well, maybe that doesn't need to be on the P&L, maybe that needs to be on the balance sheet. Maybe we've got kind of a bigger problem here if we see huge, huge increases. And the technical term that we call it in the accounting world is that we're going to do an analytical review. We're going to analyze, we're going to look at what all has happened. So those are some of the things that I'm looking at when I'm looking at a P&L. I'm looking at wages as a percentage of revenue, like all the money that you're spending. So obviously that's going to include whatever your 401(k) matches, whatever your health insurance is you're paying on behalf, your payroll taxes. All of that goes into paying for your people.Joseph:I'm going to divide that by the top line revenue and see what that number looks like. And that's one of the reasons that it's important. You were mentioned in the 10 line income statements we've seen, that's why it's important that wages need to be separated out. It's like, "What do you mean you put your doctor's wages in with your doctor's family and with your hygiene staff, and that means that our wages are now 290 ... Well, of course they're out of whack. Right? Because we need to separate those things out to determine whether or not we're spending our money wisely on our staff."Jonathan:Yeah. Completely agree. I was having a conversation with someone on a podcast years ago, and they were like, "Well, taxes are your number one expense as a business owner." And that's a line that has been fed to so many people. I think probably even I heard that in tax class when I was taking a tax one and two in college, or whatever. But in dental practices, that's not the case. Taxes are not your ... Now, if you add up all the different types of taxes, they were talking about income taxes. That's the narrative we're usually give them around that. Your staff is your number one cost.Jonathan:It's your number one investment is a way I'd love to be able to rephrase that, and be able to ... the paradigm change of a practice, because if you're spending 25 cents out of every dollar that comes in the practice, up to 35 cents out of every dollar that comes into the practice, on your people, then your practice that nets, let's say, 40%. And if you're paying 40% in taxes on 40% of what's left over, you're only paying 16% in taxes, 16 cents per dollar, for your staff, for your income taxes. Whereas you're paying 25 to 35 cents per dollar for your staff. Big difference, right? So your people are your big difference. And that's a good thing. You want to pay people to do good work for you. I've definitely ran into CPAs or to clients that have had CPAs in the past that have said that, "Oh yeah, you're overpaying your people by this much money. And this is how you're going to get your payroll in line, is you're going to clean house and lower everyone's wages by this amount."Jonathan:And it just kind of makes me sick that ... that can wreck the practice if it's not done really, really well. I will say it is possible to have an overpaying problem, to pay people a whole lot more money. But to me, and we use this concept in our firm, I would rather overpay for good people and have my life be easier than have to worry about the $1,500 a year that I'd be saving if I was trying to not be competitive with my wages. This is a pretty bold statement, but I would think that, as a dental practice owner, you should be wanting to be the highest paying person in your area for doing a good job. Because you want the best people. You don't want the worst people. The best people can raise you up really, really high. And so staffing costs definitely look at. But from a percentage-base, from an analytical standpoint, yeah, we got to have some type of understanding of how to reign in these numbers on our staff, to be able to give some type of context on how we're doing, how well we are spending our money.Jonathan:And that's what we say we're answering the question of whenever we do an analysis of overhead every month for our clients is, it's literally the question that this information comes in. We have a four questions report, and one of the questions is, "How well did you spend your money?" And we have an overhead analysis that gives you percentages of these things. So definitely staff definitely supplies, definitely labs. But another thing that I really like to look at, after I've looked at profitability and I've looked at the balance sheet and everything like that, is I like to look at growth expenses. What are we reinvesting in? What is going to happen in this practice? And are we seeing growth off of those said expenses? We've got a lot of clients that have 0% of fees or their revenue goes to growth expenses.Jonathan:Nothing. They don't spend anything on advertising. They don't spend anything on consultants. They don't spend anything on big new courses or things that they were trying to learn, anything like that, but they're still growing. And then we have people that will spend 15 to 20% of every dollar that comes in on these things, and they're not growing at all. So effectiveness of growth expenses is a very important number that I like to look at just when I'm trying to say ... Because that's a very quick thing for me to be able to tell our clients, like, "Look, your growth expenses are really, really high, and we're not seeing any revenue growth. Is this an effective use of our spent? Of our money? Because I love that you're willing to invest in the growth of your practice, that's what you're supposed to do as a business owner, but is this the most effective use of that money?" And for-Joseph:[crosstalk 00:12:11].Jonathan:Exactly. So for dentists that can be a really big deal. That's a really, really, really big deal, is effective use of advertising spend, or growth spend, consulting or whatever it may be. And that's something that gets lost a lot whenever you analyze financial statements too much is, what is our ROI? I don't go into such fine detail of saying, "We need to know the cost per lead of everything that happens from every single campaign," or anything like that. I just hope that you've hired someone that's smart to do your advertising that does that for you. And then you can validate those things down the road. I don't think that you should be spending 30 man hours a week trying to figure out just how effective those lead funnels were or anything like that.Jonathan:So from the P&L, those are the big things. Obviously we back out interest, appreciation, amortization, and things like that when we do the normalization and seller's discretionary earnings. I don't put a whole lot of weight into looking at interest, depreciation, and amortization. I'm never going to look at an interest ratio or anything like that for a dental practice. I don't think it's really very fruitful of an endeavor. I might very briefly see like, "Oh, there's $30,000 on interest. This person has a lot of debt." But if I looked at the balance sheet I've already noticed that. So if I'm looking at, "Is this a well ... This is a good set of financials," if I see that $30,000 in interest and I see no debt on the balance sheet, then that makes me just roll my eyes and throw the things in the trash, because I know that it's probably not a good financial statement.Joseph:Not good financials. Yeah.Jonathan:Or interest is [inaudible 00:13:43]. What else have I seen? I've seen credit card fees be put to interest expense. I've seen ... there's just so many things you see get stuck in there. So anyway. Yeah, to me that's what the P&L's for, is show, number one, it has to be well put together just like the balance sheet, just like statement and cashflow, or else it's almost worthless. You're looking at revenue. And then also comparatives. Again, we look at ... Whereas the balance sheet is a snapshot of time, a P&L is a story over a period of time. So whenever you're looking at the stories you have to compare a period over a period to be able to tell that. So in terms of that, of how to use comparatives inside of P&Ls, how do you look at versus the past?Joseph:Yeah, so one of the things we were talking about with the balance sheet is getting a chance to look at some different ratios, right? So we talked about like the current ratio, current assets divided by current liabilities, and how we need to basically figure out a way to create a level playing field. So if your practice started out at $400,000 in collections, you add five more practices and now you're at $4 million in collections, right, that's not exactly the same to look at a top line revenue number. So one of the things that we do on income statements is we look at it as a percentage. So we look at what is the percentage of revenue that we're spending on all of these different things. So if we're just going to hop straight down to the bottom line, we take the net income divided by the top line. So if you made $100,000 in net profit, divide that by a million dollars in practice, your net income was 10%.Joseph:So as mentioned there, we're going to also make the adjustments that we need for the owner's discretionary expenses, probably going to back out depreciation, amortization, and interest. And we'll be able to get like a pretty clear picture as to how we're doing running a $4 million practice versus a $400,000 practice. Obviously the net income, the bottom line, is going to be different. But if you're making a 2% return on a $4 million practice, maybe you were ahead to not be a $4 million practice, and maybe you would be ahead to stay a $800,000 practice. Right? So we're constantly going to look at the percentages of those things. And as you're looking at those over time, you can compare what's the net income look like, what's the staffing look like as a percentage of income.Joseph:You mentioned the growth expenses, Jonathan. So as we grow and as we get established in this market, maybe it doesn't make as much sense to spend as much money on marketing once our, quote, name is out there. Or it may be one of those things we need to slow down the growth in the practice, so we're going to decrease that. So what do all those things look like as a percentage of revenue? So I think those are the things that I'm looking at in terms of kind of looking at things over time. What do those percentages look like, and how are we doing? And what's our net profit dollars look like? Our net percentage look like? And how do we advance it towards the goals that we have in mind, whatever those goals may be?Jonathan:Yep. And that's the reason we started the whole conversation with the financial statements is saying that they're a body of work, but they're not the end all be all that a lot of people think. There's probably some dentists that are listening now that think that we're almost being blasphemous by saying that financial statements don't answer every single question that has to do with the dental practice. And to the concepts that you're talking about, yeah, I mean the concept of diminishing returns versus scale is something that happens a lot in service-based businesses. Which diminishing returns, just a quick explanation of that, is as you grow larger, the effectiveness of things or the profitability of things does typically go down, unless you have really big economies of scale.Jonathan:There's a lot of people trying to craft a narrative about the DSO space, saying that, "Oh, we've got 20 offices and we get this economy of scale on our supplies. And we're going to make tons of money on that." And when you think about it, okay, let's say that you're going to actually save 10% on your supplies if you have economies of scale. Your supplies are going to be like 7% of your revenue. That means you're going to save 0.7% of your total revenue.Joseph:Seven tenths of 1%.Jonathan:Yeah. Are you trying to grow to 20 locations so you can save 0.7%? That's not the purpose of that, right? You want to get it so the whole number gets bigger. The other part about that is diminishing returns are a really easy concept for me to be able to ... or a really easy example of that is, when a business grows to a certain size ... The way I tell people to imagine it is, think of it as a capacity, think of it as like a circle. And your total capacity is that circle. And I've also taught people to think of it as like a glass, like that you fill with water. When you get to a certain size you may be overflowing with water, your circle is about to burst. And you've got to expand capacity in some way. And when you expand capacity, there's a very few ways you can do that. You can add time, which means that you open more hours. You can add people, or you can add space.Jonathan:And if you already have an effective use of people, but you have access to space, maybe space is the best way to do it. If your people are maxed out in what they're doing in a day, a lot of times what that usually looks like is you adding an associate. And the associate is a really good example of a diminishing return, because in order to have someone there that's a practicing dentist, you can see a dental practice's profitability go from 55% all the way down to like 30% almost overnight when they add an associate in because we're paying this associate so much money to be there comparatively to when they were there before. It's one of the reasons why it's super important to not be adding an associate before you're really ready for it. And there's a lot of different things around what being ready for it means. Like new patient flow, capacity, utilization. There's a lot of different things that go into when that's right for the different dentist.Jonathan:And cashflow too. And also, like you said, goals. What is it that you set out to do? And how does this help you address those goals? So the diminishing return concept in that is that there's a point in time where, if you're a full-time dentist that's very busy, say you have 2000 patients, if you've got like 100 new patients a month coming in, you've got 2000 patients already and you're maxed out and you've got two-and-a-half hygienists, and they're maxed out and booked out four weeks in advance, and you've got two assistants that you're already working out of two and a half chairs a day on, and you've got two front office people that are just stressed to the max, maybe the only thing you have left to do is add an associate. And once you do that, immediately after that you're not going to have 4,000 patients. A way that I tell people to conceptualize the capacity of a single dental practice owner, or single dentist, is somewhere between, it depends on the dentist, somewhere between 1500 and 2500 patients. Maybe up to 3000 patients.Jonathan:In order for you to have two dentists there, you have to have twice that number of patients. It's just simple, right? It has to be that way. And to get to that, once you've upgraded your glass, the bigger glass, you've got to have more water to fill it. In order to get more water to fill it, you've got to have a patient flow. And if you've got 100 new patients a month coming in, and you've got a new person coming in, it's going to take you, to get to 2000 more patients, at least 20 months to get that full capacity. Now you're also going to have attrition, so that's going to create a little bit more of a flow, a little bit longer time for you to be able to hit that point. But in that timeframe, between the time you add that associate to the end of that time, you're going to have a diminishing return. You're going to have an investment in that new person.Jonathan:You're going to be making less money usually. Because usually you have what's called the cannibalization of production, or that's a term that I call it. Because in order to feed that person that came in to work for you, you got to give them some of your production, and they usually don't produce as much as you used to produce. And then you're also paying them 30% of that. So there's a lot of [inaudible 00:21:21] that go into it. But in terms of the growth and scale, whenever we're looking at a P&L, if I look at a practice that has had an associate for only six months, and I looked at that practice a year before, it's going to look very different. So to the determination of the growth and things like that, it's really important you understand your path, what you're trying to accomplish with this practice.Jonathan:I talk to dentists every day, one person will be like, "I want to get to a point where I'm doing 1.5 million a year in revenue, no associates, nothing else going on. I work four days a week, and I'm killing it." And I have other people that said, "I want to own, be adding a new practice and a half every year for the next eight years." Everybody has their own path, and everyone's right at the same time. What's right for one person is not right for the other. But the P&Ls will say different things, because the P&L of that guy who's adding an office every year and a half, they're going to have a lot of growing pains. They're going to have a lot of cashflow issues, they're going to have a lot of profitability issues. They're going to have just a lot of issues because the missing component in that is time. And that time usually it leads back to the non quantitative numbers, or nonfinancial numbers, which are more practice management in nature.Jonathan:So those are really important pieces. Another thing that we talked about earlier that I wanted to talk about is the breakeven point. So when I'm looking at a P&L, a lot of the data that goes into your breakeven point comes from the P&L. There are things that come from the balance sheet as well, technically. Or the statement and cashflow technically. But the breakeven point is a really, really good number for you to be able to tell, as a business, like, "If I don't really have a whole lot going on, if I break my arm next month, how much is this business going to cost me to keep open?" Or, "What's the minimum amount of money I can produce in a month and actually start making money?" Or, "If I want to make, say, $30,000 a month, how much do I need to be bringing in collections?"Jonathan:Your breakeven point is a number that would be involved in each of those answers. I was always [inaudible 00:23:16] the people didn't calculate that internally. And then I have a math background, and so I was like, "I'll just calculate it out and be it." The thing is, it's an evolving number, right? Like it's a number that doesn't stay the same. It has variabilities inside of it. And as you grow it has even more volatility that goes along with that breakeven point. But in general, you can usually come up with a ... Over time it normalizes. Right? So we give that number to our clients every month. "Here's what your breakeven point is," so they can have the context of, "Well, I want to make $30,000. My breakeven point's $45,000. I've got to be producing 75 right now. My average is 55. I got a lot of work to do." They know they got to influence it.Jonathan:They're not going to be surprised when they don't have $30,000 at the end of the month. They're going to know what that is. So what about you in terms of breakeven point, things like that? What are some of the things that you like to use a breakeven point in order to be able to use in terms of management and goal setting and things like that?Jonathan:Hey everybody, Jonathan checking in here. Just so you know, this is a second part of the episode. So if you've not listened to the first part yet, you want to go back and listen to it in the prior weeks. We should have it labeled on the episode title what part one is and part two is. So you should be able to see that in the title of the episode [inaudible 00:24:33] what episode of episode it is. So thanks.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth And Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country and would love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:And if you enjoyed today's episode, again, go to the Facebook group, talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the long term.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's tooth and coin, no spaces, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Apply with your email address. We'll send you the instructions in the Facebook group. We'll send you the resources when they're available, and we will see you next week.

Join the discussion on Facebook!TranscriptJonathan:Welcome to the Tooth and Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific, but we hope that these episodes help you along with your journey. Now a very important piece for you to understand is that this is not paid financial advice, this is not paid tax or legal advice. We are not your financial advisors, we are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share, join us on the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it and be able to join us there. Finally, if you need some more help, we're developing a list of resources that are going to be centering around our topics of discussion to be able to help you a little bit more than what the content is doing. So if you'd like access to that whenever it becomes ready, all you have to do is text the word toothandcoin T-O-O-T-H-A-N-D-C-O-I-N to 33444.Jonathan:Again, that's toothandcoin, all one word, no spaces to 33444. Reply with your email address and we'll email you instructions on how to get into the Facebook group, as well as add you to a list to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well. So onto today's episode, hope you enjoy it.Joseph:Hello, ambitious dentist. And welcome to another exciting episode of the Tooth and Coin podcast. I'm your host Joseph Rugger joined by Jonathan VanHorn. We are at episode number 10 and today we're going to talk about financial statements. Everybody's most exciting, most exhilarating topic that you could ever imagine is financial statement analysis. Jonathan, welcome to the show.Jonathan:Yeah, exactly. I talk about financial statements at night after dinner with my wife with a big old glass of wine and she just loves it. It's a big topic of conversation in our house. It's amazing. Not really. She does not like it. She does not listen to those things.Joseph:Everybody's topic of conversation right before bedtime is financial statement and financial statement analysis. Well, so Jonathan, we were talking a couple of weeks ago and I was talking to you about a job interview that I was sitting in one time and I was getting interviewed by a guy to take over a financial position for a company. And he asked me a question. He said, "What is your favorite financial statement and why?" So I think that'd probably be a good place to start. What are the three financial statements that are out there? Or are there two financial statements? Or are there one? Whenever we say financial statements, I'd say most of our clients, most of our dentists probably only typically think about one financial statement and that would be the profit and loss. But when we say there's three main financial statements or three recognized financial statements, what are those specific financial statements and what are they called?Jonathan:Yeah. So the three most common are going to be your balance sheet, profit and loss statement, cashflow. All three of those have different names that you can call them. I've had people be confused and like, "What's our profit loss? I've only ever heard of the income statement." Or, "What's the statement of income?" Or all those other things. They're the same thing in general, it's the balance sheet, there's your profit and loss or income statement and then the statement of cashflow. Those are the three main ones. And in terms of your question, to me, the financial statements, while there are three separate ones, really to get a fuller grasp of what's going on from a financial picture, you kind of have to be able to look at all three of those at once and be able to read what each of those are saying intertwined with a bit of education.Jonathan:It's not something that you can just intuitively look at for most situations of I'm looking at the balance sheet, I'm looking at the statement of cashflow and looking at the P&L. And all of a sudden, "I know everything about this business," and that just doesn't exist. And one of the big problems in the dental industry is there's a lot of misconceptions around what's on those financial statements. And on one side of the coin you have people that think that they're completely worthless, and then on the other side there are people that think that the financial statements are supposed to have every answer that exists about your practice. And neither of those answers are correct. The financial statements are great and they tell you a lot about the business, but you have to understand what's going on and you have to understand what you're looking for in each of those financials, in order for you to be able to actually get any value out of those financial statements.Jonathan:And I think that's the reason a lot of people have misconceptions and some confusion around the value the bookkeeping brings and things like that. So to me, the answer "What is my financial statement?" It's all of them. And if I had a choice, I'd have all of them plus some practice management information to be able to look at in order to be able to tell what's really happening in a business in terms of the dental field. I think the most correct answer is it depends on the industry because there's a lot of nuances in this. Not only are there different sets of financial statements, there's different ways those financial statements can be reported. There can be an accrual basis, or it can a cash basis, the income tax basis of accounting. There's a bunch of different ways in which those same things can be reported to people. And if you don't really understand how it's being reported to you, you can make some mistakes and not have the full value of it. So what about you? Which one's your favorite one?Joseph:It's a good question that the guy asked me at the time and he had a right and wrong answer in his head. And his right answer was a statement of cash flows, which as many accountants knows it's difficult to kind of glean a picture from somebody that's not used to looking at cashflow statements. So anyways. Let's say all I had to say my favorite financial statement is the balance sheet. And I think that'd be a good thing for us to talk about. We could probably spend an hour on each financial statement and trying to analyze how it all comes together. But my favorite financial statement is the balance sheet. And to me, the thing that always sticks out to me about a balance sheet is it is a measure at a specific moment in time.Joseph:So what is your balance in your balance sheet accounts as of today, as of the end of last month, as of the end of last year, as of mid-year? It's as a point in time. Which is always kind of one of those things like let's take a snapshot of exactly where our assets sit, our liability sit, our owner's equity sits, at a point in time. And to me, in my small accountant brain, it gets me a chance to figure out what are the assets minus liabilities and what's the book value or the net worth of business. Which is something that I think that a lot of people can wrap their heads around once we kind of put it into some simple terms. So whenever we talk about assets, we talk about liabilities, we talk about owner's equity.Joseph:One of the things that I always talked about whenever I was teaching class and teaching students at the college level and teaching accounting 101, they don't really understand how all of it comes into play. So I use the simple example of a home, right? So it's not specific to the business, but it'll kind of help you understand what an asset is, what a liability is and what is the "equity," the owner's equity in that. So we'll just use easy numbers, Jonathan. If you have a house and that you own a house, and that house is valued at $200,000, that is the asset. $200,000 is the value of that house. If you have a mortgage on that house and the mortgage balance, the liability balance on that house is $150,000, right? So we have a $200,000 asset, we have $150,000 liability, then that means the equity... That's something that everybody's going to be familiar with. The equity in your property, in this one specific piece, in this one specific example is $50,000.Joseph:So if I wanted to look at a position of strength or weakness, I can look at a balance sheet. I can look at the balance sheet on the asset side, I can look at the liability side, and then I've got kind of the difference. What you own minus what you owe is your worth, your net worth, your net equity, your net owner's equity. That's made up a whole bunch of different complicated things. But it seemed to click with my students whenever I would say, "Think about owning a house and there's going to be a difference," hopefully there's a difference and hopefully it's a positive amount between what your property is worth, your house is worth minus what your mortgage balance is, and that's the equity that's in the property.Jonathan:Yeah, exactly. And that's a great way to simplify the assets minus liabilities equals your owner equity, which is what you learn in accounting 101 is A-L=O. There's three main categories that go on the balance sheet. And I agree, the balance sheet is a great way to be able to look at the financial health of a company. It may not be able to tell you trends or net profitability or anything like that, but it can definitely show you the liquidity and it can show you what type of debt ratios are coming into play. And it can also show you how much money is this business actually making from a accounting point of view, not necessarily a cash point of view. That's one of the limitations of these financial things as I said before is that if this balance sheet is set up on the income tax basis of accounting, that owner's equity has a lot of different things that affect it, that it can make those numbers look a little odd.Jonathan:And the reason is because that equity number, it rolls over every year and so it's like a running balance. And some people can get kind of confused on it because you can literally have a profitable well ran dental practice and have almost nothing on your balance sheet. Your assets could be, say, $100,000 and your owner's equity could be $100,000 and that practice could be a $2 million practice. So one thing that's an important concept to also introduce is that value does not technically equal the equity. So to take your home value another step further so that people can understand the balance sheet, if that home skyrockets in value... Let's say you bought it for 200,000 and you owe, let's just say, $100,000 and you have a $100,000 owner's equity.Jonathan:If the value of that home went up to $350,000, you still only bought that thing for 200,000, right? But you now have equity of 250,000 because you still only owe $100,000, but the value is higher. So your basis is $200,000 minus $100,000 in liabilities equals your basis is a $100,000. But your value is $150,000 above that. But in the accounting world for the income tax basis of accounting, you don't write up basis to what the value actually is. You just keep it at what your basis is, because that's what we're trying to track on an income tax basis of accounting. So if you're looking at your balance sheet and you're like, "Oh no. I only got $150,000 in assets and nothing else and then $150,000 in equity." You may have a business that's worth a whole lot more than that. And that's just what we call a book tax difference.Jonathan:If we were being very, very, very, very, very, very, very, very thorough, and spending a lot of time on your books and you're paying us a lot of money to make those write-ups and adjustments to actual value, having evaluation done every year and having everything be written up to the value of the practice, then the balance sheet would say those things, but that can be kind of like a hidden thing inside of a balance sheet.Jonathan:So I think that's an important point to get across too, is that the balance sheet shows you a lot of really cool things and also, there can be things that can be a little bit misleading. So when we're talking about the differences in equity, the equity section is the area that always gets kind of confusing to people. So be careful around that piece. But let's talk about what you look for on a balance sheet to see a healthy dental practice, so to speak. Yeah. Let's just focus on dental practices rather than talk about other industries and things like that.Joseph:Yeah, sure. So whenever you look at a balance sheet, as Jonathan mentioned, there's three sections. There's assets, liabilities, and owner's equity. And inside of the balance sheet, most balance sheets are going to sub-categorize all of those different sections. So in your asset section, you're going to have something that's called a current asset. So a current asset is something that can be converted to cash or is cash, can be converted to cash in a year or less. So this would be how much cash is in the practice checking account. Do you have a certificate of deposit? Do you have a savings account? So these things all can be turned into cash either immediately or certainly in less than one year. So those are current assets. And then you've got your longer term assets and you may have some property, you may have some equipment.Joseph:All of those things are going to fall into a separate section of the asset section of the balance sheet. So whenever I'm looking, kind of initially, and I'm taking a quick glance, I'm going to look at current assets. And I'm also going to look at the flip side of that, which is a current liability. So when we talk about a current liability, it's the same one year rule. So the current liabilities are things that are due in less than one year. So think real simple terms like your credit card, that's due within 30 days, right? If you're tracking your accounts payable through your balance sheet, that would be a current asset because that's going to be due in less than a year. Versus a long-term liability, maybe your ten year practice loan, that's going to be at a different section.Joseph:So one of the financial metrics that a lot of banks are going to look at when they're trying to evaluate your financial strength as a practice... And again, this is an imperfect system, there's a tons of different ways to value different pieces. But they're going to look at what's called a current ratio. And it's very simple, your current assets divided by your current liabilities. So just to give you an easy example, if I've got a $100,000 of cash in the practice checking account and I have an accounts payable balance, credit card balance, all of that, all my current liabilities added up to a hundred thousand, then I have a current ratio of one. And what that simply means is if all of those got called today, all of those liabilities, the bank called, the credit card called, the line of credit, all that stuff gets called today. You can pay all of your bills times one.Joseph:If you had, for example, $200,000 in the practice checking account and a $100,000 in liabilities or current liabilities then you could do that twice. So that would be a current ratio of two to one. I mean, when you look at financial statements, Jonathan, I think that a lot of people look at different pieces. I mean, it's easy for me to say that if you have less cash on hand than you do in credit card debt, that's a problem and we need to work through that. But what are some of the kind of healthier things that you're looking for? And we just talked about current assets divided by current liabilities. Or basically, if we're going to super simplify it down, cash divided by bills that are out there. What are you looking for?Jonathan:Yeah. On the balance sheet specifically, the first thing.... So another thing that is important for people to realize in terms of balance sheets, is that everything is listed in the form of liquidity. So the most liquid assets are listed first instead of the assets in your balance sheet. And the way the balance sheet is set up is there's the assets set, what are called just assets overall, and those are broken up into current long-term assets and other assets. And then there's a liability section, which liability section it's supposed to be listed in order of how soon that debt is due. So the first thing that I look at the very top, which is the most liquid thing, which is cash, cash is always going to be your most liquid thing all the time.Jonathan:Usually, the next thing is going to be something like AR inventory equipment, and then other assets like intangibles and things like that will be listed. But I always look at cash. I mean, that's the first thing. Because if I look at a practice and the cash equals $20,000, unless this is a startup, this practice could have some issues going further. There's a lot we can't answer yet. So in terms of a math concept, this is a not enough information type thing. But if I'm looking at a balance sheet that has very little amount of cash, there's some liquidity issues. What happens if a machine goes down and we're going to have to take on debt? If we do have to take on additional debt in order to do that and that can exacerbate the cash problem.Jonathan:So the first thing I look for is cash. I look at how liquid is this business because that can give you a lot of signs and that gives you a lot of context for what you're going to look at when you look at the other pieces of the practice. So the next thing that I'll look at is the current debt. The liabilities that are likely to have to come up soon. Like you said, if cash is less than credit card debt, then that's a big red flag, we've got some issues here, we've got a cash issue. Because that should not be the case in most dental practices, you should not have more credit card debt than cash. From a financial theory perspective, the interest on your credit card debt will eat away at your cash faster than your cash will sit there.Jonathan:So the value of that cash will go down, the interest on the credit cards would go up and you're going to have a problem that's just going to get worse before it gets better. So yes. That's a big issue for most dental practices. If I'm looking at a balance sheet just to kind of analyze how the business is doing. And another thing that I want to really, really quickly hone in on because we didn't preface this. We're just analyzing a practice in terms of looking at someone who has a practice and how well that practice is doing, we're not looking at this in terms of buying a practice because what the old owner did and how good they were at saving money does not affect the new owner.Jonathan:This is not a specific situation that we're talking about. We're looking to buy a [inaudible 00:19:00] that. Because to be honest with you, I don't think I even look at balance sheets whenever I'm analyzing practices to purchase, but when I'm looking at a clients'... If a client says, "Hey, how's my business doing?" I will look at a balance sheet in that regard because it can help me guide them better with what it is they're needing to do. Whereas if we're buying a business, I don't really care what the old owner was doing, I only care what the new owner's going to do. So there's a little bit different of a situation there. And you don't buy the credit card debt when you buy a business, so who cares if they had $100,000 in credit card debt?Jonathan:That could show us something in terms of a spending issue, but the spending on that liability would be affected in the P&L under expenses, so we'd also be already taking that into consideration when we look at the P&L, which we'll get to that in a bit. So anyway. So yes. Cash and then I'll look at short-term liabilities. And then I look at total debt. I mean, how much do we actually have in debt in this office? Because that's a big thing. It's a big deal. You need to know how much money in debt this practice has because if you don't then it's the same thing. Is this a problem that's just spiraling out of control? Is this just we're investing in the practice heavily and we're using other people's money to do that? If so, that's fine, but I don't like seeing a whole lot of debt and seeing cash and credit card debt being flip-flopped.Jonathan:It shouldn't be a negative balance there and we're taking on consistently more debt. The only way I could say that that would be worth it would be is if for whatever reason you're.... I don't know. If you knew that you bought X machine, X machine would be bringing you more money. That's really the only way that that'd probably be making sense. So that's what I look at on the balance sheet. I do look at equity a bit just because I'll have to see if it's an escort for how much in distributions we're taking. Equity has the net income on there, but unless it's something financially in our firm created, I don't really even look at the owner's equity because I just assume that it's going to be wrong.Jonathan:As you can say, Joseph and I have talked before, before he joined our firm. He was like, "I had no idea that so many firms didn't know how to do bookkeeping," right? And we demand a very high quality of bookkeeping service from our company and for our clients' benefit because we believe in what's on those financials. So basically, unless it's a trusted source for that financial statement, I don't even look at it on the equity side because most of the time it's wrong. And so my assumptions of being correct... Usually cash and liabilities are usually right. We've definitely seen people come in with debt and their debt is negative $800,000 and we're like, "This is great. We're going to have some work to do on this one." So that happens. But anyway. So that's really what I look for on the balance sheet as a whole. What about you? Is there anything else that you look for on balance sheet?Joseph:One of the things I love to do with balance sheets is I love to compare them and see. So most of your accounting softwares that are out there or if you have financial statements that are generated, this is basically a book value of your practice that you can look out over time. When I'm doing a financial statement analysis or a client asks me how I'm doing and I kind of really want to dig in, I'll do a balance sheet as of the 31st of last month, then I'll compare that to the prior three months. Or I may put it at 1231 and compare it to the prior three years, and let's see over time what's going on with cash, what's going on with debt, what's going on with owner's equity. And of course, that's also under the assumption, Jonathan, that I'm looking at a good set of books. As you and I have talked many times, we can take a look at a balance sheet a lot and say, "Something's not right there. There shouldn't be a negative upside down balance in an accounts payable account. That's not right."Joseph:So I like to look at things over time. So hopefully you've got a good set of books that you're looking at and you can look and see what's happened to cash over time. If cash goes up $50,000 a month and equity stays the same and we look down and it's because we've taken $50,000 out in shareholder distributions every single month. That's a good problem to have is cash is increasing, distributions are coming out and we're still increasing our overall position. So I like to look at the comparative and see kind of what's going on and what happens. If I see a big, huge decrease in cash of $25,000 in a given month, I may see, "Oh, look at that. I bought a $25,000 piece of equipment. Well, that makes sense," right? That's not money that went out the door because we spent too much money on overhead. That's a piece of equipment that hopefully is going to increase our bottom line.Joseph:So that's one of my favorite ways to look at a balance sheet is to just compare it to the prior couple of periods and see. And you can look at it, if you wanted to do a quarter by quarter and see what 12 31 looked like, versus 9 30, versus 6 30, versus 3 31, just see how things have progressed over time. Those are the ways that I'm looking at. And I'm also looking at the same stuff that you mentioned, which is looking at the cash position and looking at the liability position and seeing what that looks like. There's a ton of financial statement ratios that are out there. One reason that banks and financial institutions like to look at ratios is it puts everybody on the same level.Joseph:So $900,000 of debt for dental practice is not the same as $900,000 worth of debt for a publicly traded company that's huge like a Walmart or a Google, right? Those are not good indicators, right? If you looked at cash in the bank account, my $100,000 is not comparable to Walmart's $100,000 in their cash account. So that's why banks and a lot of financial institutions look at ratios because we can compare what's the debt to equity? What's the debt to assets? What is the current ratio? What's the quick ratio? All of these different things can basically put everybody account on the same playing field to figure out what kind of cash position they are. So my quick easy one to go on is looking at that current assets divided by current liabilities and making sure that that's more than one. And trying to figure out what's that looking like over time?Joseph:We have clients that start out and for one reason or another they have to take out a practice loan and that practice loan doesn't cover everything that they need. So they've got to look at other forms of debt, whether it's a high interest rate debt or it's a credit card they had to take out in advance on a credit card. We see some of these things that happen over the course of time. What you want to see is as you look back at 2018, 2019, 2020, 2021, 2022, you want to see progress in each one of these things. And if you continue to have an upside down assets versus current assets versus current liabilities, I know that we've got a problem and we've got a problem that we need to fix because we don't have any profitability because if we have profitability, we'd probably be able to pay down some of those debts.Joseph:And certainly a bunch of stuff goes into all of those different pieces. You may be taking too much out in owner's draws are spending too much on CE or any of these other things. And one of the things that you mentioned early, Jonathan, was the concept of all of these financial statements work in conjunction with each other. You can't just look at a balance sheet and know everything there is to know about practice. You can't just look at a P&L and figure out if that's a good office or not. You can't just look at a cashflow statement and say, "Well, that's everything you need to know."Joseph:We were talking before the call, what if they had five huge cases in the month of December that jacked up their P&L, but all five of those cases that came through they were super POd by the time that they left the office and they'll never come back again and we're not going to have those five cases. So there's a ton of different things that you've got to look at and evaluate in the overall health of the practice. I really like the balance sheet because it gives us a point in time. It lets us see what do we own minus what do we owe. And we want to see that number increasing over time.Jonathan:Yeah, I agree. I love the fact that since it is a picture of time, you can look at two different pictures. It's kind of like on Facebook, I look at the pictures of my kids and when I look at them now, I look at the difference that they've had and what changes and things like that, right? It's a fun thing to do to be able to see how they've changed. And the business, hopefully, when you look at the things that have changed they've happened in a good way and they're going to be fun to look at too. So yeah. Definitely look at the balance sheet. And when we do that, I do that for our firm and I do that for a lot of things of comparing it period over period, because like I said, the snapshot in time doesn't really tell you the whole picture. The balance sheet over time will tell you a lot more. So I agree.Jonathan:In terms of the other things, just a really quick thing in terms of when you're looking at cash, a way that I try and take this concept for cash is not only do I like to have more cash than I do short-term liabilities, I also like to have enough cash to equal, at least, one to two times what your breakeven costs are going to be on a monthly basis. And I'll use that. So this is going to be a two-part episode. This is episode 10 of the balance sheet. We'll do episode 11 will be the profit and loss. And so we'll move over to the profit and loss now, but you use the break even point to basically use as a metric to take versus your cash amount, to see how much cash you have to be able to sustain kind of a rainy day fund, so to speak.Jonathan:So I like, at least, a hundred to 200% of your breakeven point being in your business bank account with the caveat of you also need more cash than you have short term liabilities. And so probably honestly, the best thing to do is to have your cash, net cash, which would be your total cash minus your short-term liabilities. That amount should be two times your breakeven point. I think that's a very healthy amount of money to keep in there. Anything extra, then a lot of the times in a single owner dental practice that might get funneled out to the owner and then gets reinvested in other places in their personal lives to be able to help with their wealth building and things like that. So let's talk about the P&L, what do you like about the P&L? What is it that gets you going in the morning whenever you see a really nice P&L?Joseph:Yeah. Good Thought. So the P&L, the profit and loss, the income statement, if we're talking nonprofit, statement of activities, right? There's all these different fancy names for it. But it's basically, are we running a profitable business? Is this business making any money? So I think that there's a couple of different kind of old terms that I've heard kind of mentioned out there. So one of them is that revenue is vanity. Like, "Oh, look at me. I'm a $1.4 million practice. Congratulations. Look at how awesome. Let me pound my chest about my $1.4 million practice." Revenue is vanity and profit is sanity. If you have a $1.4 million top line, Jonathan, but you spend 1.8 a year, that's not a good practice. I'd much rather have a $800,000 practice that spends $400,000, right? So revenue, top line, sales, collections, whatever you want to call your top line, revenue is vanity and profit is sanity.Joseph:So I have a tendency to kind of quickly scan and look at what's top line revenue look like and quickly scan at the bottom and figure out what the bottom line income is. As I'm sure you'll probably be able to tell our listeners like, "If that's just quickly where I'm going, what are some different pieces to that that may not tell me the whole picture if all I do is hop straight to the bottom line in a dental practice?" I mean, the vast majority of our clients and the people we work with for the most part are single owner practices. What's the harm in just looking at top line? Top line's 1.6, bottom line is $10,000 or $50,000 or pick a number. What's missing in that piece of the picture that's not giving them a full picture.Jonathan:So again, I'm probably going to beat this like a dead horse, is that the first thing is that you got to make sure their financial statements are really accurate because if they're not, then you're going to be pounding sand to try and get any actual information off of those things. So to me, the net income or the net taxable income or whatever you want to call it, net profit, whatever it is, it has to be set up in a format that you can understand and quickly pull out information that is discretionary in nature. One of the things that happens super commonly in dental practices is that there's a lot of discretionary expenses. So for example, let's say... Obviously, every person's situation is different, but some people for example take, say, a $290,000 wage.Jonathan:And the reason being is that that's what they think their compensation should be. Maybe it's a percentage of their production, it's a percentage of revenue, maybe it's just a flat amount, but a lot of the times when they have wages of those amounts, when they're paying themselves, has something to do with a 401(k) that's in the practice, so that they can have a profit sharing plan. When the calculation is being done, they get a maximized amount being contributed from their employee and the employer deduction. And then whenever they do the profit sharing amount calculation, they usually get a pretty favorable amount going towards them if they set it up in that way. I've seen dental practices that have came through, they set that up and they are literally spending $150,000 more than they have in profit on the owner's compensation. So the net income says a negative $140,000 in net income because the owner payrolled themselves 290,000.Joseph:Doesn't sound like a net loss to me.Jonathan:Exactly. So that's the danger of doing that is you have to know what's discretionary and what's realistic. If you're really analyzing a business and seeing how profitable is this business, it's a complicated answer because the owner should be compensated, obviously. But if that person taking $290,000 in wages, top line revenue is, say, I don't know, 800,000 and they only produced... I'm not saying only as in it's a bad thing. I'm saying only in terms of the conversation. And they only produce, say 600,000 and they took out almost 50% of their production in wages, not to mention payroll taxes and everything that goes along with that benefits.Jonathan:So that number may not be what... If you had an associate and they were working for you and you had a practice that someone else was working at and they produced 600,000 out of the 800,000 being brought in. Would you pay them $290,000? Probably not. So it's discretionary, right? So what would be more realistic? And if you're paying them a third, you'd be paying them 200,000. And that would cut that $140,000 loss into 60,000. So it all depends on the practice. There's a lot of different things that go into it, but if you're analyzing a practice [inaudible 00:34:12], what I do is when I look at P&Ls I do a head count of seller's discretionary earnings.Jonathan:A lot of people use the term EBITDA in the dental field, which is not really EBITDA because most people never put back in the actual cost of someone to replace the owner. So the correct term of that is seller's discretionary earnings, which basically is you back out whatever was discretionary, which is typically the owner's wages. Is there a family member that's on payroll that is getting 40, $50,000 a year to be an office manager? Are they actually there every day? Are they actually fulfilling all the roles what the office manager would do? Payroll taxes associated with that have to be backed out. Are there any travel expenses for CE, there maybe be more expensive that they wouldn't normally give those same types of reimbursements to an associate to do those types of things with? Are there any types of business entertainment? Are there any types of health insurance that's just for the owner?Jonathan:There's tons of different things that can go into that P&L that will be on the P&L if it's properly being recorded, but needs to be pulled out to be able to compare it to other benchmarks of other practices. So that's another reason why I don't really trust a whole lot of the benchmarks that are out there in the dental field because if I don't have the full faith of every CPA that's out there's financial statements, then how am I supposed to have faith in a study that benchmarks using those financials as their basis point?Joseph:Yeah. And they're all self-reported too, right? [crosstalk 00:35:54] financial statements, they're self-reported.Jonathan:Yeah. So there are generalities and we work with around 250 offices and we see there are just differences in dental practices. So P&L to me is a fantastic thing to look at to have an understanding what's happening. But to me, you have to be financially savvy enough to calculate out that seller's discretionary earnings in order to be able to calculate what the actual profitability of this practice is from a dollars and cents perspective. Once that is done, you would then look at those different key categories, which again, is another area where I find a lot of dental practices financials don't have things properly segmented inside of their financials. So you can't do that. So the presentation of the P&L for dental practices is just as important as the understanding because you and I could look at a financial statement that would come to us and if it's not a really, really well-defined P&L, I mean, we've seen P&Ls that came through that have had 10 expenses on it. And that's all expenses on the P&L. They have nothing else. And this is-Joseph:Wages.Jonathan:Yeah. Wages, payroll taxes is added on that, insurance is on that. They had a consultant probably in wages, they probably did some recruitment that was in wage. It's just all in one big line item. You can't define anything out of that. So presentation is just as important as well. So what about you? What are other things you like to look at on the P&L? Because I could probably talk about this for another two hours.Jonathan:Hey, everybody. Jonathan checking in again here. Just so you know, this episode went really long. This episode is actually a three part episode because there's a lot for us to talk about in these episodes. So make sure you follow up and listen to the following conversations that we'll release over the next couple of weeks. Again, this is a three part episode. This is part one. And we will check in with you on the rest of it going forward. Thanks.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner and you're interested in CPA services head on over to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country. We'd love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty. And we'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:And if you enjoyed today's episode, again, go to the Facebook group. Talk to us about what we've talked about. Join in on the discussion and let's create an environment where we can talk about some of these things, so that we can all help each other get through these things together, so that this adventure of business ownership is more fun, more productive, and better in the longterm. Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Reply with your email address, we'll send you the instructions in the Facebook group. We'll send you the resources when they're available and we will see you next week.

Join the discussion on Facebook!TranscriptJonathan:Hey everybody, Jonathan checking in here. And just so you know, this is a two-part episode. This is the second part of the episode. So if you've not listened to the first part yet, you want to go back and listen to it in the prior weeks. We should have it labeled on the episode title part one is and part two is, so you should be able to listen to that and see that in the title of the episode of this, what episode of episode it is. ThanksJoseph:We have this global pandemic that hits, dental offices are shut down across the globe for a good chunk of March. We would say, "Well, we didn't hit our quarterly goal for Q1 of 2020. Here are the reasons, it's because we were shut down for eight weeks." It was because we did emergency only, and all of a sudden we're able to kind of add some color around what's going on. One of the things that I've noticed is that the first quarter of 2021 has been really, really good for a lot of the practices that we help. Okay, well, what's going on there? Let's add some color to all of those different pieces. So I'd say at a minimum, you need to communicate that stuff quarterly. You, as the business owner, need to be looking at it at least monthly. And then if you've got folks that you can communicate on your team that can help you reach your goals, as frequently as you can looking at those, if that's even weekly or if that's monthly, but I would say at a minimum, you definitely want to look at it monthly. And you need to communicate with your team at least quarterly. At a bare minimum, I'd say twice a year.Jonathan:Yeah. And for our firm what we've done, we have that quarterly meeting. It's not only talking to the employee about the team's goals, it's also talking about the impact of that person on those goals, right? So it's also about accountability at that point. So how big is your capacity? How efficient are you being in getting these things done? How many clients have we had issues with that are underneath your care? For a dental practice, it could be like what you said, it could be, hey, our cancellation rates are still going up. Why are they canceling? Or whatever we implemented last quarter that we talked about in our last quarterly call or last quarterly discussion, apparently that change hasn't helped. It's actually hurt. And let's think about why that is, and think about something we can do to be able to make it work better going forward.Jonathan:And I know if you're a dentist listening to this, you probably have a team check-in. A lot of practices have a team check in every morning before the day gets going. I think that's fantastic to have that so you can be ready for the day. Systems are ready, hygiene's ready, office is ready, things like that. That's not the meeting we're talking about. We're talking about one-on-one, you're talking to that employee about where you're wanting that employee to progress to as a person, as a member of your team, as a member of the business and how they're accomplishing those goals and things like that.Jonathan:So yeah, I think that's a really logical way to do it. And the way that we did it was, we also did a weekly talk with the leaders and we said, "Hey, we're going to start at a weekly." And we have a tax team and we have an accounting team and we have an operations team. And we said, "Hey, everybody's going to do it weekly in the beginning." And if we find that, I think we started with, say it was going to be a 45 minute call every time, we said, "If we get in there and we've realized we don't need to be on a call for 45 minutes then we can change that to once every other week or we can change it to a 20 minute call." It's easy to decrease it once you start, but you've got to start and you've got to do it in order to be able to move forward.Jonathan:And another good tip I'm going to talk to you about, in terms of the finding the time to do these types of things, the best way to find time to do these types of things is to put it on your calendar and stick to it. I mean, that's it. I mean, I know it's hard to say, well, I didn't want to stay that extra 30 minutes that day, or I didn't want to take a 30 minute lunch or I didn't want to have to take a 15 minute lunch when I usually take a 30 minute one, or I didn't want to have to pay for the meal for the office, but I did, or for this person... That can be done. You can do those types of things. You can be creative with your time. If you search for the time, you will find it.Jonathan:Now the bigger your team you have, the harder this will be. If you're trying to find a 30 minute window or an hour long window for a hundred people, yeah, that's going to be tough to do. If it's five to seven, that's four days out of the year, four eight hour days if you have eight employees, if you're doing an hour at a time. Which, most of these things, they don't always take an hour. Sometimes if you have a lot of brainstorming going on with it, it might have that as well. But maybe that could be something that you do as a part of your team, and having the brainstorming piece of it and the way it goes too.Jonathan:So what else is there that people need to know in terms of how you approach these meetings, these quarterly meetings and do that accountability piece of it? Because like you mentioned at the beginning, we're in this world where we don't really like to be confrontational. We don't like to point out things that are wrong. Most of us like to build people up rather than tear them down. And we may be having blunt conversations, but the purpose is not to build down, its purpose is actually to build them up. It's just, you're building them up in a way that feels odd sometimes. So talk us through that.Joseph:Sure. Well, one of the things that, whenever I have brand new leaders that I'm talking to, or new managers or people that have kind of gotten thrust into this role of being in a supervisory position, which I'm sure many of our listeners will find themselves kind of all of a sudden thrust into this place, a really good book that's a quick read if you haven't read it is the One Minute Manager by Ken Blanchard and Spencer Johnson. So have you read that book, Jonathan, the One Minute Manager, did you ever read that?Jonathan:I have. It was about seven years ago? Yes, I read it.Joseph:Yeah. So one of the things that they talk about in the One Minute Manager is getting a chance to catch people doing things right, and then address things and issues as they can. They [inaudible 00:06:16] little one minute meetings or whatever. So I'd encourage you to go pick up that book. So whenever we're talking about quarterly performance reviews or annual performance reviews, one of the things that I want to make sure that we're clear about is, that's not the time for you to air all of your grievances out with your people. Like, I've saved up all of this bad stuff for you and now I'm going to sit down, you have no idea what to expect, and I'm just going to just lay into you about all of the times where you screwed up Ms. Johnson's stuff, and Mr. Jones was in and you were rude to him and all this stuff.Joseph:So one of the things that I tell leaders is that there should be no surprises in your annual performance review. It should be a review of all of the things that we've talked about throughout the course of the year. It should be a review of all the things that we addressed and the changes that we made and the things that we fixed. So I would encourage you to address things as you see them come up, do it in a respectful way. If you need just kind of a playbook, the One Minute Manager, again, is just a quick read to kind of help you do that and kind of get a little bit of a playbook in order to do that.Joseph:But don't let the only time that you ever give anybody any feedback whatsoever is the annual performance review where you just lay into them. You'll have people that are just not happy with you or they're upset, and then they'll want to go work somewhere else. So it should be a review of all the things that we've talked about all year long. It should be a review of whatever, if you have specific metrics that you want to hit for your hygiene staff or for your front office staff for their collection rates, or our zero to 30 needs to be what percent versus 90 to 120 on our AR or our denial rate needs to be X... Look at all of those different metrics throughout the course of the year and update them quarterly on those. And then you can just review all the stuff that goes on.Joseph:And it's also a really good opportunity for your employees to tell you something that you may not do or may not have thought about. One question I used to add to performance reviews that I did whenever I was leading a large staff, is what unique skill or talent do you have that we're not utilizing? What is it that you wish that I knew that you can do that can help the practice? And they may say, "You know what? I'm really good at calming down upset patients," or somebody may come and say, "You know what? I really like helping children feel more comfortable in the office. You know what I've really thought about, is I really thought we should do X, Y, and Z."Joseph:One of the things in my CFO position that came out of one of these conversations just like that was, we had some logoed teddy bears made. And anytime we would have a child that came in and that child was really upset because they're being fit for this orthotic device, we said, "You know what? Here's your teddy bear." And it's not about the marketing and that kind of thing, here was just this little simple, easy thing that we did. And that all came out of an annual performance review. When I said, "What do you guys think we should be doing?" Somebody said, "What about doing some logoed teddy bears?" And I was like, "I've never thought about that before." Pretty low barrier to entry, it's going to cost us however much it's going to cost us. If we try it and it flops, it flops. And they ended up being this great thing that just was born out of having open conversations with your team and talking about goals.Jonathan:Yeah. It gets really easy as a business owner to get lost in your own head about all the different things that you could or could not be doing whenever there's a... You have a whole team of people that are in the same business that you are, and they have ideas too. They understand a lot of the things that you may get lost in at some point in time. So having these conversations can be difficult, but they can provide a lot more value on your end as the owner than you probably think. If we were to pull up some statistics about training cost and turnover costs per employee, like average amount of time, it takes to get someone trained inside of any type of business, the cost would be really, really, really, really large, not to mention the effectiveness per employee that are likely going to be happening inside of your practice.Jonathan:So I'm not even talking about those things. I'm talking about just having other people that are bought into the success of your business than yourself, which these conversations can hopefully influence that. As a business owner, you are typically the person that is on the largest hook for success or failure, but you can have people that will buy in with you in some ways and carry that cross and that burden with you. So having these crucial conversations, approaching someone who always has excuses about something, or they're just not getting the insurance checks processed fast enough, or they're just not turning into patients over fast enough or whatever it is, having those types of conversations with people are not fun.Jonathan:When we're talking about uncomfortable conversations, that's the type of conversations that aren't fun, because you're talking to these people about the things that they're doing every day, and you're having to come to them and say, "Look, I heard you answering the phone the other day, and my gosh, if I were the one that were calling this office, I probably wouldn't have wanted to book an appointment either, because you were kind of mean to that person. I don't know if you carried something in bad with you that day or what," but that's the type of thing that you've got to, as a business owner, you've got to talk to people about. And this would be something that, like you said, that wouldn't be something that would be in the quarterly discussion, that'd be something that would be done if you heard it, you needed to probably address it fairly shortly after.Jonathan:And then these quarterly performance things, having those discussions can be difficult. The difficult part is if they are not reaching what you set out for them, I guess. And we probably need to stop it at there, because I think that we could probably dovetail this into a very big conversation about how to set a proper team goal, and how to set proper goals on the individual level. And then have that come back to this episode about how you actually address those things and help coach those people through those things as the year goes by. Because like you said, one of the problems is the time management of like, if I've told my hygienist she needs to be able to cut down the amount of time it takes her [inaudible 00:12:44] being from an hour long visit to a 15 minute visit, it can sometimes be difficult, or I'm sure it's difficult to try, and if they're only able to do an hour still going forward to be able to coach them and to be able to get that to have that turnaround time be a little bit faster in some ways. And you, as the dentist, may not have the answers to that, but you may be able to find consultants or people or some type of resources that can help with those types of things.Jonathan:And so yeah, so again, this is a very big discussion. I'm going to try and pull it back into the talking about in the quarterlies, you go in, it's no surprises there. This is not a gripe session. This is a, how do we constructively build you up and how you fit into the overall team goal? So let me ask you this. If you have an employee that is not reaching those milestones or is not doing the things that you would expect of someone who is actively engaged in this mission of the company, how would you address that? Like, what if you had this assistant that just, they probably didn't care that much. It didn't seem like they were really trying a whole lot to get those patients to learn the procedures that you're trying to do on your patients so that you can be more efficient and do it better for the patients. Like, what do you say to someone that is in that situation that just doesn't seem to get it, or just doesn't seem to want to be a part of it? How do you address that topic for conversation and is this the appropriate time to do it in a quarterly conversation?Joseph:Yeah. Good question. I think that there's a lot of different pieces that are into the answer of what you're asking. How do we make an uncomfortable conversation comfortable? How do we actually get to dialogue? At what point do we get to the tipping scale that this is a coaching issue versus not a coaching issue? That's one of the things that I'm constantly asking myself, as you get a chance to lead people, as you find issues that come up is, is this a coaching issue? At some point you have a scale tip that this is not a coaching issue, that this is just the wrong person in the wrong seat on the bus, right? Go back to some Jim Collins stuff about getting the right people on the bus, the wrong people off the bus, the right people in the right seat, and then determine where the bus is going.Joseph:So there's quite a bit to be said about a lot of different ways to approach kind of this confrontation. You want to create an environment... Like at the end of the day, what do we want? We want dialogue. We want to have a conversation. If people are scared, if they're intimidated, if it's not a good way that you've approached them, they're going to go to their fight or flight mentality. And there's a ton of stuff that's written about all of this stuff that's out there kind of in the business books world. Because if they're in the fight or flight mentality, and they think that they're about to get fired, or they're really, really ready to just pick a fight with you about this and argue with you until you're blue in the face, their brain is not working on a deep human level, right? It's called the lizard brain, is what they're doing. And what we really want to do is we want to get to dialogue. We want to understand if it's a coaching issue.Joseph:Maybe a tools issue. Like, you and I were talking the other day about the tools that we have for our team. And do we have the right tools in place to ask them to perform at a high level, yes or no? Okay, well maybe, but let's investigate it. Let's further look into that. So is it a tools issue? Is your hygienists going to come back to you and say, "Well, I can't get it from 60 minutes to 50 minutes because I've got this tool that fails on me about 10% of the time. And that's why this always happens this way." Okay. Well, that's a pretty simple fix. Like let's just get a better tool. Like what is the tool that we need? And then all of a sudden that fixes that, because if you don't get to a place of dialogue, that's when people get really, really upset and they either go to silence or violence, right? They either totally shut down, they're not listening, or they're going to go to violence and they're going to erupt and say, "Well, you're just such a cheap old dentist anyway. I don't even have the tools I need..." They're going to go to silence or violence. So the goal with all of this stuff is we want to get to dialogue.Joseph:And then at the end of the day, as a business owner, you've got to choose whether or not this is a coaching issue or not. If it's a coaching issue, we want to help people get to where they want to be. Nobody shows up to work to do a bad job. That's not why they show up. They don't show up to work to steal money from people. Like, I just can't wait to go be a crook and take people's money from them. Nobody does that.Jonathan:Hopefully no one in your office does that.Joseph:Yeah, that's right. Yeah. They show up to work because they want to help people. They want to do a good job. So how do we get from where we're at to where we want to go, and we want to be able to create some dialogue. I think that that's probably the biggest thing. And that's very, very challenging, especially if you don't like confrontation, especially if you've not ever led people. I had a good friend of mine that was a kind of consultant for me for a while. And he would talk about getting comfortable being uncomfortable, because it is uncomfortable whenever you've got to approach different stuff, or you've got to address different stuff. It's very uncomfortable. But as a leader, you've got to get comfortable being uncomfortable. You got to get to a place where you can have dialogue with your people. And you're not going to do that if they go straight to silence or violence, to use some verbiage from a program called crucial conversations, which is really, really good, by the way,Jonathan:I wonder if these quarterly meetings were called dialogue meetings, if that would help spur... This is when we talk about these issues. I mean, I think the traction book has, it talks about having just a list of issues. And we did that for a while as a company too, is we just say, "Hey, if you have any issues, put them on this tab of the spreadsheet." And every year, we're going to go through all these issues on the annual thing. And there were things that were issues that we need to address at some point, maybe they're not urgent to talk about right now, but they're issues. And let's talk through them and let's have this be a part of this meeting.Jonathan:And that's what we did for a few hours as a team, is we'd address all these issues that were coming up. And it was never that, Kathy's a meany head, it was that this software was really slow compared to the other softwares or computers were getting outdated or just things like that that would need to be addressed, but wouldn't need to be addressed right then and there. So I wonder if these were called dialogue meetings, if you could set those expectations. Because like I said, whenever you're talking to these people, or whenever you bring these issues up, it's really hard just to have it be a part of the year and it not just sound like a bitching and moaning. If you talk to somebody about these things during the day, and you're like, "Man, Nancy, you took way too long doing your insurance," all that is is you complaining at that point. But if you're having a dialogue of like, "Let's talk about how we can maybe have our insurance verification be faster in the day so you don't have to be working overtime," or something like that, you know?Jonathan:Having those be pre-set allows you, number one, to not have those issues bog up your day, every day. It also allows the employees to have a path to discuss those things with you as an employee. And sometimes people aren't perfect and they may have dialogues and issues that aren't really big issues, but at least you can hear them and consider them and you may be surprised. You may not think it's a big issue, and then after it's been communicated to you, you may start noticing that issue. Like, "Oh, that is an issue. I didn't think it was, but it is." And then you can start to address it and things like that. So really important to have that dialogue in those quarterly things. So is there anything else that you wanted to discuss in conclusion? I think this is going to be another two-part episode, episodes eight and nine of the Tooth & Coin podcast. Is there anything else that you feel like we need to address that we haven't, in terms of the communication in those quarterly meetings where you're talking to the team members about their progress, the team's progress and the team's goals, and then how that person's influencing it and how they're doing in reaching those things?Joseph:I think one thing that I would just kind of conclude with is something that one of our leadership coaches told us, and that's that it's worth it. It's worth it. This may sound overwhelming. This may sound uncomfortable. You may get to a spot where you're addressing things and it's uncomfortable, but at the end of the day, it's worth it. Is it worth it to make sure that everybody's rowing in the rowboat in the same direction? Yeah, of course it is. Is it worth it for our practice to meet our goals? Yeah, it's worth it. How do we get there? Part of it is having conversations with our team. So as you listen to this and as you get a chance to kind of reflect and see how it fits into your practice and your style of management ownership, just know that it's worth it. We get the privilege to lead a staff, to lead a team. We get the privilege to help people every day about what it is that we do. And getting that firing on all cylinders, it's worth it.Jonathan:Absolutely. All right, guys. So we're going to call that a double episode of leadership. And if you want to continue the conversation, go over to the Facebook group, by typing in Tooth & Coin podcast into the search bar and you'll be able to find the group, be able to join there. Come talk to us about times that you've had some of these conversations with people. Talk about what's worked for your office, what's not worked for your office. Any hacks that you have and ways to be able to make leadership inside of your practice better. Has this worked to engage our employees? Has it not worked to engage your employees? Why or why not? Different things you could talk about, it'll be really interesting to have you in the group. Until next time, bye.Joseph:Bye guys.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth & Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country, and would love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up or has become an owner in the past five years. That is our specialty. And we'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:And if you enjoy today's episode, again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the longterm. Lastly, if you want access to those resources that we are currently building, just text the word tooth and coin to 33444. That's tooth and coin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444. Reply with your email address, we'll send you instructions on the Facebook group, we'll send you the resources when they're available and we will see you next week.

Join the discussion on Facebook!TranscriptJonathan:Welcome to the Tooth and Coin Podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific, but we hope that these episodes help you along with your journey. Now a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is, if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists, that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share, join us in the Facebook group. If you go to Facebook, and you search for Tooth and Coin podcast, click on it to join it, and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering in around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that whenever it becomes ready, all you have to do is text the word toothandcoin T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address, and we'll email you instructions on how to get into the Facebook group, as well as add you to the list, to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well.Jonathan:So on to today's episode. I hope you enjoy it.Jonathan:Hello, ambitious dentist. Welcome back to the Tooth and Coin podcast. In today's episode, we're going to be talking about a leadership topic that is one that is just not really talked about very often. And that is how to keep your team engaged when trying to reach the goals that your practice has set. You want to make this seem like some really big, fun, exciting, giant topic, and it is fun and exciting, but at the end of the day, it comes down to engaging with your employees and communicating to your employees and having a feedback between yourself and your employees, so that you can tell them how they're progressing and keeping them engaged with the goals that you've set as a business, as a practice, so that you can actually move forward as a team, keep everybody rowing in the right direction, so to speak.Jonathan:So I'm going to be interviewing Joseph about this topic. Joseph is the leadership guru in our company. So I'm going to be asking him the questions, and he's going to be helping us out with this. So Joseph, let's start with that. Let's start with, number one, why is it important for us to be having these discussions with our employees, and how does that typically look in terms of how these communications are set up?Joseph:Yeah, great question. So I think that, in general, one of the things that is difficult in leadership is to give constant, sincere, appropriate feedback to your team. And one of the things is, as human beings, we just don't like to engage in anything that might be challenging. There's a very small fraction of the population that likes to fight, but that's far and few between. And by the time we're professionals, especially practicing at this level, especially getting a chance to engage and have a team of five or 10 or 20 or however big your practice is and the number of team members, we just like to avoid confrontation. And it feels like anytime that we've got to address anything with our team, it's going to be confrontational in nature.Joseph:And I would say that, while some things are confrontational and may not be the best thing, if you do it in the right way, it can help you achieve your goals as a practice. It can help you achieve your goals as a team member because one of the things that they've found, as they've studied employees and employee engagement, is that a lot of people, when they're disengaged at work, they're a fraction of the way productive as they would be if they were fully engaged. And if you poll your employees, one of the things that they would say is I get no feedback.Joseph:I think the cliche word that we use all the time in our society now is communication. Well, we just don't have good communication at our office. Well, if you look at why don't you like your boss? Well, we just don't communicate very well and that kind of thing. So I think that that's kind of the framework to start from is your team members want feedback. They need feedback. And if you avoid that because you're afraid that it's going to be uncomfortable, what that will eventually lead to is that will eventually lead to employees and team members that are disengaged, they're burnt out, and the big question, mark, Jonathan, is that they're left guessing, how am I doing? Am I doing okay? Am I not doing okay? How is the team doing? How are we progressing in our goals? And they're left to guess.Joseph:And there certainly are lots of people that, whenever they start playing the guessing game, they're very positive, optimistic, and they say, "Well, I haven't heard anything, so no news is good news." And then there's a percentage of people that say, "Oh my goodness, I haven't heard anything. That must mean that they don't like me and that I'm not doing a good job. Well, if I'm not doing a good job, that means that the practice isn't doing well, so that means we're probably going to go bankrupt. And I saw that thing the other day that made me think that the practice is getting ready to close, and we're all about to get fired." And then they start making up all these stories in their head because they just don't know.Joseph:So one of the things that we're going to talk through here is to just give you some tools and some things to think about in terms of how do we keep employees engaged, how do we keep them motivated, and how do we create consistent, constant feedback that is respectful? I would not ever encourage you to be disrespectful with your teammates and the team that you're leading, that you get the privilege to lead. I think that's one of the things we lose a lot is this concept of it's a privilege to lead people and to lead an organization. So I mean, what are some of your thoughts, kind of whenever we kind of bounce some of those things out?Jonathan:Yeah. So you did a really good job of outlining, and I mean, to me, there's a big problem that's as a part of all of this and, number one, I think the root of the problem is that employee engagement and any type of engagement in today's society is really hard to become active. It's hard to actively engage with other people and from a lot of different elements. And I could probably go down a rabbit trail of talking about social media and people's attention being numbed and all these other things that are out there.Jonathan:But at the end of the day, what we're talking about is employee engagement, and if you think about the fact that a lot of dental practices face a very real problem, which is turnover, I really wonder, if they had really effective leadership in all of these practices, if turnover would be helped a bit. And the way that you get about doing that seems to me to be have actively engaged employees that enjoy their job, enjoy what they're doing, and one of the ways to do that is keep them engaged and have them have some type of sense of accomplishment and have some sense of purpose inside of their position.Jonathan:I can already hear kind of the counterpoints to this in my head, which is, well, none of my employees want to be engaged. We just can't find those types of employees and things like that. And there's a real chicken and egg question that comes in there, as what comes first, the leadership or the engagement? And then it could also just be is it an issue in the hiring process and things like that. So for purposes of this discussion, we're going to assume that you have a strong hiring process to where you've weeded out the people that don't want to be actively engaged, and so if you feel like you're in an office that doesn't have those types of employees, just hear us out. You're still going to learn a lot about this process and ways to go about this.Jonathan:So this is something that I have struggled with, and we have great employees at our company, at Tooth & Coin. And that's because I am not, we're probably going to beat this word to death today, me not being a very engaging person on a lot of senses is we have to actively work at this. And this is something that we've been intentional about over the last 12 to 18 months at Tooth & Coin is trying to have more of these types of discussions amongst leadership, as well as with employees, about what it is we're planning on doing.Jonathan:So let's start with how do you set some type of a goal for the whole team to be a part of, and then how do you check in with it? And if you want to talk about how we did, or if you want to talk about the best ways to do it, go ahead.Joseph:Sure. Well, I think that a lot of things in leadership and a lot of things, when we talk about goal setting, they need to have some sort of a why behind it. So at the end of the day, the audience that's listening to this probably, probably work in a for-profit business. So we could say, at a high level, that we need to just set goals that make sure that we are ultra profitable, that we maximize our profitability, and we maximize the amount of cash that we take home. I can also make an argument that says that nonprofit organizations have to run at a operating surplus rather than deficit, no margin, no mission, something that I've heard before. So I think that that is certainly part of it.Joseph:So as I just gave you a kind of a buzz phrase that I learned a couple of years ago, no margin, no mission, if we're running a net operating loss, then we're not going to be able to pay our people, and we're not going to be able to pay them well. We're not going to be able to invest in IT upgrades, or we're not going to be able to invest in clinical upgrades or clinical staff or continuing education and those kinds of things. So if we're not profitable, at the end of the day, we're not going to be able to do the bigger thing that we all decided to get into this business for, and that's that we want to help people. You want to help people with your very specific skillset that you paid quite a bit of money to obtain that skill set. At the end of the day, we want to help people and help people feel better about themselves, about their smile, about their level of self confidence, even if it's a pain thing, help them get through these specific pains.Joseph:I mean, I have some root canals done several years ago. I think I told you that story. I was in pain, and I was so thankful that the dentist was able to perform these two root canals for me. It cost a fortune, right? Because dentistry is expensive. It cost a fortune at the time. But at that point in time, I was able to get help from these folks. So I think that a couple of things, whenever we're talking about goal setting, I think it needs to fit into those two different pieces. How do we continue to remain profitable so that we can do the things that we want to do inside the office clinically, so that me, as a business owner, I'm able to get a return on my investment, my time, energy, and effort, how do I support my family?Joseph:But it's also got to boil back down to the why behind what it is. So if we were to poll our audience, and we were to say, is the reason that you want people coming in for six-month hygiene checks, is the only reason for profit? No. There's a big, huge benefit that comes with having your teeth examined and clean and having a hygiene visit. We can identify problems earlier. We can help people sooner. We can eliminate a lot of this stuff on down the road. So I think that, when we look at the things that are most important, it does certainly have to do with profitability, but that can't be the only thing. That can't be the only reason that it is that we're doing what we're doing is for profit and for bottom line.Joseph:But that's important. I can't underestimate the importance of that. And again, no margin, no mission. We could go run a volunteer clinic and not pay anybody anything and do all of that stuff, and then how would you feed your family? How would your team members feed their family? So we've got to have some sort of a profit motive, but we've got to also focus it back to the why. So we're going to have these goals. They may be subjective in nature. They may be objective in nature.Joseph:So my dad works in retail and has run retail stores his whole professional career. One of the things that's a metric or a goal that they have is a customer service score. So let's boil down to a customer service score and net promoter score or your Google reviews or any of these other things that come out as part of running a dental practice. Why is it that we want to have good customer service scores? Well, there's a couple of reasons, right? If you have an unsatisfied customer, they're not going to come back. So that's the financial reason, right? But at the end of the day, do we really want to run a business that people are mad at us and think that we're just taking their money from them and not helping them? That doesn't factor into the why that we became dentists or CPAs or to run a retail store.Jonathan:You got to get that patient engagement, right? We got to move the engagement away from the employee, as well as have it be to the patient because it's hard. I mean, it's easy for the dentist to make an engagement with the patient. It's sometimes hard for the dentist or the owner to make sure that the employee engages with that person as well and has a reason to do that.Jonathan:And we've talked about social good being tied into being a business, in a prior episode, and I love that. And I can think of almost no better types of businesses to have social goods associated with their business, other than medical. Now, sometimes social goods can be a bit divisive in some ways, and some people may like one social good or another social good, but most people, in general, are going to be happy to be a part of something that is doing that.Jonathan:So, yeah, I completely completely agree with that. So let's assume that you've got your goal that you've decided to make, and we can probably do a whole episode on setting goals as well. And let's talk about now how we are going to engage with those employees, to make sure that that goal is not being forgotten about and that the engagement continues on because this is something that I had ... I think, Joseph, you may have ... I think it was you actually. You, at one point, said to me, "What is it that we're doing here every day? Because I know we're doing CPA services at Tooth & Coin, but why are we doing what we're doing?Jonathan:And it was one of those things that it was in my head, I'd talked about it in the past, and it had just been so long since I'd brought it out at a meeting or talked about it or whatever it was is that people had forgotten about it. And even though it was the same people, that we didn't have staff turnover, it was just one of those things. It was just it had to be re-communicated, over and over and over again. So, Joseph, how do you do that? How does someone do a better job of keeping that goal in the front of people's minds and helping people along the way of reaching that goal?Joseph:Sure. I remember when I was a kid, and I was learning different stuff about spelling and all the different facts and stuff, and my mom made flashcards so that she could help me study all this stuff. And one of the things that always stuck with me is that repetition strengthens and confirms. So I think, first and foremost, is we've got to remind people why we're here. So I don't know that that needs to be something that we plaster all over the wall and the website, which those things are fine, well, and good, and I would encourage you to think about all those different things. What's the mission of the business? What's the vision of what we're trying to do, the mission of the practice? Maybe it's to create healthy smiles.Joseph:I live in the Dallas/Fort Worth area, and there are a number of kind of the big, corporate people that are out there. And there's one corporate group that is out to make sexy teeth, and there's another one, I will make you have a sexy smile or whatever. That's a big part of their marketing push. Right, wrong, or indifferent, I'm not here to judge that. It stuck with me, so it's got some stickiness in there, effectiveness. There's another company in town that says, "We make healthy teeth." Healthy teeth first, before we make them sexy, is kind of the innuendo.Joseph:So I think when we go back to repetition strengthens and confirms, so back to your back to your illustration, if one of the things that we're trying to do as a firm is we want to be their CPA from the time that they get into practice ownership until the time that they retire, if we wrote that down one time and said that at one meeting, two years ago, that is out of sight, out of mind. So at whatever point it becomes relevant, whenever it's timely, whenever it is appropriate, we need to be reminding people of what it is that we're here to do.Joseph:Now, it's not every morning that we stand and do the pledge of allegiance, and we sit and make a pledge to the vision and mission statement, straight out of Office Space or something like that, right? It's not about that. It's about just getting a chance to remind people why we're here. So annual company meetings are a good time to do that. There are a lot of offices that have a holiday party, where there's a couple of speeches and that kind of thing, and then quarterly is another time that people can do it and kind of remind people of why it is that we're here.Joseph:Because it's really easy, whenever you're sitting in the weeds, and you're just work, work, work, and you're getting through, and you've got the patient call list, and you're collecting on the AR, and you're trying to get Ms. Jones scheduled, and we're trying to verify insurance, and we're trying to get a case acceptance rate, and we're trying to get call backs, there's all this stuff, and sometimes, we get so busy in the weeds that we forget to take a larger picture view. So I would say, first and foremost, repetition strengthens and confirms. It's important that we continue to do that in a way that is sincere and appropriate. I think that's kind of first and foremost. What are your thoughts on that? I pledge allegiance to Tooth & Coin, the CPA firm, who's going to be awesome for the time that we're all here.Jonathan:Yeah, so that's, if I had my way, we ... And honestly, it's funny because I joke about it, but I can see now why they do it. So when you're in college, in business, you learn about all of these different cultures of business, and I think Japan actually does that in a lot of their businesses. The lifestyle of person who works in a lot of Japanese businesses is that they do pledge of allegiance to their company. They thank their company, every day, for letting their lives be a part of that, and they work insane hours. In Japan, I think there's actual places where you can rent out a place to take a nap, just so you don't have to go home, and you can keep working.Jonathan:So that's the more dramatic version of it, but yeah. And this is something that I still struggle with because I'm not, I don't know, a fluffy kind of guy, in terms of how I talk to people. I'm not big on talking about feelings, or I don't even have ... I'll just do spirit hands. I don't know how else to say it. So communicating things that are big picture about how we want to help our dentist not have to worry about the tax world, even though it can be really scary, and we know that our dental clients don't know a whole lot about it. We want to be that strong arm that helps them through those pieces, to where they're comfortable knowing they're not going to be ever spending in their taxes. They know it's going to be well-prepared and taken care of. And I want them to be able to understand how their business is doing. And I can say those things on a podcast when I'm talking to the people that are performing those services.Jonathan:Sometimes, if you say that same thing, over and over and over again, me, personally, I get the fear that I'm going to be almost saying that what they're ... I'm trying to convince them that what they are doing is what they were doing, and if I say it too many times, I'm going to be shoving it down their throats too much. And even though we have such a great team here that I know that's not an issue, the communication of that is important because it's really easy to lose the trees from the forest whenever you're trying to figure out where you're going in this path and this way.Jonathan:So for the dental clients out there, the dentists that are out there that have set this goal, they've shared it with their team, I mean, what is the frequency? How often do you say this? I mean, I think that we've set up a system where we have an annual, we have a whole day annual meeting, and then we have quarterly check-ins. We have annual calibrations with our teammates. We have a weekly check-in with your leadership person. What type of frequency would you think is right? I mean, is there a universal one, or is it more dependent on style and communication and personalities and things like that? Or what are your thoughts on that, on a broad level?Joseph:Sure. Well, I'm sure some people are sitting and listening, thinking, man, that sounds all well and good, Jonathan, but I just don't have the time. Like you said this, and you say all this stuff. And that's great, if I had 36 hours in the day, but I've only got 24 hours in the day. I've only got X amount of days that I'm chairside, and how much time am I going to spend kind of having the CEO day or having the CEO half-day or even doing that after hours. I don't have time for all of this. So I guess, first and foremost, my encouragement would be that you've got to start somewhere. So if I come out and say that this needs to happen daily, weekly, quarterly, if you hear Jonathan say, "Well, you need to check in with your team weekly," and you have never done a check-in with your team before, that would probably sound very overwhelming and very onerous. And then you would just kind of get discouraged and decide, I don't have time for that.Joseph:So first and foremost, I would say we need to get started. You're going to have some place to start. So there certainly is, and I'm telling my team all this, all the time, is there are lots of different things that I would call best practice. And then there kind of ends up where reality is going to set and going to be. So I can give you lots of different things. I think that just at a bare minimum, you've got to sit down with your team and talk to them individually at least annually, at bare minimum, no matter what happens. If it's been years since you've done a performance review with any of your team, now's the time. We need to have an annual performance review.Joseph:And there's lots of different stuff. We could probably spend two or three episodes on how to structure a performance review. But there's a lot of different things that are in there, so going back to the company goals, if we've got practice goals, I would say, as far as frequency goes, I think that you run the risk of, in December or January, you sit down, and you make these company goals, these team goals, these practice goals, and then you don't tell anybody, all year long, how we're doing on those goals. And then all of the sudden, it comes December time, you get the email from your CPA that says, "Hey, if you have any year-end payrolls, now's the time." And you sit, and you scramble, and you say, "Oh man, I want to get that tax deduction this year, so I'm going to run a bonus." And then you just randomly give people a bonus, and it's $500, $1000, $100, and they have no idea, where did that number come from? How did you get to that number?Joseph:And be like, "Oh, yeah. Well, we had a great year this year, so here's your $1000 or $500 or whatever it is." And essentially, what we've done, and I grew up playing sports, and I know you did too, Jonathan, is we've asked people to go out and compete and play really, really hard, and we never showed them the scoreboard. Not one time did we say, "Here's how we're doing." We just said, blindly, at the end of the year, January, December, whenever it is that you pay your, quote, year-end bonus out, or you look at those company goals like, oh, we either hit them or we didn't. And we've asked them to play their hearts out and give them everything that they got with no scoreboard.Joseph:And I think that that's providing your employees a disservice, your team members a disservice. So my recommendation, my best practice is to definitely give your team an update on how you're doing on your goals quarterly, and at a minimum, they need to hear from you twice a year. Because at least twice a year, we can have an idea, and we can recalibrate, and we can say, "Okay, well, we've noticed that the cancellation rate is higher than what our goal was, that more people are canceling and not showing up, and we're having a bunch of empty chair time." If you're only waiting and looking at that once a year, then you don't have any time to pivot or to adjust or to come up with different ways to have your team help you problem solve those things.Joseph:So my recommendation is to at least give your team a quarterly update. I know that that's something that we, as a firm, have implemented this year is to kind of do a quarterly update on how we're doing on the different team goals that we've set and practice goals that we've set. So that would be what I would call best practice. You can certainly do it monthly. I think as the owner of the practice, if you have a practice manager, an office manager, or somebody that's helping you do that, look at those things monthly. If it makes sense, and you're looking at patient count stuff, that's certainly something you can look at weekly like, that we're talking about big team goals, things that people can really wrap their arms around and understand, you need to be communicating quarterly with your team how we're doing on the team goals, and what are we're seeing?Joseph:So if you were to come out and have practice goals that you set in January of 2020, we have this global pandemic that hits, dental offices are shut down across the globe for a good chunk of March, we would say, "Well, we didn't hit our quarterly goal for Q1 of 2020. Here are the reasons. It's because we were shut down for eight weeks. It was because we did emergency only." And all of the sudden, we're able to kind of add some color around what's going on. One of the things that I've noticed is that the first quarter of 2021 has been really, really good for a lot of the practices that we help. Okay, well, what's going on there? Let's add some color to all of those different pieces.Joseph:So I'd say, at a minimum, you need to communicate that stuff quarterly. You, as the business owner, need to be looking at it at least monthly. And then if you've got folks that you can communicate on your team, that can help you reach your goals, as frequently as you can, looking at those, if that's even weekly or if that's monthly. But I would say, at a minimum, you definitely want to look at it monthly, and you need to communicate with your team at least quarterly. At a bare minimum, I'd say twice a year.Jonathan:Hey, everybody. Jonathan, checking in really quick here. This episode got a little long, so we cut it into multiple pieces. This is episode one. You can find episode two next week or in the following weeks. So make sure that, if you listen to this episode, you listen to the other episode as well, so you have the full context around everything that's going on. Thanks for tuning in, and we will see you next time.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth & Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country and would love to be able to have the discussion about how we could help your new practice.Jonathan:We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services, with your tax and accounting services.Jonathan:And if you enjoyed today's episode, again, go to the Facebook group, talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together, so that this adventure of business ownership is more fun, more productive, and better in the longterm.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces, T-O-O-T-H-A-N-D-C-O-I-N, to 33444. Reply with your email address, and we'll send you an instruction to the Facebook group. We'll send you the resources when they're available. And we will see you next week.

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth and Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take, so that you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific, but we hope that these episodes help you along with your journey.Jonathan:Now, a very important piece for you to understand is that, this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs, talking about informational and educational content, to help you along with your journey. A very important piece for you to understand.Jonathan:Another thing that you need to know is, if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists, that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share? Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coined podcast, click on it to join it, and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that, whenever it becomes ready, all you have to do is text the word Tooth and Coin, T-O-O-T-H, A-N-D, C-O-I-N to 333444. Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address, and we'll email you instructions on how to get into the Facebook group, as well as add you to the list, to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well.Jonathan:So, on to today's episode, I hope you enjoy it.Jonathan:Hello, ambitious dentists, welcome to Episode Six of the Tooth and Coin podcast. In this episode, we're going to be talking about a decision you're going to have to make, many times throughout your career. And it's one that almost no one talks about and almost no one thinks about, until that moment in time happens for you. This decision is, how are you going to treat someone who is working for you? Are you going to treat them as an employee or, are you going to treat them as an independent contractor? And the way that you pay them, matters. There are consequences to doing it the wrong way. And it's a little bit tricky.Jonathan:There's a lot of, I don't know, social norms or just industry standards that people seem to follow, but don't really know why. And in this episode, we're going to be talking about four different types of instances, of this. We're going to talk about this on a broad level. We're going to talk about it as, if you have an associate doctor in your office, we're going to be talking about it. If you have a specialist in your office, and finally, we're going to be talking about it if you have a hygienist in your office, and you're considering doing this in a certain way. And it's a big problem, because if you don't do it right, you could end up paying lots of penalties, interest, fines, and just a whole bunch of other mess that you don't want to go through, because it's not fun to deal with the government. We all love big brother, but we don't want him messing with our stuff, as much as we can handle it.Jonathan:Joseph and I are going to be starting, talking about this. So Joseph, talk to me about independent contractors and employees. This is one of the things that I didn't really know was an issue, in the dental world, until I started getting an email once every other week from a client saying, "Hey, I don't know how to do this. What am I supposed to do?" Talk to me about the relationship, what it means and all those things.Joseph:Sure. Well, I think at a high level, there's a couple of things that we've got to keep in mind. Why does the government care about 1099 versus W2, versus not issuing 1099s? So I think we can maybe get a chance to give our listeners a little bit of a heads up, on why that matters. I think we can also talk about, at a high level, what decisions do you make as a business owner? So, as all of the people that listen to this podcast know, every day in your life, in your business, in your career, you take risks. There is not ever a way to completely avoid risk, but what you want to do is, you want to be able to mitigate your risks. So we want to talk through a little bit of this, at a high level, and help dentists understand how to mitigate these different risks and how to make sure that they're staying in compliance.Joseph:And, one thing... Jonathan and Spencer pointed this out on our team, to me, I said to him, one day. I said, "Why is this 1099 thing a big deal? Why do we even care, and why are we having to do all this work?" And he said, "Well, you've seen the checkbox on the return, right?" And I said, "No, what are you talking about?"Joseph:He said, "Well, on every single business return, there is a check box that says, 'Is your business required to issue 1099s?' Yes or no. And then if you say, 'Yes, I'm required,' 'Did you actually issue them?' So every single return that's going out the door, we're clicking that box. And the client is signing, that they agree that yes, that they've issued all the 1099s that they're required to do."Joseph:So those are a couple of things, kind of at a high level, that immediately jump out to me. Number one is, you can't eliminate risk, but what you want to do is you want to do everything in your power to mitigate your risk, and to put your practice in the best situation. Number two is, there are reasons that the government cares about 1099s versus W2's, and we'll talk a little bit about that.Joseph:And number three is that, it's part of your tax return, whenever you follow the tax return as a business.Jonathan:Yeah, that's a great point. So let's start with the first, and the first is that, one of the big reasons why you had to be filing this right, is because you have to say... This isn't something that is not checked. This is something that is a core critical component of complying with some of the government's requirements. What Joseph was alluding to is, whenever you're filing any type of return that has a business component to it, one of the assertions you have to make, and you have to agree to as the signer of that tax return, is that if you had a payment that was going to a contractor that was appropriate, that you issued them a 1099.Jonathan:Now, so you're required to issue 1099s, and you're required to do those pieces. we're not going to really get into the nuts and bolts of how to fill out a 1099, or who gets, hen it happens and things like that. But that is something that we have to make sure that we're doing correctly, when that box gets checked. Make sure that we issue all the 1099s we were supposed to. Was there more that we wanted to expound upon, on that piece/.Joseph:Yeah, just in general, those are the things that matter, kind of at a high level. And the government, the government wants to... Like, if you wanted to be super spiteful, you'd say, "The government wants all of the government money that the government can possibly get." But at the end of the day, what the government's trying to do with our tax system and with tax returns is, they're trying to trace the money that's coming in and out of our economy and make sure that it's appropriately taxed, and that the appropriate taxes are paid on each one of those. And a 1099 is a critical component of that. And there certainly are some pieces that go with a W2 versus 1099 decision, that affect the government, that if the government had their druthers, they would rather people be W2 employees and subject to the FICA tax, and the one half of self-employment and all of those other pieces. So, what are your thoughts in general, at a high level, what the government's trying to accomplish with this topic?Jonathan:So I've always taken a little bit different of an approach. I've always taken an approach of, they're going to... The government is really more trying to protect the individual employee level. So, me as a business owner, they're going to get their pound of flesh from me, but they're trying to protect the pound of flesh that's on the employee's back. Is what I typically feel like, the reason that they're doing, that they get so strict about these requirements. We haven't gotten into the requirements yet, or how they view it.Jonathan:But to me, the way I've always seen it is, that they want to try and curb abuse from the employer side, to try and get the employer out of having to pay their portion of the employment taxes. Because the government's going to get those employment taxes, one way or the other, whether it's an independent contractor or if it's from the employer. They really, honestly, shouldn't care much about where that money is coming from as long as they're getting it. But to me that the reason that they're doing that... So, if that logic holds true, then why are they being specific about it? To me, it's because they want to make sure that the employee isn't getting taken advantage of.Jonathan:There's a lot of... Joseph, you have one that you're going to share, another one that's very, very common right now is, Uber drivers. A lot of them have been independent contractors, because they own their own equipment and they have their own vehicle. They drive around, they make their own hours. They just use the app as a way to coordinate, and things like that. And I believe on a federal level, they've ruled that those people are employees, now. Even though they fit a lot of criteria, to be independent contractors.Jonathan:And the reason is that, all of these people were filing their tax returns and nobody... And they're all like, "Oh my gosh, I've got so much that I owe in taxes. Why is that?" It's because they all owed self-employment taxes. And so, the government still got their money, but it was, the employees were left holding the bag, in terms of paying in money and things like that. So to me, it's always been more about, less about making sure that the employer pays in more taxes and more about making sure the employee is not being taken advantage of, in many different ways.Jonathan:Now there's one caveat to that, and that's on the state level. On the state level, I feel like it's definitely, that they want the employers to be on the hook. And the reason is, is because independent contractors don't typically pay self-employment, they're not eligible for unemployment. And the State is who dictates unemployment, generally. There's a federal unemployment tax that is paid into the system, which is very minor. It's like 70 bucks a year, per employee, where on the state level, it's much higher.Jonathan:And we've had lots of states come after business owners, and just basically, rename everyone as employees. We've had people that literally have had a yard service company, that does their yard in the summer once every week and a half, to make sure that the yard in front of the office is done. They've reclassified those people from contractors to employees. That is, I don't know, like $2,000 a year in services and they're a company. And the reason is, is because those state departments want to raise unemployment tax revenues. And if you're an employee, you're eligible for unemployment. If you're not, if you're an independent contractor, you are typically not able to get unemployment. There are some states that have some provisions and safety nets for independent contractors, as well. But in general, that's how it goes down.Jonathan:So that that's always been my perception of it. Whoever knows, really, what the government wants out of everything. All we know is that they do care about the classification. They have been very strict about it. There have been people that have gone to the highest courts in the nation, to try and defend what their decision was, in terms of making this. So what was the example that you're willing to share, in terms of the story about independent contractor versus employees?Joseph:Yeah, so there are a number of different tests that are out there. There are a number of different rules, but one of the ones that almost always gets individuals versus the company, and puts people on the hook to become a W2 employee versus 1099. The technical term is risk of loss. So in other words, if you're going to have a 1099 contractor, they need to be in business for themselves, and they need to have a risk of loss. So I'll give you a very, very simple example.Joseph:If you hire someone to come and paint your office, paint your dental office. You meet with the painter, he comes out, he tells you this is how much it's going to cost. There's two different roads, and I'll use two different extremes on this, to illustrate the point of risk of loss. And then I'm going to tell you about the famous court case that came out, several years ago.Joseph:If the painter shows up and as the painter shows up, you provide that painter with a uniform, the white painters get-up. You provide that painter with a ladder, and with paint rollers and with paint, and you provide them with the materials to make sure that they don't get paint on the floor, and you do all of those things. And all the painter does is just show up and paint with the paintbrush, paint with the paint roller. Let me ask you this, Jonathan. What is the risk of loss? Is there any risk of loss for this painter whatsoever, outside of their time?Jonathan:Other than maybe falling off a ladder, or something like that. No.Joseph:So there's really no risk of loss. And if you couple that, and look at another scenario, if that painter shows up with his own paint truck, his own paint uniforms, his own crew that he has, that are working for him. He's got his own equipment, he's got his own workers' compensation insurance. He's got all of these different pieces, that enter into his risk of loss, so that is much more likely to be a 1099 person. Where in my first example, when there's absolutely no risk of loss, there's virtually no financial risk of loss in that situation.Joseph:And FedEx and UPS kind of got in trouble for this a couple of years ago, whenever they had all their drivers. And they were doing just exactly what I described. They would provide the uniforms, they would pay for the gas, they would provide the truck, they would provide the maintenance on the truck. They would provide everything. And the driver just had to show up, drive the truck from A to B and deliver the packages. And what the courts determined was that, there was no risk of loss in that situation. So rather than all of those drivers stay as 1099 independent contractors, the government reclassified all those wages and said, "These are all W2 wages. Oh, and by the way, you owe 7.65% in FICA taxes, and the employer portion of Social Security and Medicare on all of these wages."Joseph:And since then, they've made big changes at those companies, and those are all considered W2 employees. But that's a very real case of this risk of loss piece, that basically factors into this decision. So I think I'd just kind of use that as a launch off point for you Jonathan, to talk about these specific situations that we see in dental offices. And as we were talking through some of the bigger questions that we get, this is one of the biggest questions that we get. It's a question that I get multiple times a year, specifically when we're out trying to figure out 1099s, when people are coming on board, when we're having new practice owners come on board. They're like, "Oh, can I just pay them as a contractor?" And I'm like, "Well, it depends." Just like every fact and circumstance is going to, is going to dictate the situation.Joseph:So what are some these specific... I mentioned the painter. I mentioned the drivers for UPS and FedEx. What are some specific situations in which dentists have to face this decision?Jonathan:So, and to be specific, it's every time you have someone that's going to provide a service for you. Whether it be your front office person, whether it be your telephone company, whether it's going to be an associate or anyone else. What we're talking about, we've described the problem to outline how this is going to affect you guys. Whenever you decide to hire anything, you have to decide, is this going to be... Is this a service that someone is providing me? If so, then are they going to be... There's technically another classification. Are they going to be an employee, an independent contractor, or are they just a company that's providing me services that I'm paying them money for?Jonathan:And if it's a company, then they are, if it's an LLC, or if it is incorporated in some way, it is typically... Well, sorry, if it's an LLC, that's been incorporated as a subchapter S, then it will be excluded from this conversation. They could still be, technically, a contractor that is an employee of that. And it gets really convoluted, and really confusing. But for purposes of this discussion, we're going to be assuming that it's not services being provided like AT&T. You're not going to send a 1099 to AT&T. They were specifically excluded, back in I believe 2008, they tried to make it where even those companies would get 1099s. Congress finally said, "This is going to be too big of a headache. There's no reason you should be issuing a 1099 to the Home Depot when you go and buy $800 worth of repair items in a year." And so, that's all not taken care of.Jonathan:Now, that is in terms of the protocol in which how you report what you paid, that doesn't affect how you choose to pay someone. So that's an important distinction, here. We're not saying that, just because you issued someone a 1099, that does not mean they were an independent contractor. What we're talking about is the basis point, the starting point of how you're paying them, whether it be as an employee relationship or as an independent contractor relationship, or again, that third example was a service relationship between yourself and another company. Some people try to conflate or mix the independent contractor with another company.Jonathan:So let's say they have an associate, that owns an S-corp and, "Well, it's an S-corp, and I'm paying the S-corp for those services. And they're trying to get away with," and those types of situations. Assume that the government is logical enough to be able to see through that. I could probably explain that to my second grader, and she'd probably have to be able to see through that. The IRS will be able to see through it, too. So don't try and be, we're not going to be trying to be clever, in this conversation. We're going to be trying to be real-world examples of what will actually happen, if you go down this path.Jonathan:So, specific examples, the most specific example that we get is, we get a new doctor getting out of school. And they're saying, "Hey, I'm talking to this company, and they're saying that I can choose to be either an independent contractor or be an employee." On the other side of that, we have a client that's a practice owner that comes to us and says, "Hey, I've got this associate. Do I need to classify them as an employee, or an independent contractor?" Same exact situation, for both sides of that. And the answer is the same for both of them. So, given that type of a situation. Joseph, what is your typical reaction and answer to that question?Joseph:Sure. Well, I think we go through a bunch of the different tests. The one that almost always gets everybody, is this risk or loss piece. So, do you have an associate that's coming in, and... Have they done anything to get new patients? No. Are they bringing in all of their own tools, and their own equipment in order to do dentistry? No, they're using ours. Do they have any control over their schedule? No. I tell them when to be here. How is it that they're compensated? Based on a production percentage. And I'm like, "That's pretty simple. Like we don't have any risk of loss. This is not an independent contractor." And this is somebody that's basically coming in... That's a pretty clear cut case for me, as someone that comes in as an employee, and is not a contractor.Joseph:What are some of the other tests that you see, that you use, whenever we're trying to give people guidance? And we would certainly encourage you to talk to your CPA about this and make a good decision together. It's not always a really easy, clear cut, black and white. I like to use extremes, so that we can illustrate our point, here. But what are some of the other things that you're looking for?Jonathan:There are a few. The simplest question to answer for a lot of people is, is that associate... And we're talking about, from the social perspective. Is the associate working somewhere else, and free to work somewhere else? And, not under some type of a non-compete, that's super vast. That's a really simple test, as well, because if they're literally not going to be able to work anywhere else, then you've got financial control over that person. The reason we're saying these words and financial control, and risk of loss and things like this, the reason that we're saying this is because you then, as the person who will be paying for these services, have the choice how to pay people. If you're correct or not is determined by a set of tests that is distinguished by the federal government, as well as your state governments. And sometimes, those two governments can disagree on these things.Jonathan:So you need to be aware that, that is a part of it. And what we're talking to you through is some tests that they will be testing you on, in terms of deciding if you were correct in your interpretation and application of these ways that you pay people, and then report it to the government later on. So the IRS, it's like a seven step test for the federal government side, which when I say IRS, I'm talking about the federal government. And as I said, risk of loss is a big one. That's just a bigger concept. It's an easier one to talk about.Jonathan:Financial control is another one. So if you're really in control of that person, like if you're able to fire them without them having a whole lot of say in it, you've got a lot of financial control. If you're the person making the schedule, if your practice is making the schedule for them, if your practice is providing all the ways for them to be able to do dentistry. If all they're doing is showing up and doing dentistry, and have a defined time they're supposed to be there. Then, that's a lot of financial control that you're covering over that person. And you're likely to be classified, that person is likely to be classified as an employee for you.Jonathan:Doesn't matter what you want. Doesn't matter what the person who is giving you the services wants, that is what the government will likely end up saying. So, that is an important distinction. So when I say financial control, the big pieces are that are one, can they work other places? Are they under non-competes? Two, do they make their own hours, or do you set the hours for them? Three, do they bring their own supplies? Do they have their own stuff, their equipment? Is it, they're paying on a machine that they were using? And really, four, are they responsible for their own labs, and things like that? Are you providing the ecosystem for them, or are they doing it?Jonathan:Again, Joseph mentioned earlier, are they going out and getting patients, are they building up a clientele, and things like that? That's really important stuff to interpret and decide on, if they're doing that in your office or not. So I will say, my typical answer to people is that, if ever questioned you will likely end up being classified as an employee- employer relationship, whenever there's an associate dentist that is there, full-time, effectively full-time, they will most likely end up... Regardless of how clever you try to be and say, "Oh well, they're making their own hours, but the hours they're choosing to do just happened to be when we're open every day."Jonathan:No matter how clever you get on it, they're probably going to be able to just be like, "Sorry, we're just going to reclassify you." And you're going to have to pay the back taxes, the penalties and interest that associated with it, and then, just deal with it. Because, I'm going to be honest with you, you fighting that is going... For that one employee, that one time that you're having to do it, is going to cost you a lot more to fight it than it is just to pay the interest and penalties and back taxes. And if it did go higher up in the courts, you're probably going to end up losing it anyways whenever they look at the situation, if you're following that fact pattern.Jonathan:There are some shades of gray in this. Like I said, what happens, what if you're one of those associates that's only working there two days a week, and you're working somewhere else, two days a week? That's a very common thing. A dentist has, not tons of capacity, but they've got a lot of demand and they don't have enough capacity for it, so they need to have someone there two days a week. You're kind of phasing in, and things like that. That's where it starts getting a little bit more gray. It starts getting a little bit more difficult. Does that associate have that financial control, and things like that? In those circumstances, to me, unfortunately again, you're more likely to get reclassified as an employer-employee, even if the government comes in and checks that, than you are to be remained as an independent contractor.Jonathan:More likely, I'm not saying that's a definite, I'm saying, you're more likely. You'd want to have as many of those check marked boxes checked as possible, that you have control of those things. Specifically your hours, some type of financial control, some type of way of dictating how your schedules is made, and things like that. All those things would be really important to have, to be able to try... If you're a really, really worried about that independent contractor level coming up. So those are my thoughts in terms of where that happens, specifically for the associate dentist situation.Jonathan:And Joseph, did you have anything to add, in terms of that?Joseph:I guess the other thing is that, this thing has a tendency to only go one way. We've not ever had somebody that's been classified as a W2 employee, that raises a stink about it, they challenge that, and then they get reclassified as a 1099.Jonathan:Yeah.Joseph:So back to the risk mitigation piece, like this is the duck test, guys and gals. Like, if it walks like a duck and looks like a duck, it's probably a duck. And in a lot of these scenarios and situations, when you really start digging into it, "Sure looks like an employee to me and not an independent contractor," when we start applying these tests and that kind of thing. So, I've not ever seen it go that way, you and I both know and have seen many, many times... There's lots of famous cases where somebody that was classified as an independent contractor gets reclassified as an employee. We don't, we've not... Not that it hadn't happened, but I've not ever seen it happen where somebody was classified as a W2 employee, and it went the other way and they became all of a sudden, an independent contractor.Joseph:So back to the risk question, right? Every day as a business owner, you're taking risks that are out there. What risks are you willing to take, and what risks do you want to take?Jonathan:Yeah, exactly. And, let's talk about what those risks are. Let's say that it does get reclassified from independent contractor to an employee status...Jonathan:Hey, everybody, Jonathan checking in, really quick here. This episode got a little long, so we cut it into multiple pieces. This is Episode One, you can find Episode Two next week, or in the following weeks. So make sure that if you listened to this episode, you listen to the other episode as well, so you have the full context around everything that's going on. Thanks for tuning in, and we will see you next time.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country, and would love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they're starting up, or have become an owner in the past five years. That is our specialty, and we'd love to be able to talk to you about how we could help you in your services, with your tax and accounting services.Jonathan:And if you enjoyed today's episode, again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together, so that this adventure of business ownership is more fun, more productive, and better in the longterm.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444, that's toothandcoin, no spaces. T-O-O-T-H, A-N-D, C-O-I-N to 33444, reply with your email address. We'll send you instructions in the Facebook group. We'll send you the resources when they're available, and we will see you next week. 

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth and Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific. But we hope that these episodes help you along with your journey.Jonathan:Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey, a very important piece for you to understand.Jonathan:Another thing you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today to continue the discussion. Agree with us. Don't agree with us. Have a story to tell. Have something to share. Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion to be able to help you a little bit more than what the content is doing. So if you'd like access to that whenever it becomes ready, all you have to do is text the word toothandcoin T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address, and we'll email you instructions on how to get into the Facebook group, as well as add you to the list to be able to send you those resources when they're available. If they're available, we'll go ahead and send them to you as well. So onto today's episode. Hope you enjoy it.Jonathan:Hello, ambitious dentists. Welcome to another episode of the Tooth and Coin podcast. This is episode number five, which is a really good one. We're really excited about it. One of the things that if you've listened into one of the 120 episodes of the Start Your Dental Practice podcast, one of the things that I said that people needed in order to be able to be a business owner is leadership skills. It's one of the things that I always say this is not something that is usually inherent in a lot of people, is having leadership skills. You may believe that you have some leadership skills, and you may not be afraid of leading, but leadership skills are definitely something that once you get to a certain size of a company, it adapts, it evolves, and it becomes even more important.Jonathan:I find that a lot of people think that they may be really good leaders, but they're going off of that gut feeling of how it feels to just kind of push people along and try to go in a certain direction, because they know where they want to go. But that doesn't necessarily mean that you're doing that great of a job of leading everyone. So that's the reason that I said leadership skills are one of the things that is the hardest to come by whenever you become a practice owner to actually have and have to be inherent to actually just understand and know about.Jonathan:So one of the things that I always tell the people, I get a question like, "I am in dental school. What do I need to focus on in order to be able to be ready for practice ownership whenever I get out?", that's one of the things, is leadership. It's not, "Oh, you have to understand exactly how assets equal liabilities and owner's equity." The balance sheet is not super important compared to understanding leadership. So today's episode is going to be about leadership. I'm going to be interviewing Joseph about this. Joseph has a lot of experience with leadership in different programs and lectures on this topic and is someone who's very knowledgeable about leadership in small business. So Joseph, walk us through ... I mean, did I do a good job of teeing up that leadership is important? Tell us your take on leadership.Joseph:Yeah. I think that whenever we talk about the things that we do as a firm, one of the things that we're always constantly hitting on is that dentists spend 10,000 hours or 15,000 hours learning to do dentistry and zero hours learning how to run a business. I think to kind of piggyback on that, leadership's just something that is inherent in owning a business. It's a very difficult thing to understand how to do it and how to do it correctly. I think that's one of the biggest things that dentists can continue to work on, especially earlier in their career, is being that good leader of the office.Joseph:To be fair to dentists, it's really most of the people that are out there that are running businesses. They've got kind of their own what they would call style, and they just think that everybody needs to learn their style and this is exactly how we're going to do it, and we're going to move on. So I think that it's imperative that any business owner knows leadership, studies leadership, understands leadership. I think that that's one of the things that we can hopefully shed some light on today.Jonathan:So in keeping with the theme and the patterns of our episodes, why would it be a problem for a small business owner to not understand or take leadership seriously?Joseph:I think a couple of different things. Number one is that if you don't lead people well, they'll leave. People don't want to just work for money. They want to work for a higher purpose. They want to do work that matters, if I want to kind of pull a key phrase that's out there, and they need to be continually reminded of that, that what we're doing is work that matters and this is why. If you have a whole bunch of turnover, you're going to have a lot higher cost to go along with things, and things aren't going to run very smoothly. If your front office isn't running smoothly, if your chairside stuff isn't running smoothly, then you're going to lose out on opportunities to do well and to help more people and to service more people in your community and to be able to realize the financial dreams that you had whenever you started a business. I mean, leadership is key to making sure that you're able to meet your own goals and to do all of those things that you want to do with inside the practice.Jonathan:One of the things that I've noticed as I've consciously tried to sharpen my leadership skills and do better at leadership is that when I do that, it's not just the leadership of my employees that gets better. It's also the leadership of our clients and potential clients and my family. There's a whole lot of other pieces that go along with it, that leadership is not just about the small business. It helps out in a lot of different ways. So cool. I would probably just highlight a big problem is that a lot of people, you don't get to be a leader until you're leading.Jonathan:I mean, it goes back to one of our first episodes, saying, "You're not an owner until you're an owner." You don't own the business until you own the business. You kind of learn by doing, right? So it's hard to be self-reflective if you've never done it before. So walk us through it. Talk us through a framework for leadership. Talk us through how someone who has started hearing the podcast and understands, "Okay, I understand why I need leadership. Listen to these really smart, good-looking guys, and go with what they said, believe what they said." So talk us through that.Joseph:So when I was in college, Jonathan, I went to a small school and was in a couple of different organizations. I felt like I was a good leader. I just said, "Get out of the way. I'll show you how it's done. Give me all the work, and I'll do all of it. I'm not going to let you do anything. Look at all these great results that I'm producing for my organization." When I was 19 years old, I got selected to take part in a really elite leadership program for college juniors and seniors, sophomores, juniors, and seniors. That really opened my eyes to there's a whole lot more to this than "working hard" or getting the job done. I think that's probably one of the traps that a lot of entrepreneurs fall into. It's just like, "If I just work hard enough, everything will be okay. If I just try hard enough, if I just do all of these different things, get out of the way, and I'm going to show you how to do it."Joseph:So what I was introduced to at an early age that just really was ... I guess they call it an aha moment, right? The light bulb went off. But there was a couple of guys named Kouzes and Posner that wrote the five principles of exemplary leadership or the five practices of exemplary leadership. As we went through this exercise, just light bulbs started going off about my own shortcomings inside of leadership. So if it's okay with you, I'd love to go through these and maybe just kind of bounce some ideas off of you and get some thoughts from you on this, Jonathan. Does that sound like a good idea?Jonathan:Yeah, yeah.Joseph:So the first thing that really hit me, whenever you go out and study or look at leaders, is they have a tendency to have just incredible vision. They can see where things are going. But it's not about just me telling you what the vision is. One of the things that leaders do is that they inspire what's called a shared vision. So not only am I going to inspire you, not only are we going to have vision, it's not going to be my vision or your vision. It's going to be our shared vision. So whenever I say that, inspire a shared vision, I mean, one of the things that immediately comes to mind is what we're trying to do at Tooth and Coin inside of our CPA practice. As a shared vision, we want to be the CPAs from the time that they enter practice ownership until the time they retire. That's something that we can all get behind. I mean, what are your thoughts whenever I talk about inspiring a shared vision, Jonathan? What are some things that kind of stand out to you?Jonathan:Yeah. I mean, originally, that's one of the things that I think is a big pitfall about having a shared vision, is that entrepreneurship, there's a saying that it's kind of lonely at the top whenever you don't really have ... I mean, it's kind of just in your head. I think for dentists, they can usually sometimes think that the vision is, "I've got to get more patients in. I've got to do dentistry. That's my vision, is what my dental practice is." It's more than that, like you stated. People want to be paid for their efforts, but that only lasts for so long, and that shared vision is how you start your team, basically. You're surrounding yourself with people that are trying to do the same thing that you're doing.Jonathan:One of the really big analogies that people use in terms of teamwork is they talk about sports teams. If you're on a football team, your shared vision usually isn't that you're going to create some more social good in the world or you're going to bring a lot of spirit to the school. It's that you're going to win a football game. You have a vision of, "We're going to win. We're going to go to our state championship this year. That's what our vision is, and we're going to work towards that as a team to get to that point." It's not anything other than that.Jonathan:Whenever you're in business, you sometimes think that state championship is just the business is successful. In reality, it has to be something much more nebulous. It has to be a bit more impactful to the people that are surrounded, because what does that mean to be successful, and how do we define what that success is so that we can boil it down into a better vision of, "Okay, the practice is successful. Yes. But the reason it's successful is because it's doing what we want in our community. It's helping the people that we want to reach into our community. It's providing security and happiness to the people that are involved in our community." Maybe there's a certain types of procedures that you prefer to do over other people or other services.Jonathan:One of the things that I've stated before that is a dental moment that's helped me is before I got Invisalign, I would get really bad headaches. I found that whenever I finally got my teeth straightened, I didn't have as bad of headaches anymore. It helped a lot. So that's something that that practice owner did for me that if someone is to surround themselves with, "Hey, we're going to help people. We are a health organization that's going to help" and is very specific in the way that it's going to go about doing that, then that makes it much easier for people to get onboard and be a part of that team so that they can start moving forward towards that state championship, so to speak.Joseph:Yeah, absolutely. So we've got to have a shared vision. We've got to be able to be on the same page with all of that. The second thing that we've got to do is we've got to be able to enable others to act, or you might call that process delegation. So if a dentist starts a practice, they're not going to be able to answer the phone, schedule appointments, file claims, verify insurance, collect payment, do fillings, do x-rays, do hygiene. They're not going to be able to do all of it. That was one of the things that I know you and I have talked about this internally, is we try to figure out and bring staff along and to delegate some responsibility and to pass work down and to basically enable others to act. We kind of have this own self-thought that, "It is only me. I'm the only one that's good enough to do this job." So the second thing inside of exemplary leadership is we've got to enable others to act. I think that goes kind of a long ways. I mean, any thoughts on that, whenever you're delegating, enabling others to act?Jonathan:Yeah. So, I mean, making sure that people can do the jobs that you've assigned them to do is really important. So whenever you're talking about enabling others to act, are you just saying that people have to be able to move towards that vision in their own way? Fill that out for me. Talk to me more about that.Joseph:Yeah. So, I mean, everybody needs some guidelines and some guideposts, or you could call them bumpers in the lane of bowling or whatever. But they need to be able to have a little bit of autonomy to come up with the best way that they have to do the job. Nobody wants to be a robot. It's really about giving them some guidelines and giving them some guideposts. But what you want is you want to make sure that people have ownership in their position and that we're hiring human beings with real brains that have the real desire to want to do a good job. So we've got to give them some space in order to do that. Now, certainly, there's certain ways that you want to have things done. You want to have some uniformity in a lot of things that you do. But in a big picture understanding, you can't do it all, and you need to be able to enable others to act and enable others to help.Jonathan:I think dentists are pretty good about that. I think that naturally, a lot of dentists are pretty good about that, because they're used to, "Here's your role. Here's your role. Here's your role." The dentist doesn't want to be doing the [inaudible 00:14:28]. They're going to let the hygienist do that. They're going to be able to do the pieces that go along with that. So yeah, I get that.Joseph:Yeah. So first thing we talked about inspire a shared vision. Second thing we talked about is enable others to act, and the third thing is that we've got to do what's called encourage the heart. We've got to give people some feedback in how they're doing, and a lot of times, this is something that's absent inside of our business and absent inside of our organizations, is just taking the time to say, "Thank you. Thank you for being here. Thank you for doing a good job. You did a really good job with this." We've got to encourage the heart, in a way, because, again, we're dealing with human beings that are on our team that we're leading. We've got to help them see all of the good that they're doing. "Hey, did you notice that Ms. Jones that was in, did you see the before and after pics on that? Man, look at what we did together. Nice job helping us out with that." So I think that's another big thing, is we've got to encourage people. We've got to encourage the heart.Jonathan:Yeah. One of the things that comes to mind with that is Tom Shoes. If you remember, the Tom Shoes is you buy a pair of shoes, and then they're going to give another pair of shoes to someone in an impoverished country as a way to do social good. So not only are you buying a pair of shoes, you're buying someone else a pair of shoes. You're doing good by buying these shoes. When Tom Shoes came out, it had this massive success, because they shared their vision with their customers, not just the people that were working with them.Jonathan:I've seen dental practices do this, too. So a really good example of this is we had a client that said, "Hey, we're going to do a bonus program for our fluoride." They had a really low fluoride percentage. They're like, "Hey, Jonathan, we've been trying to figure this out. [inaudible 00:16:11], the data consultant on it said to do this." They tried this, and it worked, was they said, "Okay, for every fluoride that we do over the next quarter, we're going to give $5 to this charity." It was a charity that the team had came up with, or I can't remember if the team came up with it or the doctor came up with it. But it was a charity that everybody wanted to help out with. So they said, "Okay, we're going to do these $25 fluoride ... We're actually going to offer them to patients."Jonathan:So they let the employees have more of a reason than just, "Hey, it's your job to offer fluoride to patients," have a reason to do it. They ended up getting something like, I don't know, $2,000 they ended up raising for this charity that was a big help to the charity. So it actually did something. Them doing the fluoride actually did something. An added benefit to that was once that incentive was over, the team had basically self-trained themselves on how to offer fluoride.Joseph:That's awesome. That's awesome. I like it. So we talked about inspire a shared vision, enable others to act, encourage the heart. The fourth piece of exemplary leadership is model the way. So one of the things that you'll hear a lot about in the leadership world is they'll talk about tone at the top. They'll talk about what kind of example are you leaving for your employees? So if you're constantly 15 minutes late to the office, you should expect your staff to be 15 minutes late. If you're on time, if you're early for stuff, if you present yourself in a very professional way, if you watch your language, if you keep things in a very professional way, you're modeling the behavior you want from your team members.Joseph:I think modeling the way is a really, really important thing, and it's not about being a prideful thing, "Everybody's got to be like me" kind of thing. But it's about how are you going to act in front of the patient? How are you going to treat that patient? Are you going to belittle your patient? Well, you should expect your staff to belittle the patient. Are you going to use their last name whenever you address them? Are you going to address them with respect? Are you going to call them. "Mr. Rucker, thank you for coming in today"? Are you going to be grateful? Are you going to be gracious? What is it that you're modeling for your staff in order to present the tone and present the kind of culture that you want at your office? I mean, are you going to belittle one of your team members in front of a patient in a way that's going to be very disrespectful and it's going to make them upset? Then you should expect your team to do that.Jonathan:I'm sure there's a lot of people that are nodding their heads and have seen that in the past, where you've had a boss that acted in a certain way. Then you look at and around you, and even though there might be some contempt about how the boss is handling the situations, that's kind of how all the situations got handled after that point. I've had bosses that lashed out at employees and would yell and scream and curse. Honestly, after I left those work environments, it was hard for me to kind of not think about things in that way, because the person that I had modeled in my mind as being the boss, that's how they reacted to those situations.Jonathan:So I had a lot of times I pulled myself away and thought, "No, Jonathan, you're a calm, collected guy. You're not a hothead. You don't have to act that way just because the other person acted that way. Doesn't mean it was right." That's something that even I have struggled with in the past to reconcile, because all these patterns are learned behaviors. So setting the tone at the top makes complete and utter sense. So yeah, that's a great one.Joseph:Yeah. Another thing is what are you going to tolerate? Whenever it comes to different stuff, how are you going to address things? Are you going to have the courage to address the things that you need to address? Those are all tough things. I think we could probably spend a whole podcast, Jonathan, talking about having crucial conversations and addressing things and what do you address and what do you not address and what's the best way to do that? So I think we should probably save that for another topic, but modeling the way is a big, huge piece of leadership.Jonathan:It reminds me a lot of just the culture conversation of businesses. What is the culture of the company? Even when you said, "How do you address people?," I mean, there are a lot of different ways you can address people. You can be incredibly professional and have that be done in multiple different ways. You be incredibly professional and be casual. You can be incredibly professional and be very manneristic, so Mr. and Mrs., making sure who it is. There's a lot of different ways you can do it, and all those little things are going to permeate throughout the business. They're going to create the culture of the company and the culture of the practice.Jonathan:That's one of the reasons why a lot of people sometimes tend to lean towards ... When I say a lot of people. I'm not saying the majority. I'm saying there's a lot of people out there that their ideal way of going into practice ownership is through a startup process, because they don't want to go into another culture and try and reshape that culture based off of their personality and style. So yeah, I definitely think we could probably have a whole episode about culture, and that's definitely a part of it.Joseph:For sure.Jonathan:So you want to go to the next piece?Joseph:Yeah. So the last piece is to challenge the process. We give you all kind of just cliches that are out there. If you keep doing what you're doing, you keep getting what you're getting. What's the definition of insanity? Doing the same thing over and over again and expecting different results. Insert your own cliche for doing things. We talk about Saly a lot in the accounting world, right? Who's Saly again, Jonathan?Jonathan:Same as last year. She's only got one L in her name, but she's [inaudible 00:21:52].Joseph:Yeah. So number five is to challenge the process. If we keep doing what we're doing, we're going to keep getting what we're getting. So as you get a chance to look at all of the different things that you're doing, are you doing things exactly the same way year after year? Are you having problems with your scheduling? All right. So if we keep having the same different pieces, do we have a lot of no-shows? If we have no-shows that are taken up time on the schedule, what are we going to do differently? What are we going to challenge the process, and how are we going to handle this in a different way? Is it because we're confirming appointments? Well, maybe we need to have a different system of confirming appointments. Maybe we've got all kinds of different stuff that we can try.Joseph:So one of the great things about being a business owner is that you get a chance to try all kinds of different things. If you don't challenge the process, if you just keep doing the same thing over and over again, you're going to continue to beat your head against the wall. So number five is challenge the process. What are your thoughts on that, Jonathan?Jonathan:I think that of all the leadership traits that I have that I enjoy versus the ones that I'm not as good at, challenging the process is the one that kind of is the reason our business got created, was because every CPA firm that I was a part of, I was building up and breaking down every process that we had, because I'm to a fault a person who likes the most efficient way of doing things. If it's not the most efficient way of doing things, then I'm probably going to space out real quick whenever I'm a part of that process. Joseph, you can amen that.Jonathan:So one of the things that I get a lot of eye-rolls about from our team is where I decide to add in a new app to our software stack, because we're always trying to find a better way of doing it. There comes a point where that can be detrimental, but yeah, you've got to be able to keep adapting and moving, or else your business model could end up going to the wayside. If someone else figures out a better way to do it than you that's substantially better, you've accidentally inherited some business risk. In dentistry, you'll probably be fine, but it's a danger to your business.Jonathan:So yeah, definitely challenge the process. I don't know how many times I've heard from so many owners throughout the country that the reason that this is a problem for us is because it's our patient base or it's our software or it's because of this insurance that we take or it's because ... There's a reason behind why this doesn't work for them. Yeah, sometimes it takes 5, 6, 7, 8, 9, 10, 12, 13, 15, 20 different ways until you finally figure out the way to do it the best way, but you've got to keep trying. You've got to keep challenging the process to see if you can make it better and do better at the end. The purpose of doing that is to meet that shared vision. There's a reason you're trying to do that. It's not just because you're trying to add two cents a dollar to your bottom line. It's because you're trying to meet that shared vision. That's how you get the buy-in from the team to be able to do that. So I'd love to hear your insights to challenging the process, working in our firm.Joseph:Yeah. So you mentioned that this is probably your biggest strength in this list, and this list isn't you have to get all of these right 100% of the time. It's really a guide work and a framework for you to determine your own style and to move forward and to help your practice move forward. You mentioned challenge the process as being your best one. That's probably the one that I don't do well at all. It's like, "Man, I've got this tried and true way of doing things. I know it. I don't have to learn a new process. I can just crank through as much as I possibly can. I've been using this same Excel file for this many years, and it's just bam, bam, bam, bam, bam."Joseph:So I think, interestingly enough, if this is what you would call your area of strength, it's definitely my area of weakness, is to challenge that process. It's not that I don't want to get better. I want to get better, too, but I don't want to take the time learning a new software, a new app, a new work process, a new workflow, all of those different things. I guess I've just been scarred over the years. I used to really good at this early in my career, like all these challenges and stuff. So I'd come up with all these different gadgets, all these different ways of doing things and spend all this time on it. Then it just wouldn't work. I'd be like, "Well, see, we should've just done it the same as last year," right?Joseph:So, anyways, I think that's why we complement each other well. When we look at this list, Jonathan, what would you say is your biggest challenge? I mentioned that the challenge process is my biggest weakness in this list, but between inspire shared vision, enable others to act, encourage the heart, model the way, challenge the process, what would you say is probably your most difficult piece in this list?Jonathan:It changes. It's fluid. I think of ones that have been challenges. So initially, inspiring a shared vision, we talked about one of the challenges at the beginning is that you're trying to build something successful. That's what you think the vision might be. I went along with that, too. I made that mistake when I started the business, until we became much more purposeful in the way that we did leadership inside the firm. So at one point, it was that. I feel like we're in a better space than that now. So at one point, that was it.Jonathan:The thing I think I've always been pretty good at, enables others to add, but there have been times where ... I tell my employees this all the time. If I'm handing something off to you, I have to hand it all off to you, because if I'm even touching it, I have to be a part of all of it. I can't just pass over a piece. It has to be all or nothing. So in a way, at one time, I probably wasn't great at it, because probably it was too of a min-max, or what's it called wherever you ... Micromanage people. But I think I've gotten better at that.Jonathan:Encouraging the heart, another one that I think we could probably do a little bit better at that now, but I feel like I do an okay job of that. Modeling the way, we're a virtual company, so we don't see each other every day. Sometimes whenever you've had a hard day or not slept in a few nights because you've got a newborn at home, you come into a meeting, and you're a little tired or something like that. Yeah, sometimes that can be hard to do, too. But I feel like over the time that I've had in this industry, as well as in this specific business that you're never going to be perfect at all of them. So you have to have to give yourself some grace in these things. But you have to be aware that you're working towards doing a better job. That's what I try to do every day, is I just try to be better. I try to be better while allowing myself to not be perfect.Jonathan:So I feel like I have minor weaknesses in all of them, but I would definitely say that my strength would probably ... See, with the one that I said I had the strength in, I said I had maybe to a fault that sometimes I like to challenge it too much, because maybe I'm trying to make something more efficient, and it ends up wasting everybody's time because we look at an app that we end up not implementing because it ends up being only a fraction of a second better or something like that or even be worse off than the other solution. So you're going to have your pros and cons to all of these. It's just you have to try and do as good of a job as you can on the ones that you can and then allow yourself the grace on the ones that you don't. So what about you? Where do you feel like the ones that are ... You mentioned that your weakness was your biggest strength.Joseph:I always like to be a cheerleader. I figured out a long time ago that it's very easy to be the worst part of somebody's day. The person at the drive-through does something bad, you can yell at them, and that five second encounter will be the worst part of their day. So I kind of flipped that on its head, and I said, "How can I try to be the best part of somebody's day?" So mine is encourage the heart. I really like to get a chance to tell people in a sincere way ... It's got to be honest, and it's got to be sincere. It's not just a Johnny good job kind of thing. It's got to be one of those things where it's honest and sincere and it means something and it's not handed out all day, every day. "Hey, congratulations for showing up to work on time today." Well, you're supposed to show up to work on time today. But you can say at the end of the week [crosstalk 00:30:15].Jonathan:[crosstalk 00:30:15].Joseph:Yeah. "I made it through another" ... Yeah. But you can say, "I really appreciate your dependability as an employee. I always know that I can count on you." That's honest, and that's sincere. "The other day, whenever you helped Ms. Jones out, she was having the pain with whatever, and you walked her through that and helped out with that. That really meant a lot. Thank you for putting our patient's mind at ease and helping them out." Having that kind of honest, sincere appreciation for your team members, that's one of the things that I really like a lot kind of to do. I don't know. It was a challenge that I figured out several years ago. I want to be the best part of somebody's day, because it's just so easy to be the worst part of somebody's day.Jonathan:I definitely agree with that statement. So cool. So is there anything else you wanted to add in terms of leadership? Leadership is a big topic, everybody. I mean, this is not a 30-minute thing that you're going to listen to that. "Now I'm ready to lead that Fortune 500 company. I'm ready to be the CEO." While I would love for that to have been the case with what we shared today, that's not going to be the case. But this is a really good framework to start, to start conceptualizing and looking internally on the ways that you're going to be able to impact the lives of your people inside of your practice, not just your employees, again, your patients and your community and your family and everything like that. So Joseph, is there anything else you wanted to add in terms of this topic?Joseph:Yeah, no, I think he nailed it on all of these things. This is a framework. This was the first framework I was introduced to, is learning how to be a leader. It's been very impactful for me, and I'm just glad that we got a chance to share it with our audience today. You're not going to be perfect at any of them. Leadership is a process. You've got to continue to learn and grow and learn as much stuff as you can about leadership and continue to challenge. Going back to challenge the process, challenge the process of how you're leading your team and continually seek out knowledge on that.Joseph:I mean, as you mentioned, we could spend hours and hours and hours talking through different leadership models and theories and all the different experiences that we've had in our life. I'd like for this to just kind of be a beginning, a beginning, the conversation with you about leading, having these five core principles according to Kouzes and Posner about exemplary leadership. Again, inspire a shared vision. It's not my vision. It's not your vision. It's our vision. We want to enable others to act. We want to encourage the heart. We want to be able to help people understand that they're doing a good job. We want to model the way, set the tone at the top, and we want to challenge the process. Saly is not always our friend.Jonathan:Perfect. Well, guys, thanks so much for listening to another episode of the Tooth and Coin podcast. This is episode number five. It's about leadership, where we talked about the problem being that if you don't take leadership seriously, your business just won't be as effective as it should be. It can cause a lot of issues and even cost you a lot of money in the long run. We've shared a framework that you can use and adapt to help conceptualize on how to do these and gain these skills in leadership and maybe even do some planning on how to impact your business on your own.Jonathan:If any of these topics have resonated with you, if you have stories to share about bad bosses, people who've done bad leadership in the past, that can be a really powerful tool to be able to share with people to see how to not do the stuff. One of the best ways to learn how to do something is to learn how to not do it. So if you have any stories about that, feel free to share them in the Facebook group, in the Tooth and Coin Facebook group. Thanks again for listening in to the Tooth and Coin podcast, and we will see you next time.Joseph:Bye, guys.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country. I would love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or have become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:If you enjoy today's episode, again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the long term. Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Apply with your email address. We'll send you the instructions in the Facebook group. We'll send you the resources when they're available, and we will see you next week.

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth and Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific, but we hope that these episodes help you along with your journey. Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share. Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that, whenever it becomes ready, all you have to do is text the word toothandcoin, T-O-O-T-H-A-N-D-C-O-I-N to 33444. And that's tooth and coin, all one word, no spaces, to 33444. Reply with your email address. And we'll email you instructions on how to get into the Facebook group, as well as add you to the list, to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well. So onto today's episode, hope you enjoy it.Joseph:Hello ambitious dentists and welcome to episode number three of the Tooth and Coin podcast. Today, we are going to discuss the challenges that come along with being a business owner alongside me, as usual, is my trustee co-host, Mr. Jonathan VanHorn.Jonathan:Hey, hey you guys.Joseph:So Jonathan, I think what we're going to talk about today is just to get a chance for our listeners to understand what are some of the challenges that come along with that. So I think first and foremost, maybe we start with dental school. So what is it that a dentist, and I'm relatively new to the profession, what is it that dentists learn in school? Like when they're in dental school, what do they teach them?Jonathan:Yeah, I mean, the biggest problem is the easy one. And that's that they go to dental school to learn dentistry and to become a doctor and to be able to help people with their oral health. They do not learn how to become a business owner, which the majority of dentists go on to become practice owners. And so the number one challenge people are facing and being a small business owner in the dental industry is that they got to become a business owner whenever they've never owned a business before, or had any type of training in it.Joseph:It's funny that you say that, I was thinking about when I was a kid and I went to the dentist, I was maybe 15, 16 years old, something like that. And I got to talking and my dentist came in and he said this, that and the other. And he said, "Have you decided if you're going to go to college or not?" And I said, "Yes, I plan on going to college. And he said, "Well, if you go to college, he said, you should major in business." And he said, basically exactly what you just said. And I said, "Business, why should I major in business?" He said, "Look, I'm a dentist now. And they taught me everything that I needed to know about dentistry to get started in practice, except for how to run a business, no matter what you want to do, you're going to need to know how to run a business."Joseph:And I was like, "Okay, duly noted." That was one of the first people that kind of told me that I should major in business, depending on wherever you go. He says, "You're always going to need to know business." So what do you see Jonathan, as some of the different elements that go along with that? I mean, to me, business at that age, I certainly, business seemed easy to me. People come in, they get services, you pay them, you kind of go home and do your own thing. So, as we think about maybe some of the challenges of "the business" or running the business, what are some things that kind of immediately come to mind for you?Jonathan:Well, what's funny is that we went to school in the business world being CPAs we had to have business training. Our school that was related to business, almost like parallel to business. Even having classes so far as in that, where they teach you things like strategic management and things like that. But it's all book stuff really. I mean, it's not real world experience. And there's just so many problems with traditional education of what it actually even brings to the table when it comes to actually being a business person, so to speak. So there's only so much that information or education can give you when it comes to understanding what happens when it comes to owning a business. So all the people that are listening now that are either soon to be practice owners, or even the people that are already practice owners that already know this is that you learn most of this when you first become the practice owner.Jonathan:The education can give you a little bit of background, give you a little bit of an understanding of what you're getting into, so to speak. But if you've spent 15,000 hours learning how to become a dentist and zero hours learning how to become a business owner, whereas us being CPAs, we spend tons of hours in business school. We have more information. We may not have the experience, but we definitely have more information whenever we go into that situation in the first place. So the problems are stacked up on dentists pretty much from day one. The biggest piece is they don't typically have the educational background. Now I talk to dentists all the time. We even have at least one client of ours, Joseph, for Tooth and Coin that was a CPA before he was a dentist.Joseph:Really? Okay.Jonathan:Yeah. So it's not like they found that the secret to success is they had education. It's not necessarily that. It's a lot of being able to learn while doing as well. And it's not just the learning while doing. It's also the ability just to be able to see what you're doing and see if the things are going the way that they're supposed to be. And if you don't go into it with that mindset, you can, a lot of times, get caught in traps of repeating things that have gone wrong in the past. So the first big barrier again is education, which thankfully there's tons of information that's out there nowadays.Jonathan:I mean, people that are listening right now are receiving information about the business of dentistry, so to speak. And so you're learning a little bit about this problem. If you highlight it, if you address it, then you have a chance to overcome that challenge. So the education piece is the first one, is the first big part of it. Add into the fact that in dentistry, you also get tons and tons of debt for the education that gets you to be skilled enough to be a person to do dentistry.Joseph:Wait, wait, wait, wait, wait, wait, wait, wait. So you're telling me you got to go into debt to become a dentist.Jonathan:Oh yeah.Joseph:That's not something that the federal government just writes checks for that?Jonathan:Everybody's really big public health, but we're not that big on it. So much so that the taxpayer money goes towards paying all the student loan debt off for all those dentists out there. Yeah. There's horror stories of people getting out of dental school with a million dollars in debt.Joseph:What? A million dollars for school?Jonathan:Yeah, just for school. Dave Ramsey, if you've ever listened to him talk to dentist on the phone, he's always just completely perplexed by the fact that, that's a possibility. So, that debt is really kind of probably the second biggest challenge is that you're going to have debt for school. You're going to have debt, because you're alive in 2021. And you're probably going to want to have a home if you're in certain areas of the country. You may end up having a car. You may end up having, if you have children, you probably have school. You may have childcare that you're paying for. There's so many things that just stack up against you in terms of your cashflow going out the door on a personal level, none the less, the business level. Everything is kind of stacked up against you in the very, very beginning.Jonathan:And that's before you get to the business side of things. The way dental school happens is there's tons of dentists that get out of school and they're already married and have two or three kids and by the time they're working their first job, just because of the way that the age range works. And so sometimes we even have the spouse's school on there as well. A lot of the times we have dentists that are married to other dentist. That's before you get to the business side. Now, if you get to the business side, your choices are typically to go work somewhere else as an associate, hone your chops for a little bit, get better at producing and things like that. Or learn a bit more about the industry and the real dental world or you can go and become a business owner at some point in time.Jonathan:Most people probably give it a year or two out of dental school before they jump into practice ownership. I think that's generally good advice for the majority of people. Get out there, learn on somebody else's dime for a little while, while you're getting some cash flow in the door. Getting things set. There are dangers around that, because you might get a little too set and you might start getting a little too comfy, not having to do some things, but at some point in time if you're listening to this podcast, you've probably made the decision or have made the decision in the past that you're going to be a practice owner. And so if that's the case, then you're going to have more debt. It's more business debt, which is-Joseph:Wait, they don't give these practices away. They don't just like, let you come in and just take over for free?Jonathan:Yeah. Like I said, we're big on public health in this country, but we're not big enough just to help people pay for getting their dental practice up and running in the areas they want them to be ran in.Joseph:Is it even possible for them to save up cash? How much cash would I have to save up to not have to take out debt for buying a practice? If I just wanted to say, you know what, I'm going to work my tail off and I'm going to save up, how much cash would you think that I would need to save up to even start that process?Jonathan:So we've had people do it and we've had people that they're like, I'm going to wait five or 10 years until after I get out of dental school to start my practice, because I want enough cash. I'm going to live frugally for five years, 10 years, and I'm going to be debt free and I'm going to start this practice and it's going to almost be all cash almost. If you're going the startup route, then I would say budget at least 300 to $500,000. Your market may vary, your practice style and philosophy may vary. A good friend, Jayme Amos with Ideal Practices, how to open a dental office.com. He does startups and they do hundreds or at least a hundred a year. And I've heard them speak on the topic.Jonathan:And they're like, it just kind of depends on, do you want Cadillac brand things? Do you want the Honda brand things? Or do you want the, or sorry, it's like Tesla, Cadillac and Honda. Which of these different choices do you want to have in your practice? And it kind of just depends on your style and your brand and your vision for your business and things like that. So that 300 to $500,000, it's a wide range. Now, if you're going to go buy the real estate that goes along with that, it depends on the real estate process in your area. In Lepanto, Arkansas, a dental practice office, the building is going to cost you probably 150 grand. Whereas if you're in New York city, you were looking at 150 million or something like that. It's a big difference on the real estate.Jonathan:Yeah. So, more and more debt comes up, more and more. If you end up buying a dental practice, it very much depends on what type of practice you're buying. My kind of sweet spot, I feel like most people get into in terms of the buying of the dental ... of acquiring a dental practice. They're usually paying somewhere between 600 and 700,000. Well, that's a little bit too narrow of a range. Probably 600 to $800,000 for a dental practice. It's a one owner practice that has a bunch of patients and they're not doing a whole lot of dentistry.Jonathan:And that's kind of like the ideal situation. So, if you're going into business debt, and then it depends on what all types of upgrades you need, what type of equipment they have and all those other types of things. So, on the safe side, I would say minimum 300 grand to be upwards to anywhere towards a million for the business side of the debt. So [crosstalk 00:12:54] those are numbers ... Yeah. You add that all into the personal debt stuff. And you've got this big mole hill you got to climb up in order to be able to start getting to break even. It's one of these really unique industries where you start with a huge negative net worth.Joseph:We're talking about net worth, what does it even mean to have a negative net worth? What does that even mean?Jonathan:So, whatever your assets minus your liabilities are, is your net worth.Joseph:Okay.Jonathan:So pretty much, and this is, I think it's fairly unique to the US, but pretty much every college graduate starts with a negative net worth in this country.Joseph:Meaning if I add up my car and my bank account and then I take out of that my student loan debt or credit card debt or whatever, I own less than I owe.Jonathan:Exactly. Precisely. If you own less than you owe, which is a great way of saying it. Let's say that you've got a $250,000 house, and you've got $400,000 of student loan debt and $50,000 in credit card debt. All of a sudden, you're up to $750,000 in debt, and you've got $5,000 in your bank account. You've got negative $745,000 net worth, is what your net worth is.Joseph:Would you say that it's common, Jonathan, whenever people are either thinking about going into practice ownership or that they do start and go into practice ownership? Is it pretty typical to see a negative net worth at that point in their career?Jonathan:Yeah. I mean, I would say that's more common than not. And that is something that stacked up against you, but I want to make sure to make the point that people need to understand that debt has different types of meaning. So, if you're buying that dental practice that I was talking about 600, let's call it $750,000 that you paid for a dental practice that had an ample patient base, plenty of production to go around, you're going to be able to turn that thing into something. It's going to be able to generate a return of 350 to $450,000 a year, that you're going to be able to take home. Yes, you're taking on debt, but you're taking on debt in order to be able to attack the debt better. It's an investment.Jonathan:And it's an investment with an extraordinarily low interest rate based on the interest rates as of today's recording. So, that's not ... Ooh, debt bad is what a lot of people like to say nowadays. There is such a thing as leveraging other people's money to be able to make your debt go away faster, which is what I'm talking about whenever you buy a dental practice in order to be able to attack that stuff better on later. So, that's an important distinction I want to make, because I don't want to gloss over ... I don't want people to be thinking, oh, I'm going to have $1.5 million in debt when I start my business day one, but that's like an insurmountable number to get around.Jonathan:It's really not. Because if you think about it in terms of net worth, not only is that ... So you use that debt and you've acquired that practice, but as that debt is paying itself off, you're not building equity into that business, as well as receiving a cash flow from that business. And so you're getting both of them. And yes, there is interest payments going on and things like that, but we've got plenty of clients that have paid off their business debt within five years of being a practice owner and their student loan debt as well. Just because they got in and they didn't really have a lifestyle change and they went on and just paid everything down. So, that's the big second one. So the first one is education, the second one's debt. And it's impossible for us to not talk about debt as being a big challenge that people have to get over.Jonathan:And funnily enough, to me, the solution of getting out of the debt is to take on more debt, which is maybe counterintuitive to some, but if you-Joseph:It doesn't seem like it should make sense.Jonathan:I know, right. But from a math based perspective, if you're in flow doubles, but your outflow grows by 2% or 5% you're going to be able to, once that debt amount is gone, that 5% goes away. So it becomes worth it because your inflows are going to be more valuable than your outflows at that point. There are some people that I've spoken with that have been making a lot of money as an associate. It's fairly rare. Pretty rare that I talked to somebody who had a really great gig as an associate and could make as much as a lot of dental practice owners make, but those gigs do exist. It's just, you got to be a really high producer and get a really, really good position with a really great practice in order to be able to have that be a reality for most.Jonathan:So, anyway, so yeah, so those are two of the big challenges. The other challenges are, is just the, once you begin the experience. So, let's talk about that. Let's get past the decision to become a practice owner. Now, you'll say you are a practice owner, and now there's a problem with the fact that you've never ran a business before. And this happens to everyone. And I want to circle back to the original part of the conversation, talking about how we had business training. Just how many people do we know that went through business school that never owned a business. I mean, would you say it's, in all honestly, it's more than 90% of the people that we've probably graduated with do not own a business.Joseph:Yeah, for sure. Yeah. I think that's a good number. Don't own a business, haven't owned a business, won't own a business. They'll always be sat in the back of a paycheck instead of front of one.Jonathan:Yeah, exactly. So, that education piece isn't everything. I want to just hammer that point home one more time. But once you start that experience of being the business owner, I find that the challenge is that a lot of the times you tend to just do what has been done in the past, especially with the acquisitions. One of the biggest challenges I see people have is that they become a new practice owner and they kind of just fall into what everybody was doing in the past. They just kind of keep doing it and they don't really change.Joseph:Well, it's easier right? It's easy.Jonathan:That's exactly, exactly. Even in the CPA world, a lot of the times, people would just do what they did last year. That's kind of the rule is they call it Saly, same as last year.Joseph:Saly? Yeah, Saly. Say, you do it the same.Jonathan:Exactly. So, in dentistry you'll get into a new place and they have this pegboard system, they haven't gotten those computers yet. Everything's on paper. It works, so they don't want to break it. And some people, most people nowadays don't, but some people will fall into the trap of just being like, well, I don't want to rock the boat. So we're just going to keep doing it, how it was done in the past. That's an extreme example, but that goes down to the minutia of like, this is how we've done it in the past. And so people get stuck into these trends or this idea that the way it was in the past is always going to be the best.Jonathan:And in business, especially in today's day and age, you've got to be willing to adapt. You've got to be willing to do things better. You got to be willing to work on efficiency. You've got to be able to understand that a business is like a machine and it constantly has to be oiled. It constantly has to be tweaked. It constantly can be better. Now, there is an idea, and there is a concept that you could argue that at some point it's not worth it to continue or at some point, you just let it run. But in general, most dentists are going to probably lean on the office manager that's been there forever to learn about how to do AR. And you'll hear about it all throughout the industry and in newspaper reportings or anything like that. Office manager steals $300,000 and embezzles from in the office or whatever it is.Jonathan:And so there's dangers in that. And so, you've got to be learning while doing. So it's a challenge, but it's something that I think that dentists can overcome. I know that most dentists can overcome, because they've gone through dental school and they've got their really hard curriculums and so they've learned. They know how to study and hopefully know how to learn. The problem is, is that that experience comes along with some pretty hard work. And in most businesses, in a lot of small businesses, the owner does, the owner works too. In dentistry, if you're open 36 hours a week, you better hope you're doing dentistry for 36 hours a week.Jonathan:Not learning about how AR works or how the practice management works or handling the computers went down or talking to the IT company or sending an email to your CPA, because they've asked what a couple of transactions were that came through your bank account. Or listening to a CBS or something like that, because there's a new stimulus bill that's coming out that may affect you or may affect your employees or talking to vendors or all the other things that come along with it. There's so much work to be done in the dental space. And so little time to do the business stuff. You know, I admit it, I was one of those people that was like, man, being a dentist would be really cool. You don't have to work on Fridays. They're only open four days a week.Jonathan:And then I got into the industry and I was like, man, that is the biggest misconception maybe in the general public. And that is a danger and don't get me wrong. That's a challenge. Some dentists probably do it that way. They're so exhausted on that fifth day, they go home and rest. But especially in the beginning stages, you got to be willing to start learning about what's going on and adapting and changing and doing things better. So that's another giant challenge is the experience of learning while doing, and having to work while you're doing it. Because literally, if you're not working and doing the dentistry, you're not making any money. And so all those other challenges are going to rack up on you.Joseph:Would you say, Jonathan, that it's pretty typical or not typical for a dentist to have either a half day or a whole day dedicated to CEO day? Is that something that's pretty typical that you see out there? Or is that something that's kind of atypical?Jonathan:I feel like people are trending away from it. So I feel like the pressures of the day, or getting to, well, there's another half day at capacity I could add on there, if I just did dentistry during that half day. And so that does tend to happen in really busy practices, where they're like, well, we don't have any more capacity during the day. So I don't really want to add an associate. I don't really want to add more chairs, so what if I just add hours? And so that gets taken away. But yeah I would like to see more of that in a lot of our clients.Jonathan:I'm not saying that it's not prevalent. Like, it is very common for practices to be open four days a week, incredibly common and not the fifth. And the fifth is hopefully the CEO day. What does tend to happen is over a couple of year period, eventually that CEO day starts becoming a, every other week CEO day and then it becomes in every other month. And then it's like, well, I'll look at this once a year type thing. So yes, I do feel like it's trending away.Joseph:Well, let me ask, I guess back to the CEO day. So if we're talking to a brand new practice owner and they say I think I'm going to have a CEO day. What are some things that you think would be like the best use of their time in a CEO day? And we don't have to get into specifics. We can certainly get into specifics in later episodes, but as you have a day that you dedicate to being the CEO, whether that's a Monday or a Friday, or I have a couple of clients that do it Wednesday afternoons they carve out as their CEO time. What's the best use of their time, would you say, whenever they carve out the time to be at the CEO day or CEO half day?Jonathan:Yeah. That's a great question. If I were in the shoes of my clients, what I would do is I would have, on my CEO day, I would have kind of like my little things pile, which is like you get something in from the Arkansas dental board and you need to respond to it or something like that. Just something that is like a, you got to pay your license review or something like that. You've got your AP, which is accounts payable, which just means your bills are there. You need to take a look at, your office manager has already prepared all the checks for it and if the checks are attached to the invoice, which is attached to the bill, whatever it is. And you're looking at those real quick, signing them off and you just have your little pile of little things that you get done, probably takes you 20 minutes to do all of them and it's done for the week.Jonathan:I wouldn't let those little things pile up. I wouldn't let those little things be things I try to hit while I'm going through the week, because it would just distract me from the rest of the business and the dentistry to be done. That'd be kind of the first thing that kind of just knock out and get some wins in. The next thing I'd probably have any type of employee issues. That would be something I'd be looking at during that timeframe. So any issues in terms of, if there was anything going on with an employee that I needed to address. Training, any type of education that I need to get or anything like that would be what I would be going for. And then finally, and probably the most important thing would be, I'd be thinking about strategy and a bigger concept.Jonathan:What is it that we're doing here in terms of our overall vision as a practice? What is it that we're trying to accomplish and how are we going about doing that and what have our results been? And then I'll be working on goals that our company could set. They could be actionable and achievable and then tracking the progress of those. And that's what I would be doing in my CEO day. What about you, in terms of working in a bigger medical company, what would be something that you saw your CEO do that was effective or things that you did in the CFO world?Joseph:One of the things that they always did that I always wanted to do weekly was look at the numbers. So certainly, if we have a meeting every Wednesday, that was when I got to visit with the CEO, one of those would be reviewing the monthly results. You're obviously not going to review the monthly results every week, but one of those four meetings would be review and how did we do for the month, the prior month? And how does that stack up to the prior year? And then there would always be something else when it had to do with the numbers, either a vendor contract that came through or an opportunity to purchase a piece of equipment or opportunities for different types of discounts or different ways to do things.Joseph:One of the things that that CEO always wanted to do was they always wanted to know where the numbers were. And we got to where we created this dashboard that also helped them understand where the cash position was. And we did that on a weekly basis. If we take our cash in the bank minus our outstanding credit cards, how much cash do we have today versus last week versus the week before? And then we got to a point where we felt like that number needed to be whatever it is, pick a number, 50,000, a 100,000, 200,000, whatever the size of the business is. Obviously if your accounts payable weekly run is $300,000, then you don't feel comfortable with $50,000 in cash in the bank. So each business is different, but those are the things that our CEO was looking at every week and alongside the other stuff that you already mentioned.Joseph:But I think one of the things is that you've got to have time as a CEO to sharpen the saw a little bit. So Stephen Covey in The 7 Habits of Highly Effective People talks about spending time. If you had to chop down a tree, he'd spend seven hours. If you had eight hours to do it, he'd spend seven hours sharpening the saw, and then one hour actually doing the work. So spending time to sharpen the saw for your practice. I think that's something that I've seen really, really good CEOs.Joseph:And I mean, as you and I we're sitting here trying to run an accounting firm here, and it's very, very easy as you know, to get caught up in all of the day-to-day stuff and delivering client care. How much time do we actually spend getting a chance to take a high level view? And that's something that we've had to as a firm, me and you and the leadership team, we had to get together and say, we need to carve out some time to actually talk about all the stuff that's going on and really work on the business rather than just in the business.Jonathan:Oh yeah, absolutely. Yeah. I completely agree. And so we'll talk a little bit more about little strategy piece and what we think you guys should be listening to, or should be considering in terms of strategy. From a business and financial perspective. We are not dentists. So we're not going to be able to tell you, here's how you should do your treatment notes so that you have really accurate notes for all of your patients, because we don't know what that is. We just know that they exist and I've heard other people talk about them. And I know that those are the things that are out there, but we'll talk about it on a level that makes sense from a numbers and business perspective. Joseph, is there anything else you can think of in terms of challenges that I may have missed?Jonathan:Again, the big ones to me is just the lack of business education, which I hope I've highlighted that it's an issue, but it's not the biggest issue out there. The giant amount of debt that comes up with that. And then the fact that you have to learn while doing and working. Those are the three biggest challenges to me, for people that have never owned a business before and are going to becoming a business owner in the dental field. Again, I'm not including the challenge of overcoming the mental barrier that you need to be a business owner. I feel like that may be a different topic altogether.Joseph:Sure. Well, if I wanted to add number four, I would say that oftentimes a dentist will walk into a new practice, not have ever led a team before. And that certainly is a challenge that you're going to walk into an office, and there are going to be five to 15 people that are all looking to you for leadership. And that's something that we'll spend some time on, for sure, inside of this podcast is kind of developing and honing your leadership skills and how to have those different conversations, how to lead your team well, what is it that motivates people? How do you make sure that you're supervising well and doing well, because at the end of the day people want to work for a good place.Joseph:They want to do something that makes a difference. And all of that really boils down to your individual leadership skills as the CEO, as the head clinician, as the practice owner. So I would add number four and say that's one thing that is vitally important. And as you and I both know the ones that we see the most successful practices are the ones that have a really good leader at the helm.Jonathan:Oh yeah, absolutely. And it's not just leading the employees, it's also leading the patients and your community and everything else that goes along with that too. Yeah. That's a great point. So, and one of the harder things for me in terms of leadership and I've been open with this with my team is that whenever you're thinking about being a practice owner, and you're thinking about all of your employees and things like that, you're thinking of it in more in terms of that machine that I was talking about. You're thinking more in terms of like, okay, I pay them money and they do their part. And that transaction is it, that's all it is, but there's so much more to it than just paying a paycheck. Because if you're just paying them a paycheck then all you're going to get as someone who's there for a paycheck.Jonathan:And if all they're there for is a paycheck, then their time there will likely be fleeting. Lots of really good topics we can talk about in terms of that. And employee engagement and leadership and everything like that. We'll get to you in a future episode. So, yeah. So great talking about different challenges that new business owners that have never owned a business before in the dental practice industry. Is there anything else you want to end on Joseph?Joseph:No, that's great. No, I'm looking forward to doing this with you. Lots of great nuggets inside of that conversation, for sure.Jonathan:Well, thanks so much, guys. We will see you on the next episode of the Tooth and Coin podcast, and I will see you all later.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country. We'd love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners. So people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up or has become an owner in the past five years. That is our specialty.Jonathan:And we'd love to be able to talk to you about how we could help you in your services with your tax and accounting services. And if you enjoyed today's episode, again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the long term. Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444. Apply with your email address. We'll send you the instructions in the Facebook group. We'll send you the resources when they're available, and we will see you next week.

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth & Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific, but we hope that these episodes help you along with your journey.Jonathan:Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid task or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share. Join us in the Facebook group. If you go to Facebook and you search for Tooth & Coin podcast, click on it to join it and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that, whenever it becomes ready, all you have to do is text the word toothandcoin T-O-O-T-H-A-N-D-C-O-I-N to 33444.Jonathan:Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address and we'll email you instructions on how to get into a Facebook group, as well as add you to a list to be able to send you those resources when they're available and if they're available, we'll go ahead and send them to you as well. So onto today's episode. I hope you enjoy it.Jonathan:Hello, ambitious dentist. So today we are talking about the CFO role in dental practices. One of the things that I talk to about, a lot of dentists about throughout all of my conversations is what a CFO is, what they do, how they are aligned with your business. Do you even need one? I'll be honest with you. There's a lot of confusion in the dental industry around the function of a CFO, what CFOs do and is your CPA your CFO? Is that who it is?Jonathan:There's a lot of misconceptions about it and Joseph and I are going to talk about that today. So if you didn't listen to the first episode, this is episode number two. On the first episode, we outlined a bit about what the podcast is going to be about. In this episode, we're going to talk a little bit more about that CFO role and what it is, how it works and things like that.Jonathan:Joseph was actually the CFO of a medical company that was in the services space and had a lot of success. Seeing that business go from around $3 million a year in revenue upwards to almost eight figures in revenue. So he's got a lot of insight to this and I'm going to be asking him and interviewing him on this topic. So Joseph, why don't we start with that. Let's start with what is a CFO and what do they do?Joseph:Great question. Thanks. So when we think about different roles inside of the organization, I think most people are familiar with a CEO and could probably even tell you what a CEO is, a chief executive officer, and you may have heard terms thrown around like C-suite. When we talk about C-suite, what we're talking about is all of the team leads that have C at the beginning of their name.Joseph:So you may have a CEO, you may have a CMO, a chief marketing officer. You may have a chief operations officer or COO, you may have a chief compliance officer. So the CFO is the chief financial officer of an organization. So I think that's first and foremost, as you look at the traditional C-suite has three seats, a CEO, chief executive officer. Basically the one that is spearheading everything, the CEO has the vision. They typically are the owner of the practice, owner of the deal.Joseph:You're going to have a chief operations officer. So somebody that makes sure that the operations of the company are out there and then you've got the chief financial officer who are making sure that all of the money works. That's as simple as I can break it down. What are your thoughts when you think about what a CFO is, Jonathan?Jonathan:Same. The financial side, the F in there which obviously stands for financial, not the other F, it is there to talk about money. It's talking about the numbers. Talking about the ways in which that business has measures and manages its money in terms of the way it's coming in and the terms of the way it's going out. Definitely that's what most people think about when they think about CFOs. What I find in small businesses though, is that there's not always room for a CFO. So the owner usually takes on in smaller businesses.Joseph:I think first and foremost, you got to have cash to run a business. You can't pay payroll on an IOU. So at some form or fashion, you've got to have somebody that is managing cash. So that is cash that comes in the business. That's cash that comes out of the business, that comes in and goes out lots of different ways. It may come in through a line of credit, a beginning working capital draw.Joseph:It may come in through patient sales and collections. It may come in through credit card transactions, and then it's going to go out by writing checks, paying credit card bills, paying employees, all of those different things. So first and foremost, a typical owner of a small practice is going to be the one that's making sure that the cash comes in and the cash goes out. At the basic, most simplistic level, that's the first role that people are doing.Jonathan:I agree. Usually the person who is the owner or ends up being the dentist, they basically have to be all three of those things. They've got to be the CEO, they've got to be the COO and they've got to be the CFO. In that CFO role, they've got to make sure that the money going in and out is going to the right places and that there is something to manage and there's things happening.Jonathan:So it's this unique problem that is in the dental industry, that you have to be all of these things in this organization. Now, pretty much every small business has that problem. Obviously I'm the CEO, CFO, COO of Tooth & Coin but I have other people that help me with those things, but I haven't always had those people because we haven't always been as big as we've had.Jonathan:So we've had to grow people into those positions as our company has grown and evolved and things like that, but in terms of that small dental practice owner, you mentioned you got to have cash and you got to move those things in and out. What is it that you see in the dental space, being the dentist are doing, maybe even unknowingly as CFOs? What is it that they're probably, whenever they're thinking about their practice at night, they're probably doing in terms of like what a CFO would normally do for you?Joseph:Great question. So I think that a lot of them are trying to figure out top line revenue which when we talk about top line revenue, what is the amount of services that have been delivered? We can measure revenue a couple of different ways. As someone comes in the practice and as they get a treatment and they get a cleaning, they get an exam, once that service has been performed, you are owed that money.Joseph:So that could be one way that we measure revenue. One of the ways that you can pull that out is pull that out of your practice management software. So they're trying to get an idea of how much revenue is generated. So the next piece of that, that I think that a lot of practice owners are looking at is how much cash is coming in the door?Joseph:So there are certain times that 100% of the service that you provide turns into cash the same day, or within a couple of days, if somebody writes you a check, brings you cash or pays with a credit card. So there's not often a lag time between those. What is most common is that there is a lag time between when the service is performed, when the revenue is generated and when the cash actually comes in the door. That's where there's often a difference in timing.Joseph:That timing, if you've got a great front office billing person, that's billing and pushing claims out the door, that may just be five days between the time we send it to the PPO insurance company and the time that an EFT shows up into our bank account. We may have patients that are paying us out a month to month to month.Joseph:We may have somebody that pays in full with care credit, or with a credit card that turns into money in the bank account within a couple of days. So all of those things, I think that small practice owners are trying to get their arms wrapped around all of these different things as money comes in the door, as revenue is generated. Then what they're trying to do is they're trying to figure out, okay, did I make enough money this month to pay rent, to pay my people, to pay my supply bill, to pay my lab bill, and hopefully to pay myself?Joseph:So if I'm set up and I've got payroll running out, hopefully I've generated enough cash coming into the practice to cover all of those expenses. Then at the end of the day, whatever is left over, it depends on who you talk to, but we'll just call it profit. Profit is the simplest way of doing that. As the money came in and the money went out, do you have more money in your bank account today than you did 30 days ago? Then I would call profit.Jonathan:So try and get some type of an understanding of how they're making money in practice from revenue to expenses, and then eventually paying themselves and profit and things like that. All within the responsibilities of that dental practice owner, who also is generating production and revenue every day, and managing employees, doing the marketing, doing all the different things that go along with their business. So, with that in mind, what was it that you saw whenever you went to your ... When you started your role as a CFO?Jonathan:Again, I could see many of my practices, and many of our clients here at Tooth & Coin are having the same issues as the business that you got into at the time that you got into it as the CFO. Around that $3 million in revenue mark, you got a lot of practices that are around that level, half a million, a million, 2 million, 3 million, but $3 million mark.Jonathan:They get to be pretty busy in a small business. So what is it that you saw whenever you walked into that business in the first day in the role of the CFO, that really just hadn't been done that needed to be done from a CFO perspective. Because again, that owner of that business couldn't do everything. There's just no way that you could have that type of skill set to be able to do everything on your own.Jonathan:There's a reason there's a million employees at Bank of America. The CFO there is not ahead of every financial element. The CEO doesn't do all the COO and CFO and all the other roles and things. There's reasons why there's more than one person doing all of these things. So what was it that you walked in at day one, your becoming a CFO from the smaller medical business to grow into where it was?Joseph:Sure. I think the first thing I noticed is the wild swings and cashflow. It wasn't a matter of, we had the same exact amount of money that would come in every month and every day and we were pretty product heavy. So we had to spend quite a bit of money to provide these specific devices and services before we ended up actually delivering the service. So as you're paying your lab bill, as you're paying your supply bill, there's all these huge outflows that go, and they don't always match up with your revenue perfectly.Joseph:So I would see these wild swings in our cashflow. So, as an inquisitive person, if you see wild swings in the cashflow, the first question you're going to ask is why. So the first question I started asking was, "Well, how do we get to deposits into the bank account?"Joseph:Well, insurance companies write us checks, patients write us checks, we take credit cards, all these different things. That's how money turns into the bank account. I'm like, "Okay, well, how much did we generate in services last month, for example?" Okay, we'll pull the rapport and we got all the billing done. We got all the services delivered and we would pull the report and they'd say, "All right, well, we did 300,000 this month. That was a great month."Joseph:I was like, "Oh, okay. Well, what kind of service was that?" "Well, we did 300,000 this month." I was like, "No, no, no, no. Like specifically, you've got eight lines of business here. How much did you do in each one of those?" They're like, "Well, we can think of those couple of big ones that we delivered. I know that our shoe business was big. We had some big shoe," but it was very clear early on that they were not measuring revenue by line items.Joseph:So when you translate that to the dental practice, it's like, well, how many cleanings are you doing? How much hygiene are you doing? How many crowns are you doing? How many are you doing that are implants? It's like, the first thing that you've got to do is you've got to measure what specific revenue pieces you did in each month. So, if we're looking at the month of January, I'm going to say we did X amount on this, X amount of that, X amount on that. Then we as accountants, what we like to do is we'd like to compare.Joseph:So I came in and said, "Okay, well, you did 300,000 this month. Well, what'd you do last month?" "Oh, we'll have to go back and rerun that report. We don't remember what we ran. Oh, but we remember that May, of last year was a really, really good month. We should run that month." So it became very clear and apparent that they weren't measuring how the practice was doing month by month by service line.Joseph:So that was the first thing. So the first thing I did is okay, why don't we categorize our sales? Why don't we just make it simple and just have three or four different big buckets of sales that are all kind of related and we'll just measure those specific line items, rather than trying to do some kind of procedure code, because the healthcare practice that I was in, we had a thousand different procedure codes. Some of them were the big numbers and some of them were the small numbers and there's all these add-on codes for these additional things.Joseph:So it's like, I don't want to look at a revenue by code line item because I've got a thousand codes that we use in the course of the month. Why don't we break that down and summarize that into three or four different ones that we can measure? Why don't we look at that for this month versus last month versus the month before, and let's figure that out. So the next thing that I figure out, I get in there and I'm like, "Okay, so that number of 300, tell me what that number is? What makes up that number?"Joseph:They pulled it up and I started looking at the individual patients that made up that line. It became very clear that what they were calling revenue was usual and customary. We may refer to that in the dental world as the UCR, the usual and customary rate, or you could just say, that's your general fee. I said, "Okay, well, of this 300,000 that you generated in revenue, is that going to be what turns into collections in the bank?"Joseph:They're like, "Oh no, no, no, no, no. Insurances, they all take their discounts." I'm like, "Okay, well, that's probably where we need to start measuring revenue. We didn't do 300,000 revenue. We did much less than that. So let's come up and figure out what's the allowed charge." The next thing that I figured out is that whenever I went into the allowed charge, they had taken a standard discount off of everybody.Joseph:So we had, in the business that I was in and we had the Medicare allowed fee. So basically what they did was they keyed in the Medicare allowed fee for every single patient that came through the door. What's the problem with that? Problem with that is not every single patient is on Medicare. We've got Blue Cross Blue Shield, we've got Humana, we've got UnitedHealthcare. We've got TRICARE, we've got a number of these different ones and I'm like, "Well, how do we know what Blue Cross is going to pay us whenever Blue Cross comes in?"Joseph:They were like, "Oh, well, we just adjusted off the EOB, or the explanation of benefits whenever it comes in." I said, "Okay. So what you're telling me is whenever we've measured that revenue, we measured it at the Medicare allowed rate, but we're not going to make an adjustment for the Blue Cross rate until next month when they pay the claim or next week when they pay the claim or whenever they decide to pay the claim?" They said, "Yeah, that's what we do. That's when we adjust it."Joseph:I said, "So this $300,000 number is not a real number. The $250,000 is not a real number. So why don't we drill in and figure out, well, what are our contracted rates for all of these different insurance companies?" And as you can imagine, Jonathan, they were all different. Blue Cross had a certain percentage off of the Medicare allowed, United had a certain fee schedule that they had determined. TRICARE had something different. We had a workers' comp that would take a percentage off of our usual and customary rate.Joseph:So one of the things that I've always subscribed to is the Pareto principle or the 80/20 rule. So I was like, okay, why don't we 80/20 this thing. What 20% of our payers make up 80% of our revenue? So obviously to go through, we had hundreds of contracts. To go through hundreds of contracts and trying to get all of those fee schedules immediately ready, that would have taken months.Joseph:So I was like, why don't we just take the top 20% of our payers, the ones that pay us the most money and why don't we go ahead and make sure that that is correct inside of our billing software so that we were able to get to an allowed fee. The other thing that I figured out was that the Medicare allowed fee changes every year. Some years it goes up, some years it goes down. I'm like, "Well, what's that Medicare allowed fee?"Joseph:They were like, "Oh yeah, we loaded that in a couple of years ago." I'm like, "Okay, we should probably upload the current Medicare allowed fee. We should probably upload the current Blue Cross Blue Shield fee." Because one of the things is that as your accounts receivable people have money that's coming in the door and they have an EOB, we should know and expect to know what Blue Cross is going to pay us for this specific client, for this specific line item and if they pay us different, we need to know about that.Joseph:We need to investigate that, we need to follow up on that and say, "Well, is it because they paid us incorrectly? Is it because this is a Tennessee Blue Cross Blue Shield versus a Texas Blue Cross Blue Shield?" What are these differences that are inside of this? So I think that was where it first started was we need to start measuring revenue.Joseph:We need to start measuring revenue. We need to record it. We need to be measuring it month to month. We need to figure out what is revenue and it's obviously not your usual and customary. I was having this conversation with the dentist the other day. I said, "What was your production for the month of January?" She said it was $30,000.Joseph:I said, "Okay, well, tell me more about that number. What is that number?" She's like, "Oh yeah, that's the UCR." I said, "Okay, you understand that the UCR is not what your insurance company is going to pay you that you're in network with?" She was like, "Well, yeah, that's not the right number." I was like, "Okay, well, the first thing we need to do is we need to figure out what are you generating."Joseph:Because her question to me was how much can I afford to spend on you know, this next thing or this next loan, or can I hire another employee or can I increase my salary? Can I take a draw? Is my rent too high? She started asking these questions. I said, "Well, the first thing we got to figure out is how much money is coming in the door and how much revenue is coming in the door."Jonathan:There's usually a reason that revenue is the first thing on a profit and loss, because it's the first thing you're supposed to be able to know about. I find a big misconception inside of the dental space is that the CPA equals the CFO. When I try and tamper expectations with all of our clients is that, look, there is a lot more to revenue than just that first line item. Whenever you file a tax return, you file income. Sometimes you have a cost of services or whatever it is that you put down there as well, but revenues is a one line on the tax return, but it's much more than that. So would you say that's a fair statement to say that one of the jobs of the CFO, one of the responsibilities of small dental practice owners in their role as the CFO is to understand their revenue?Joseph:Absolutely. I think that's got to be where it starts. It's got to be where it starts because we got to understand ... So we've got to put expense models together and figure out how much we can afford based on our revenue. Obviously your revenue is going to fluctuate month to month, year to year. I'm looking at financials in January. Financials in January look a lot better than December. Why is that? Well, we took a week off for Christmas to New Year's.Joseph:So January, we worked full month. February will probably be shortened because we've got crazy snow storms that have hit the United States and people have been shut down for a week. So there's always going to be some fluctuation of revenue, but it's got to start with that. So then if we can figure out, well, what's a general rolling average that we can forecast out for revenue, then we can break that down per month and we can say, "Well, what did we do in July of last year?"Joseph:"Well, July is always a great big month for us, but it never is quite as big as August. August is so big because the kids are coming back to school. They want to get all their dental work before they go back to school. So August is always a big month in dental. March is always a big month in dental because of spring break."Joseph:So then we can forecast that stuff out and understand what our revenue's going to look like so that we can build our expense models based upon that. I think that's a big thing for CFOs is, people like to talk and use the word budget all the time. They're like, "We need a budget."Joseph:I'm like, "Well, we need a forecast is what we need." How many patients came in the door last month? How many of those were new patients? What percentage of that? What was the percentage of each one of the different service line items? So can we expect that to come back? If it's a hygiene client, are they going to be expected to come back in six months?Joseph:Well, we had X amount coming in January. That means that we know that we're going to get a certain percentage of those to come back in July and we can look and compare that and say, "Okay, well, what percentage of hygiene clients actually keep up with every six months?" Okay, well, it's not 100%. We wish it was 100%, but it's not 100%. Is it 90%? Is it 80%? Is it 50%?Joseph:Well, if it's 50%, we've probably got some things that we need to work on with our front office staff to make sure that we're confirming appointments, whether they were doing all the things that you guys know that we do in order to make sure that people are coming in for their six month checkups, but we can start forecasting and start getting a picture of what things are going to look like from here on out.Joseph:We can say, "Okay, well, if revenue, this month is $30,000, but our goal is $50,000 and we know that we're projecting that next month is going to be $40,000, we know that we've got 10,000 that we got to make up. So where are we going to make that up? Is it going to be new patients?" All right. So let's say that it's going to be in new patients. How many new patients do we need? How many of those are going to be hygiene patients versus emergency patients versus some more complex procedures that we're running specials on?Joseph:So these are all the things that when you try to get a handle on your top line revenue and get a handle of the money that the business is generating, these are things that are all going to project out so that you figure out what you're going to do money-wise moving forward.Jonathan:So you mentioned a lot of strategic game plan that was coming up. To me, it's like, step one, understand revenue. Step two, create a baseline of what it is we know is happening currently and then step three, would be to design some type of a game plan to effect those numbers, to try and create something around those things.Jonathan:So like you said, maybe it's that where we find that our deficiency is in our hygiene recall rate. Do we have enough of our patients coming back in for hygiene after they come in for the first time? Do we have enough people to getting back on the schedule today compared to whenever they come back in the future? Or do we let too many people just walk out with our unscheduled treatment?Jonathan:How many treatment plans did we do today and how many of those were actually on the schedule? Did we have a conversion issue? Understanding those different components after you have a bigger picture idea and understanding of that revenue allows you to start optimizing and influencing those numbers. So is that what a CFO's role is or is the CFO's role to influence those numbers or is it to unearth those numbers?Joseph:So I think it's both. I think a great CFO is going to do both. I think that if you look at the accounting world, one of the things that's tough about the accounting world is we're always looking backwards in time. We're looking at what happened last month, what happened last year. We're generating a tax return four or five months later after the year's closed. So, if you're trying to figure out what you're going to do with your business in May of a year, but you're waiting on last year's tax return to get done or last year's books to get done, you're always looking backwards.Joseph:I think the best CFOs that are out there do a combination of both. Number one, they're reporting the results in a way that'll help us understand the past, but they're also looking at all of the different pieces that we know that are going to happen in the future.Joseph:We're going to take some projections. We're going to make some assumptions. We're going to look forward and try to figure out what is life going to look like moving forward. Then we say, "Okay, life looking forward. If I take the snapshot of it today, that's not where we want to be. So let's figure out where we want to be. Why don't we create some goals around this? Why don't we create a monthly goal? Why don't we create a daily goal? If it's a number of new patients that are coming in, how many new patients should you be getting per day?"Joseph:Then we can start to influence those numbers and we can say, "Okay, we know that where we're at today is X. We want to be at 2X of where we are. What's the plan to get there." So that is where I think good CFOs are able to really, really hone in on a practice and really help you move forward and help you project to the future and make good, smart business decisions and influence those decisions and help your team understand how they influence those decisions.Jonathan:So how would it be, again, this is, this is a question that I get a lot is do you think that a CPA, someone who works as a CPA for a dental practice, that that CPA should be the CFO of that company?Joseph:I just think that it's got to be a lot more granular than that. As CPAs, we're typically reconciling banks daily, weekly, monthly. We're looking at financial statements, we're trying to get everything to tie out. We're doing everything that we can to make sure that the books are right, which is a very important part of your financial picture is understanding what your books look like. But I don't think that CPAs are equipped to be out there and to be in your practice to know like, well, how many confirmation calls did we have on patient schedules today?Joseph:Okay, well, we can track that. We can get it in the software. We can create all these different systems that are out there, and then maybe the CPA can look at that, but I think that that's outside of the CPA's role just because we don't have access to all that. We don't have the boots on the ground.Joseph:Now, if you have a full-time CPA that works in your office, many practices do. Huge, huge practices. Once you get to several, several millions of dollars, you're going to have a controller onsite that's going to help you out with some of this stuff. Maybe they're going to have a CFO on site once they get to that 10 or $15 million mark so that you can do that. But if you're a CPA and you're working with 20, 40, 50, 100, 200 clients, there's just no way that we can project all of that granular detail out in order to to do that and to fulfill that CFO role. That's certainly my opinion anyways.Jonathan:I agree. I see a lot of it because I speak to Dennis every week and it's not uncommon for me to hear someone say one of two things. One being that I need a CFO and they think that they need a CFO because they need someone who's going to help with all of these things. Then we can start digging into it and it's like they're doing three, four, $500,000 a year in revenue. Or even all the way up to say a million to $2 million a year in revenue.Jonathan:I need a CFO because I need someone who's going to do all of these things for me. Completely get an understanding of my revenue, which just for the listeners out there, that means we're going to have to understand your production philosophies, we're going to have understand the way that you view dentistry, the way that you view your patient care.Jonathan:As you dentists know, every other dentist is going to be different. So every CFO is going to have to understand that about you as the provider, as well as any other providers in your office. The way that we do that as data people is, we look at the production procedure code, service mixes, things like that, to be able to see what that looks like, but that's on a very high level.Jonathan:If we were to be the CFOs for you, that would be what we would have to do from a provider standpoint, for us looking at our provider level. What I tell most of these people is, "No, you don't really need a CFO. You just need more production right now. You need more revenue, you need to do more dentistry or have more patients," and that's basically all I can tell you.Jonathan:That's exactly what a CFO would tell you if they were to be engaged with you right now is, "We don't have enough revenue, we don't have enough production and we don't have enough patients." There might be some small problems that that person could uncover, but the amount of money you would have to pay someone to be able to do that, to uncover those problems would be a negative value compared to what they find, because you'd be paying them a whole bunch of money because it takes a whole lot of time to understand all of these elements for every business.Jonathan:While dentistry, yes is an industry and single office owner practices are similar in nature, they're all different. They're all different nuances and things like that and most of that nuance comes from the provider, the person that is doing the production.Jonathan:So I completely agree that the CPA role is not designed around this and the cost structure is not designed around this. If we're charging someone say a $1,000 a month for accounting, bookkeeping, tax planning, tax prep, projections, keeping updated on all the things that are going on in the dental ecosystem from a financial perspective, we don't have the ability to be able to make sure that Susie in the front is entering in the production correctly into the computer. That's not what we're engaged to do. The amount of money that we typically are getting paid for that, we don't have enough time in the day to be able to be helping with those types of things.Jonathan:So it then falls back on the dental practice owner to do those things, unfortunately. So I completely agree. It's, CPA does not equal CFO. I guess that's the point I'm trying to make with that, is that people sometimes think that they're the same person. It's a very specific subset. It's a different skillset, number one, and number two, it's not typically what you're paying your monthly fee for whenever you're seeing these people come in.Jonathan:So I mentioned earlier, there's two things. The first one was the person I'm talking about. They need a CFO and I don't think they really need one, and the second one is that they'll have already had a CFO and they'll be looking for someone new, which is the reason they're talking to me and I'll look at the work that's been done and it's literally just CPA work that's been done. It's not CFO work.Jonathan:So it's what you're saying here. It's financial statement analysis is all that that CFO is doing. To me, financial statement analysis, yeah, your CPA can help you with financial statement analysis. Almost every CPA can do that. I'm asking this to you, Joseph.Joseph:Yeah, absolutely.Jonathan:So every CPA can help you with financial statement analysis. Financial statement analysis is like one line item of things that CFOs do out of hundreds of things the CFOs do. So CPAs can help you with financial analysis, which is the things we talked about. The way that our firm does that is through a management report that we send out every month, where we're calculating out and are rolling quarterly averages and doing overhead analysis and things like that, but that just is the overall picture of the results of the practice.Jonathan:It is not the granular detail of, we did, say, three times more crowns this month than we did the month before. That does not exist on a financial side, on the traditionally prepared financial statement done by a CPA firm. So a lot of times what I'll tell people is lean on these softwares that can pull these data elements out of their practice management softwares, like Dental Intel is really good. Practice By Numbers is really good and they can do some of these practice management data calculations for you, but don't lean on your CPA for those things because we're not traditionally trained for those types of roles.Jonathan:A lot of the times what I tell people is that CFO role, we can find the problems, but we can't usually find the solutions if we're not in that practice every day. So you're paying a lot of money for someone just finding problems. Whereas in this industry, to me, if you're a smaller business, you have to be paying a practice manager consultant to find and fix those problems a similar amount of money. So when is it to you that a dental practice should consider having an outsourced CFO or a CFO and just in general, that is not that owner of that business.Joseph:I think that all the stuff that you're hitting on definitely says to that. So the question is, we're dealing with dentist who are very, very intelligent people. They're all very entrepreneurial because they went out and started their own practice, or they're thinking about starting our own practice and want to start their own practice.Joseph:So they've got that grit and grind about them to figure all of this stuff out. I really don't think that it's something that they can't handle on their own. I think that it really boils down to time. Do you have the time to devote to this? Do you have the resources, the manpower that you've got in your office to help you out with it? At the point where you're doing dentistry five, six days a week, and you're busting at the seams and your schedule's full, that's probably time that you can probably hire somebody else to do that.Joseph:I certainly think a lot of startups can benefit from having an overall plan and just kind of having some goalposts to operate on to help them out with that, but I don't know that there's actually a magic moment where you say, "I need to outsource a CFO." Certainly as the practice grows, if you had 50, 60 employees or more, I think that's kind of like the traditional, that's the point where you need to have a CFO.Joseph:Once you're probably at probably 25 or 30 employees or more, you probably need to have some kind of a controller in place. Another question is like, well, at what point do you have an HR manager in place? Well probably when you get to about 75 employees. So I say that to say like the businesses that you and I work with, almost all of them are single office, two office, way, way smaller than that.Joseph:I think that they'll be able to wrap their arms around a lot of it, maybe with a little bit of coaching and some help on the side from some consultants and some practice analytics, different pieces that they can figure out there and certainly podcasts like ours, where they get a chance to go out and learn, like, what are the things we need to be looking at and measuring?Joseph:Okay, well, this is what we need to be looking at. Let's go measure it now inside of our software. We knew that we probably could, but now we know this is what we need to go look at. So I don't know. What are your thoughts on that, Jonathan? That's a really good question. It's probably one that several of our clients hem-haw around about.Jonathan:So to me, I don't see much of a reason for a CFO on a practice. From a traditional CFO role, I don't see any reason for a dental practice that's doing less than, probably at a minimum, 2 million a year in revenue. I don't see much of her need for a CFO. The money that you're going to pay for a CFO ... If we're talking dollars and cents here, if you're going to have a CFO, that's actually going to do the work that the CFO needs to do, you're talking like at a minimum, outsourced a day a week, maybe four grand a month, five grand a month is what you'll end up paying that person, if you're lucky.Jonathan:So 40, 60 grand a year for, not financial analysis, hopefully it's more than financial analysis, but basically looking for little problems and little tweaks that are going to have ... Let's say it adds a 10% increase to your revenue. That's great. That pays for that, but you got real lucky if that person finds a 10% change. More than likely what they're going to do is they're going to be overseeing stuff and helping set plans and game plans up and things like that.Jonathan:I just don't see that creating that much of an impact on that business. Conversely, you get a really good practice management consultant in there that can help you do a better job with your treatment planning or do a better job of turning nos into yeses when it comes to getting patients to accept care. Then that money spent is going to have a much higher impact on your practice from a dollars and cents perspective. So almost like my best financial advice is to not get financial advice from a CFO until you get to a level where the tweaks can be worth that dollar output effectively.Jonathan:To me, it depends on the practices and things involved. To me, it's probably at the three to $4 million range and about what you said. Somewhere 25, 30 employees. So for example, you hear about these practices and we have a few practices that are similar to this. That could be if expand and scale, but they'll do $2 million, $3 million in revenue and they'll have 20 or 15 employees.Jonathan:So they'll hit the revenue number, but not have as many employees. Those practices, they're probably already doing most of these things already because they got probably really high production per patient. They got really high operatory usage. They got really high efficiency from their employees, probably have really strong protocols in terms of their collections and payments and things like that. So those things are probably already in for those types of offices, but we're talking about is whenever there gets to be a lot of people involved, a lot of revenue and a lot of patients.Jonathan:That's, to me, when optimization starts creating an unexpected value that's high enough to be able to pay someone else to come in and help analyze and optimize and strategize around those numbers. So that's kind of my thing. So real rough numbers, but at the bare minimum, 2 million a year in revenue, probably closer to 3 million before you start having that conversation. Then also somewhere around that 30 employee and up mark is where you start having someone that can start doing this for you, or start paying someone to be able to do that for you.Jonathan:Real rough numbers, but every situation is a little bit different case by case basis, but that's in general what I would be saying. So we talked about some of the problems today that the dentists are facing is one, an understanding of revenue. Understanding what revenue is, how to analyze it, how to record it, how to you ... See what it is that you're doing.Jonathan:What does revenue equal, and what does that mean in dollars and cents perspective? Then what does cashflow mean? Then coming up with a game around those things. So one of the things that we're doing on this podcast is we're highlighting problems and then we're going to try and create episodes around how to address those problems. So expect in a future episode for us to talk about these problems and give you different ways, as a listener, to be able to come up with solutions and to be educated in these problems so that you can do some of these things on your own.Jonathan:So that is our episode on the CFO role in dental practices. We may do a follow-up episode in the future, but that is the episode for that. So any closing thoughts on the CFO's role in dental practices, Joseph?Joseph:I think the dental industry is just a great industry in general. It's something that I'm excited to be out helping dentists. Super, super smart men and women. Very, very, very hardworking. Very entrepreneurial. So a lot of this stuff, at the smallest of the small scales, at the small offices, they'll be able to figure it out. They'll be able to make those decisions internally and as you grow, that's going to be the point where you've got to figure out at what point does it make sense to invest in additional health.Jonathan:As a final thought, what are some of the other problems that a CFO can help with? We talked about understanding revenue, we talked about coming up with a game plan and I guess another thing would be to track the success or failures of that game plan. Is that accurate?Joseph:Yeah. I think one other things that I think a great CFO will help you out in the dental space with is figuring out what does your insurance reimbursement look like. I know there was a point in time where pick a company shows up and says, "Hey, we want you to be a network with us," let's say at Cigna, "And we're going to offer you X," and that's significantly below what your usual and customary is. So the question becomes, can we afford to take this contract?Joseph:It could be United or Concordia, or it could be any number of places. What's that look like? What's the financial impact of that look like? I talked to a client one time that was in the Midwest that was close to an insurance headquarters and they wanted to drop their reimbursements by, I think it was 30%.Joseph:I said, "Hey, by the way, we're making cuts. You guys are on the hook for 30%." So then the question becomes, and this is a great CFO question. So what percentage of your patient base does this insurance carrier represent and how much dollars in revenue does that mean per year and if we take a 30% hit in that specific insurance carrier, how does that project out? What this practice was able to figure out was that it would have been a couple of staff members.Joseph:I think that the impact of this was like two staff members. So they wrote the insurance company back and said, "We're not going to be in network with you anymore if you continue to say this, because every one of our staff members are important to us and you're taking away two jobs from our practice, and we choose not to do that."Joseph:That's a great CFO project to look at. Certainly, there's smaller contracts that you can afford to take bigger losses on and that kind of thing if you wanted to, but I think that understanding insurance reimbursements and your contracts and all those things. Of course, there's always plenty of people that you can outsource, you can do this with, but that's a big CFO role.Joseph:What's the impact of this specific contract going to be and how's that going to go? One of the markets that I was in had a big, huge FedEx plant and the FedEx switched insurance carriers and the insurance carriers dropped everybody that was in network. So it was like, oh my gosh, are we going to survive? Because so much of this town's employees ... And it was like, well, let's run the numbers. Let's see.Joseph:Well, it turned out that out of, let's say, 100% of the total revenue, only 5% of it was this specific insurance carrier. So I think we're going to be okay. It's not going to be great. It's not going to be helpful, but I think those are great things for CFOs to get a chance to look at for you.Jonathan:Cool, awesome. So we will follow up with those in future episodes. Stay tuned to the Tooth & Coin podcast to hear more about the different problems inside of the dental industry, from a financial management perspective that we will be addressing here on the Tooth & Coin podcast. So we thank you very much and we'll see you next time.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth & Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA service, head on ever to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country and we'd love to be able to have the discussion about how we could help your new practice.Jonathan:We do specialize in new practice owners. So people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:If you enjoyed today's episode, again, go to the Facebook group. Talk to us about what we've talked about. Join in on the discussion and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the longterm.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444. Reply with your email address, we'll send instructions in the Facebook group. We'll send you the resources when they're available and we will see you next week.

Join the discussion on Facebook!Jonathan:Welcome to the Tooth & Coin Podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific, but we hope that these episodes help you along with your journey.Jonathan:Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors, we are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So, we've got a Facebook group that is active with Dennis that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share? Join us in the Facebook group. If you go to Facebook and you search for Tooth & Coin Podcast, click on it to join it, and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering in and around our topics of discussion, to be able to help you a little bit more than what the content is doing. So, if you'd like access to that whenever it becomes ready, all you have to do is text the word "toothandcoin," T-O-O-T-H-A-N-D-C-O-I-N, to 33444. And that's "toothandcoin," all one word, no spaces, to 33444. Reply with your email address, and we'll email you instructions on how to get into the Facebook group, as well as add you to lists to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you, as well. So onto today's episode, hope you enjoy it.Jonathan:Hello, ambitious dentists. So it is the Tooth & Coin podcast, episode number one, and we are here to discuss this new podcast learning experience that we're going to be creating and developing, and to be honest with you, learning a little bit more about the business of dentistry with everyone that is listening in. I have with myself, Mr. Joseph Rugger, who is a team member with Tooth & Coin, a long time friend of mine as well. Joseph, why don't you tell everybody about yourself, about your experience in the accounting and the dental world, the medical world?Joseph:Yeah, sure, absolutely. So, I always get a chance to tell my story and I get a chance to tell some funny parts of it and some fun sections of it, so hopefully that's of interest to your group. So, I grew up playing competitive baseball and ended up getting a chance to play college baseball at a small school in Batesville, Arkansas called Lyon College.Joseph:Ended up finishing three majors at Lyon: accounting, economics and finance. So, members and money are born and bred into me and formally educated. My first job out of college, I got a chance to go work for my collegiate fraternity, so my job for a year was to travel the country and hang out with college kids. It was a rough job, but somebody had to do it. I ended up doing that for about a year. I always tell people that my salary at the time was $17,000 a year, and I figured out that I was too smart to not make any money.Joseph:So, I went to grad school at IU Indianapolis and did a Master's of Professional Accounting there. Spent about two years working in public accounting in the Indianapolis, Indiana area. Worked for a top 50 CPA firm out of Carmel Indiana, and it was May... I think it was May. And I was still getting up, going to work, and I'd parked my car outside and I was scraping ice off my windshield, well into May living in Indiana, and a buddy of mine called me, and my friends of course, back home in Arkansas were all going to the lake in May and doing things outdoors and hiking, and here I was, scraping ice off my windshield well into May.Joseph:Anyways, so, buddy of mine, his parents owned a prosthetics company and he called me in the middle of the end of busy season in the accounting world. And he said, "Hey, our controller just left. Do you have any interest in coming to work for us in the prosthetics business?" And I said, "Absolutely, would love to come visit with you." And I got a chance to work in the prosthetics business for a company in northeast Arkansas for about 12 years, spent a couple of years as the controller and spent the bulk of my time there as the director of finance and administration, which is a fancy way of saying the CFO and the COO.Joseph:We got a chance to do all kinds of crazy fun stuff. We had four locations when I started there. After I'd been there for a little while, we divested two of our locations, so we went from four locations in two states to two locations, and then over the course of the next 10 years, we opened up a number of new branches, expanded into another state, and by the time I left, we had eight locations across two states, had about 75 employees. Did a whole bunch of work for folks. We ended up seeing about 10,000 patients a year as far as delivered services.Joseph:So, we got a chance to really head up the finance arm, got a chance to really understand the medical billing side. We used HCPCS codes in the prosthetics business, and got a chance to see and learn ICD-9, and then that became ICD-10, and everything in between, and got a chance to understand the difference between a usual and customary fee, or a UCR fee and allowed fee. I was having a conversation the other day with somebody about how to measure your revenue, but got a chance to spend 12 years in the prosthetics business.Joseph:And then, actually, just got reminded on LinkedIn the other day that it's my three-year anniversary at Tooth & Coin. I had all these people say, "Hey, congrats on your work anniversary." And I'm like, "What in the world are they talking about?" Sure enough, February was my three-year anniversary at Tooth & Coin.Jonathan:My wife can tell you that dates are the things that I forget the most. So, I was not one of the people that congratulated you. So that's on mem though. So it's a little dirty laundry for the listeners there. So, cool. So you were in the medical industry. For the listeners, what would be the equivalent of a small to mid-size DSO pro office, somewhere that had eight to 10 locations doing somewhere in the eight figure range of revenue? Is that about accurate?Joseph:I'd say that's pretty close. Yeah. Yeah.Jonathan:Yeah. So, that's what you did in terms of a CFO type role. By the way, one of the episodes that we're definitely going to record is, what is a CFO and what do they do? Because I get a lot of calls about that and I try to explain it, and I'd love to hear what a CFO actually does compared to what I think that they do, since I've never actually been the CFO of somewhere.Joseph:Sure.Jonathan:So, cool. So you're a CFO and you've been at Tooth & Coin for three years now. What else is relevant in terms of your accounting, CPA, financial background?Joseph:Well, I think it's always interesting for me to tell people how I ended up working for you at Tooth & Coin. I think that's always an interesting story. So, I moved to the Dallas, Fort Worth area a couple of years ago, and I was interviewing for a couple of different jobs and working with recruiters. And I ended up getting a call from a recruiter to talk to them about being the CFO for a big dental services organization, or DSO, here in the metroplex.Joseph:I think they had about 80 or 90 offices across Dallas and throughout north Texas. And anyways, Jonathan, you and I have been friends for a number of years, randomly sat next to each other at a continuing education in Little Rock, and struck up a conversation and became friends. That was what? 15 years ago, I think.Jonathan:Yeah.Joseph:But anyways, we'd stayed in touch and stayed friends over the years. So, I had this interview coming up with this DSO and I thought to myself, "Who do I know that I can pick their brain about the different stuff that I need to study and prepare for this interview?" So I called you and reached out to you and said, "Hey, I've got this interview coming up. Would you be willing to share some stuff?" Anyways, and we started talking and you told me... a couple of days later you were like, "Man, if he's interested in making a move, maybe he should come to work for us."Joseph:So that started that conversation. So, been with you at Tooth & Coin for the last three years. Got a chance to do all kinds of really, really cool stuff inside the CPA profession on both the professional level and also on the volunteer level. Education is something that is near and dear to my heart, so I've done continuing professional education and taught continuing education across the country for both the AICPA, and I think I'm up to 16 different states across the U.S. that I've taught in.Joseph:I've taught in two foreign countries. I got a call from the AICPA and they said, "Hey, do you have time on your calendar to come teach in the Caymans?" And I said, "You know what? Something just opened up. I do have time to do that."Jonathan:"I think I can make that work."Joseph:Yeah. Yeah. I got another call to say, "Would you like to come speak at The Bahamas Institute of Chartered Accountants?" And I said, "Absolutely. I think that would be good." So, I've gotten the chance to teach and coach at the CPA level and certainly with lots of other entrepreneurs across the dental industry and across a number of other industries, and I really, really enjoy the educational part of what we do, because... Warren Buffett, I think, said it best, that accounting is the language of business and it's up to us to figure out what the story is.Joseph:The numbers do tell a story, and we've got to figure out, number one, make sure the numbers are right, but number two is to figure out what story that's telling. And one of the things that I'm passionate about is I really, really want to help small businesses grow and succeed. That's something that I figured out early on in my education, is that as an accountant, we're going to have that ability, and I'm trying to simplify that even more, Jonathan. And what I really want to tell them is, "I want to help you win with money," which I think is near and dear to our hearts as CPAs.Joseph:So, I've gotten a chance to travel quite a bit. I've been to, I think, 30 countries or something like that, been to all 50 states, hope to come visit your state, whoever you guys are that are out listening, and come hang out, teach some stuff, and that kind of thing. So I think that's all certainly relevant to our discussion here. At this juncture, I'm getting ready to become the chair-elect of the Arkansas Society of CPAs.Joseph:It's a volunteer organization that I've been a part of since I became a licensed CPA, and we're doing lots of great stuff inside the Arkansas Society, and to get a chance to share that's an honor. I was telling you this the other day, I'll be the youngest chair in the history of the Arkansas CPA Society, which is a really, really great honor for me to have.Jonathan:Another honor that you had recently bestowed upon you was the AICPA Young CPA Leader of the Year Award? Did I get the title right of that?Joseph:Yeah, so that was really cool. It's funny. My wife was kidding with me the other day. She was like, "Are we still young?" I was like, "Yes, we are still considered young." But it's the AICPA Young CPA of the Year in honor of a guy named [Maximum McColloughby 00:11:20], and it was named in his honor. And it's an award that sets out to recognize volunteerism in the profession, who's helping capital markets and who's helping the profession move forward from every angle, both from a professionalism standpoint to a volunteer to, what kind of impact are we making inside of our communities?Joseph:So, I was awarded that in the middle of a global pandemic and we were supposed to go to Las Vegas for this big convention. And of course, all that got canceled, and we ended up having... the AICPA did a great job, and we ended up having a really cool virtual ceremony that went out on Facebook live that you could go check out where I got a chance to come talk about volunteerism and what it means to me and hear some of my friends talk about the profession and the awards and all that stuff. But yeah, that was a big honor that I got from the AICPA.Jonathan:Really was. And just for people that are listening, that's the equivalent of the ADA giving out a Young Dentist Leader Award, and they only give it out to one person a year. It's not like the thing that you get in high school where you get to sign up for the who's who-Joseph:Who's who.Jonathan:and pay some money to be a part of it. It's a big deal, and we're really proud of you for it for be able to do that. So, cool. So, for anyone who has not listened to Start Your Dental Practice or is not aware of Tooth & Coin, my name is Jonathan van Horn. I am the CPA and the owner of Tooth & Coin, which is a CPA firm. We are located in Arkansas, but we help dentists everywhere in the country in the United States. We have clients in just about every state. We have around 250 offices we help out.Jonathan:And our mission is to help bridge the gap between you being a successful dentist and you being a successful entrepreneur. We do that in ways that we can help. We try to not venture outside of the realms of the things that we don't know how to do. We find that a lot of people make the mistake of trying to get their hands in too many cookie jars. We've learned through experience that the best way to help our clients is to give them the advice that we know the most about, and that is the accounting, tax, and business financial world, so to speak.Jonathan:And from a numbers perspective, that does mean a lot of things. And what we hope to do on this podcast is talk about a little bit about those things and help solve some of the problems that are out there in the industry that seems to stem from the fact that most dentists spend about 15,000 hours learning how to become a dentist and almost zero hours learning how to be a business owner.Jonathan:So, this podcast is hopefully going to be informative and help a bit with that problem. So, a little bit more about me. I was driven to the CPA world from a young age. I was from a small business family. My parents owned a small business, my grandparents owned a small business. My parents owned a furniture store, my grandparents owned a manufacturing company. And whenever I was in the eighth grade, my parents sat us down in the living room.Jonathan:My dad sat down on the fireplace, and he said to us, "Jonathan," and my sister and my mom. "The business had failed. We are going through bankruptcy. We're going to have to sell the house. We're going to have to move away from our family home that we lived in since I was born, and leave the place that I had known and grown up and loved."Jonathan:And so we had to move halfway across the state from one Arkansas town to a more rural Arkansas town, and if you think that you live in a rural place, I went from a town of about 25,000 people to about 8,000 people, and moved out of a four bedroom, two bath house that was in a pretty nice area to a two bedroom, one bath apartment that was in an area that wasn't the best. And it was a really rough time for my family.Jonathan:And my dad always said, "Jonathan, the reason that the business failed wasn't because the business wasn't working. It was because I didn't keep up with the numbers. I didn't know about the business side." My dad was the sales and marketing person. He was not the business guy. He was the person that made the sales happen, made the revenue come in, but he didn't ever keep up with the business side of things, the financial side of things.Jonathan:He'd actually relied a lot on my grandfather, the one who owned the manufacturing company, to do those things. But unfortunately, my grandfather died about... I guess it was at this point almost 35 years ago. So, he wasn't around very long to help out with that furniture store. And my dad always said if he had had somebody there that could have kept an eye on the numbers, could have kept an eye on how the business was doing from a business standpoint, that we would have been okay, the business would have survived.Jonathan:It went through a bit of a hard time, but we would have made it out of there if he just had a better eye on the numbers and a better eye on the business side of things. So, he always said that. He even says that today still. Actually, we had a discussion about this about a month ago, and he's still saying the same thing about coulda, woulda, shoulda stuff.Jonathan:So, I grew up thinking that that's what CPAs did, because that was what my dad said CPAs did. And I went into school and I got real close to becoming a math professor. So, a big fan of numbers. Always enjoyed math as a subject and had way too much nerdy fun with it, but did end up going the route of CPA, much like Joseph said. He wanted to make some money in the world. So I figured being a teacher was probably not the best way to make money in the world. So I thought, "Let's go with the CPA route," and also I could also be able to help a lot more people. When I got out into the CPO world, very quickly found out that's not actually what CPAs do, as I find a lot of people are surprised about.Jonathan:CPAs don't typically really help with businesses. The CPA industry was created around compliance. It was created around making sure that you filed and paid your taxes so that you don't pay penalties and interest or go to jail. We call that compliance in our industry, and I didn't want to do just compliance. I wanted to do more. So, after working for five or 10 years in the public space, helping out people with compliance, I said, "Enough is enough. I'm going to go and start this new business." And that is how Tooth & Coin was born, and our mission statement of helping dentist bridge that gap of being a successful clinician with being a successful entrepreneur was born.Jonathan:So, that's the story of Tooth & Coin, my personal story of how I became a CPA, why I became a CPA, and just a little bit more into the mind of who it is that's talking to you through these things. There is a podcast out there that you can go and listen to. It's called Start Your Dental Practice. Our CPA firm does specialize in new practice owners, so we have about 250 offices we help out with as of today, which is the beginning of 2021, and over 200 of those were new practice owners whenever they came on with us and our firm.Jonathan:So if you're a new practice owner, someone who's within five years of ownership, we'd love to be able to talk to you about how we can help you out with your dental practice as well. But to this podcast, the Tooth & Coin podcast, what are we here for? Why are we doing this? Why are we talking today? The purpose is fairly simple. I discussed it briefly before I went with my intro is that there are a lot of problems that need to be faced inside of the dental industry and a lot of the lessons that need to be taught to people in terms of what business is and how to approach it.Jonathan:There's a lot of confusion around a lot of different subject matter, and who better to talk to you guys about those things than a couple of guys that have experience running a CPA firm that helps out 250 offices around the country, someone who acted as a CFO for 12 years for a very big medical organization, and has helped lots of our clients right now that are dentists, help get their way through the business of dentistry and be able to talk about the things that we know how to talk about?Jonathan:So, the purpose of the podcast is that. We're going to be highlighting problems, we're going to be talking about the solutions to those problems, and we're going to be trying to give you resources around ways to be able to solve those problems. I think one thing that Joseph and I do not want this podcast to turn into, just for full expectations for you so that you guys can hold us accountable is, we don't want this podcast to just be informational only.Jonathan:We want this podcast to be actionable. We want it to be something that you can execute based off of. We want it to actually solve problems, not just highlight them. Anytime you do any type of content, it's hard to sometimes bridge the gap between educational, entertainment, and action. And we're going to do our best to focus on highlighting the problems, and then giving you the solutions and giving you the resources to be able to take action on those solutions. So to me, that's the reason for the podcast. Joseph, what are some of the things you're wanting to solve with this podcast, as well?Joseph:I think at a high level, Jonathan, you and I, we've got just such varied and similar experience of the business of healthcare here, and as we sit back and think... I'm as guilty as anybody else. I think everybody knows the stuff that's in my head, and as we have new team members come on, as we have new dentists come on, I find that there's a whole lot of stuff that's inside my head that not everybody knows, that everybody's not read all the books that I've read.Joseph:They haven't listened to all the same stuff that I have. And I forget that. So, I look forward to getting a chance to just really share some insights and some things that we see, and some things that each individual listener can take home with them and can digest and see how does it apply to their individual practice, their individual situation? So we've got all this knowledge and expertise. We want to put it out into the world. We want to help you build a better business, a better practice, a better life, eventually. That's really what we're trying to do, here. We're trying to help you reach your entrepreneurial dreams and goals and help you with all those things.Jonathan:Yeah, exactly. And another important piece of all of it is, I find a lot of the times, when a client asks us a question, there is the book answer, and then there's the contextual answer. And I feel like we're in a unique position to be able to give a lot of context around some of these, about how to approach the book solution versus the real life solution of what we've seen happen. Other things that we're going to be looking to do with this podcast...Jonathan:So, we're going to be looking to have this be an engagement platform with other dentists that are out there in terms of ways that you guys have solved the problems we're talking about. So, this isn't only about us sharing what we know. It's also about you sharing what you know` with the rest of the people that are out there so that we can all have a prosperous and full lives, so that we can all do better.Jonathan:We all can live a life of abundance, and there's always information that can be shared. And so, we're going to be having ability to grow a community out of this podcast, and we're also going to be using real life questions from real life dentists that are having these real life problems, and talk about ways that could potentially have solutions, things that could be answered. We're going to be literally pulling questions from clients of ours, of course, with permission from the client, or have it be anonymous.Jonathan:We'll be pulling real questions that clients are having so that we can answer those things, because if our clients are asking those questions of us, I know that the people that are listening are probably having those same questions. They need to be answered by somebody. And hopefully, we can give that answer and be a resource to the industry. So, that's the problem that we're trying to solve. That's how we're going to try and solve it. Is there anything that else you wanted to add, Joseph, in terms of what we're trying to do here with the podcast?Joseph:I'm looking forward to going on this journey with you, Jonathan. You and I have been friends for a long time, and we both have two things that are inherent in us: we want to serve and help other people, and we want to educate. I'm looking forward to doing both of that to our audience, with our audience.Jonathan:Absolutely. So, to give some of our audience members some ideas of the different topics we're going to be approaching whenever we come down in these episodes, some of the topics that we've already highlighted that we want to talk about. Understanding the business model of dentistry. We want you to know how much cash do you really need to have in your business. How to pay less in taxes while your net worth is more important than you think and why it matters. What's a dental practice's true value?Jonathan:Fixed versus variable expenses and your breakeven point. Analyzing your overhead. Staffing percentages, personal finance. Recurring charges, and do you actually use them? The purpose of continuing education. How to understand your financial statements, and why it's also a total waste of time. How to manage expectations whenever it comes to leadership. How to lead people. How to handle turnover in your office. Training protocols. Crucial conversations. Understanding what your sales and production actually mean in your office. Understanding how to handle new patients and how to measure your growth and how to measure your marketing expenses and calculate your ROIs.Jonathan:And just tons of more things that we're going to try and talk about. Those are the ones that we've literally just brainstormed off the top of our heads over the course of a few conversations that we could give full and really good information on, as between Joseph and myself. For areas where we are not expert subject matters... or subject matter experts, rather, we plan on reaching out to the industry and finding the best people to be able to talk to you about those subjects.Jonathan:So for example, we will not be talking to you about how to increase your hygiene revenue. That's not something that we're going to be talking about because neither Joseph or I has ever had to talk to a hygienist and tell them how to do their job. Now, we could have a conversation about how to talk to an employee and how to manage an expectation, but we're not going to talk to you and say, "Hey, this person needs to be doing... 30% of their patients need to be receiving fluoride treatment, because that's an industry standard."Jonathan:Now, I can tell you that may be an industry standard, but how you go from where you are today to that standard is anyone's guess for Joseph and I. And so we're going to have somebody on that's going to be able to actually answer that question and give you some guidance and help you with those things. So, that is what we'll be doing in terms of the episode breakdown. Again, the current format that we're we're working with is, highlight the problem, talk about the solution, and then give resources.Jonathan:That's what our content's going to be about. We're going to try and keep our episodes somewhere in the 20-to-30 minute range. We don't want you to have to devote a full hour of your day just to listen to our podcast. That is giving us some accountability to keep the episodes on point and not to go down too many rabbit trails in terms of conversation, and so that we can really make the time that you're giving to us and putting us in your ears to be as high-value as possible.Jonathan:So, that is our plans with Tooth & Coin podcast. We hope to have you guys on the journey with us, and if you would, make sure to follow us on all the social media, and we will see you on the next episode.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth & Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country. I would love to be able to have the discussion about how we could help your new practice.Jonathan:We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:And if you enjoyed today's episode, again, go to the Facebook group, talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the longterm.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word "toothandcoin" to 33444, that's "toothandcoin," no spaces, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Reply with your email address, and we'll send you the instructions on the Facebook group. We'll send you the resources when they're available, and we will see you next week.

This week Steph's taking a quick break, but while she's off, Chris is joined by a special guest - Jonathan Reinink. Jonathan is the creator of Inertia.js. Inertia.js (https://inertiajs.com/) lets you quickly build modern single-page React, Vue and Svelte apps using classic server-side routing and controllers, and listeners of the show will certainly have heard Chris rave about it on previous episodes. Chris and Jonathan dig into what makes Inertia unique as compared to frameworks like Phoenix LiveView, Laravel Livewire, and Rails' Hotwire & Turbo. They also discuss how Inertia embraces the URL, the unique "protocol" nature of Inertia, and how to consider Inertia alongside native mobile applications. Throughout the conversation, Jonathan's consistent philosophy of wanting to build robust, performant, and delightful applications shines through. Jonathan Reinink on twitter (https://twitter.com/reinink) Inertia.js (https://inertiajs.com/) Eloquent Performance Patterns (https://eloquent-course.reinink.ca/) TailwindCSS (https://tailwindcss.com/) Church Social (https://churchsocial.com/) Jonathan on Full Stack Radio (https://twitter.com/adamwathan/status/1192152495407222784?s=21) Foundational blog post: Server-side apps with client-side rendering (https://reinink.ca/articles/server-side-apps-with-client-side-rendering) Laravel Livewire (https://laravel-livewire.com/) Alpine.js (https://github.com/alpinejs/alpine) Phoenix LiveView (https://github.com/phoenixframework/phoenix_live_view) Hotwire Turbo (https://turbo.hotwire.dev/) The Inertia Protocol (https://inertiajs.com/the-protocol) Transcript: CHRIS TOOMEY: I am seeing what I believe to be the relevant things. JONATHAN REINIK: Let's dance. CHRIS: Hello and welcome to another episode of The Bike Shed, a weekly podcast from your friends at thoughtbot about developing great software. I'm Chris Toomey. And this week, Steph is taking a quick break, but while she's away, I'm joined by a special guest, Jonathan Reinik. Jonathan Reinik is the creator of Inertia.js. And listeners of the show will know that that is increasingly one of my favorite frameworks and, frankly, just ways to build applications on the internet. Jonathan is also the creator of the Eloquent Performance Patterns course, which teaches the Eloquent ORM, which is the ORM in Laravel but really digs into deep performance and database things, so really covering that back end as well. Jonathan also collaborated on the development of Tailwind CSS, a utility-first CSS framework which again is something that I have spoken of in very high terms on this podcast. And lastly, Jonathan currently runs his own SaaS business called Church Social. So really, Jonathan is a bit of a quadruple threat covering back end and front end design and entrepreneurship. So pretty much everything you want to see. And frankly, I've been so impressed by the breadth and the depth of Jonathan's work and just the deep way that he is thinking about building applications. So I am absolutely thrilled to have him on the show today. So without further ado, Jonathan, thank you so much for joining me. JONATHAN: Thanks so much, Chris. That was a very kind introduction, and yeah, it's awesome to be on The Bike Shed. I've been a long-time listener, and as I've said to you, I really appreciate the support that you've given to my work over the years. So yeah, it's awesome to be here. CHRIS: That's interesting. We're measuring it in years now, but it's a very sincere thing for me. I think with Inertia, you've built something that is both very unique and a special approach to how we build things, but it's also built from very familiar pieces and allows us to reuse the deep amounts of knowledge that we have in the Rails community or the Laravel community. But actually backing up just a little bit, because we're going to dive deep on Inertia.js today, for folks that are not as familiar or have only heard me mention it in passing, there's a wonderful episode of Full Stack Radio where Jonathan and Adam Wathan talked about Inertia.js, and I think gave a very good foundational summary. So we'll link to that in the show notes in case anyone wants to dig in a little bit more. Likewise, Jonathan has a really fantastic blog post called Server-side Apps With Client-side Rendering, which, as far as I can tell, is the manifesto that began this whole journey for you. And I really love that you have done so much of the work in public, and people can see the history of how this idea has evolved and really crystallized into what now is a very production-ready framework in sort of the way to build things. But I would love to hear right now just for anyone who is not as familiar and also just to hear how you summarize it at this point in time. What does your introductory elevator pitch for Inertia.js sound like in April 2021? JONATHAN: That's a great question. So it's hard to answer this without unpacking a lot of different things. And you mentioned the podcast with Adam; I think that's good because it goes in a lot of the technical detail of how Inertia works and why I created it. But the elevator pitch these days for when I talk to someone about it, it's generally I explain it as a way of building modern web apps. And in particular, when I say modern, I mean web apps that have a lot of JavaScript, so frameworks like Vue or React or Svelte, so applications that are built using those tools. And the key thing that Inertia offers is for you to develop these modern applications without having to first build an API sort of the way historically if you ever wanted to use one of these modern web stacks like Vue or React or Svelte, you could use them within Laravel or Rails by inserting them into your Vue or into your Blade templates or your ERB templates. But it was difficult if you ever wanted to turn it into a legitimate single-page application. And anytime you would ask that question, if you go out on the internet and say, “Hey, how do I build SPA with, say, Vue and Laravel or React and Rails?” The answer was always, “Well, you need to build an API. You need to build an API.” That was always the missing piece because that's the way that everyone in the Jamstack era that we're in that's the way that everyone's building their applications that are like these heavy client-side applications. And I totally get the need for those style apps and the place for those style apps. But I really missed this way that you could build an application with Rails or with Laravel where you could just literally spin up a new app, create some routes within your server-side framework, create some controllers, create some views, and have a working application within minutes really. You could have something being displayed on the screen within minutes with these classic monolith applications. And if you wanted to do the same thing, if you wanted to get an app up and running in minutes with Vue or React as your completely client-side SPA scenario, it just wasn't working because as soon as you say, “Well, in order to do that, you're going to need to have a back end Rails or a Lavarel application, and then a client-side Vue or React application. And then you're going to have to create this API that connects the two together.” There's just a lot more work that goes into that. It's not only the work of actually creating the API; I find a lot of the decisions that come along with building an API; it's like, okay, what does the abstraction look like? Am I going to build it with REST, or am I going to build it as a GraphQL API? And all the decisions that come along with designing and architecting that which again has its place. But there's just something awesome about saying, “Here's a new route. Here's the view that I want to render. And here's the data that I want that view to have,” and just go off and do it, and it's done. And some people ask me, “Well, with Inertia, if you're not building an API, what happens someday if you need an API?” And they frame it like, well, this is a terrible decision. You should be starting with an API. But for me, the reality is that so many of the web applications that I was building and that I've seen other people building is they had already made the decision not to use an API because they had already made the decision that they wanted to use Laravel as a monolith app that had their controllers and the routes and their views all within that and the same thing with Rails. So if you've made that decision to build a monolith app with Laravel or Rails, you've already made the decision to not build it with an API. I was coming in from the other way. It's like, I just want to build an app the way I've always built in Laravel, and I don't want to have to build this API. Of course, there are times where you do need an API, which I think we're going to talk about maybe a little bit later if I don't ramble on too long, where it does make sense to have an API. But yeah, that's kind of the elevator pitch. I think maybe to close off that thought is that I really, really enjoy having a tight coupling between my routes and my data layer and my views, which, again, I appreciate that. That probably sounds like blasphemy in modern web development. But for me, I think it's so empowering when you say, “Hey, I have a controller that's given me some data, and I have a view that's rendering the data, and those two know about each other, and those two depend on each other.” You can work so fast because I'm not thinking, okay, well, I have this API endpoint that returns a user, and that has their first name and their last name and their email. But I also need to think about it in the situation in the future where I might need this attribute or that attribute or some other attribute and make sure I have all that figured out ahead of time or at least have a way to add it in later. And all of that thinking that goes into designing an API, I find that that adds a lot of overhead. And then maybe related to that also is the amount of times that you're rendering a view within your application that needs data from multiple different places. And to me, this is like one of the huge performance benefits that you get with a tool like Inertia is with, say a REST API, GraphQl solves this, but with a REST API, you're often getting too much data for what you actually need for the page, or you're often making more than one HTTP request because you say, “Well, on this particular dashboard, I need some user information. So I have to hit the user endpoint. I need maybe the latest product sales data, so I need to hit that endpoint.” And you're dealing with these performance issues that you get with a REST API that with Inertia, you don't have that problem because it's just going back to classic Laravel Blade views or Rails and ERB templates. Am I saying that right, ERB template? CHRIS: Mm-hmm. JONATHAN: In those situations, you say, “Well, if I need data from three different places, well, I'll just grab data from three different places and send it to the view, and that's fine. And I can do that in the most efficient way and get the data that I need specifically for that view.” So anyway, that's some of the thinking that drove me to build Inertia and some of the things that I was going for. And yeah, it was an evolution. It really came out of me using Turbolinks and really appreciating what Turbolinks gave me but taking it to that next step where it's like Turbolinks, except it's built with the same principles as Turbolinks but built for modern client-side frameworks like Vue and React. CHRIS: Yeah, that all feels very familiar to me. And in my experience, I've now worked with Inertia on a handful of projects, but in particular, I have just a small personal app that I use to manage different aspects of my life. And it's been my playground for different technologies. And I've migrated it through a bunch of different versions where it used to just be a Rails app. And I was like, oh no, the thing that I need to do to be on the cutting edge is to turn this into -- it's a Rails app on the back end with an API, and then it's a React app. It's separately deployed, but those two talk to each other. And what you were talking about of the deep coupling, I think that coupling exists whether we want it to or not. And so embracing that and revisiting when I eventually migrated that application to use Inertia and the client-side stuff folded back into the core codebase. Now deployments all go out in sync. And that turns out to actually be a really nice thing and a non-trivial thing to solve otherwise. As a developer of one on this particular project, the amount of complexity that was removed from the app when I switched it over to Inertia was amazing. I got to remove client-side routing. I got to remove client-side state management, which I think I was using Redux at the time. I got to remove some form helpers that I had. I think I might've been using Formik or React Use Former, any of those. But there are so many different little pieces that you ended up cobbling together to make an application. And it was amazing to me as I moved to Inertia, where I was like; actually, I don't need any of those, and routes suddenly are defined in one place in Rails in a familiar way. But things like redirects all work -- It feels just like a Rails app but with the extra abilities that a front-end client-side framework gives you when you want those when you need those. But otherwise, it really does feel like I'm rendering to an ERB template. It just happens to be that that template is rendering on the client-side and is written in React or Svelte or whatever the front-end framework is. But it almost feels like progressive enhancement. I'm borrowing a term, and it's not actually applicable here, but it really feels like that. It's like, oh, it's a Rails app, but I just want to make it a little bit fancier, and Inertia does that in such a fantastic way. And actually pivoting just a bit, as far as I can tell, there seems to be an explosion of thinking in this space. There are a handful of frameworks, namely Laravel Livewire, which is often paired with Alpine.js. Elixir has Phoenix LiveView, and then Rails has the Hotwire suite, which Turbo and Stimulus are the most pointed considerations. But interestingly, I think all of those frameworks, which I think are trying to provide a very similar experience, tend to keep things on the server-side, so using the Laravel Blade templates or the ERB in Rails. But you've taken the different approach to say, “No, let's embrace this front-end technology where it makes sense.” And again, there are a lot of pieces that can fall in, and I don't need the Redux and the React Router and all of those things but still use that client-side framework to be the rendering engine. And so I'm intrigued if you can talk a little bit more about that and that trade-off because I think it really differentiates Inertia and its approach. I personally found it to be fantastic, but I'd love to hear a little bit more about your thinking on that. JONATHAN: The thing about modern websites and web apps, in particular, is it doesn't matter how you slice it; we need JavaScript. So if you disagree with me there, then everything I say from this point on will not make sense to you. But I think we can all agree that modern web apps need JavaScript. JavaScript is the programming language of the web of the browser that allows us to do whatever magical things that we want to do. And if you look at tools like Phoenix LiveView, Laravel Livewire, and even the new Turbo stuff from the folks over at Basecamp, they all are embracing JavaScript in the same way. It's just they're framing it in a different way. I would say, especially with Livewire and LiveView, they're almost creating like an abstraction between the server and the way you write things on the server and the client-side. And they're almost hiding the JavaScript, which is really, really cool. I think it's such an interesting thing to try to do where somebody who's not familiar with JavaScript and not familiar with Vue, React, and Svelte can go and do things, write server-side code that gets rendered server-side. And then there's some JavaScript that these libraries insert that allow you to do more interesting things, whatever those things might be, show a drop-down, or drag and drop or validate a form or submit a form without actually submitting it fully to the server but submit it over XHR instead, all these kinds of things. But the point is they're embracing JavaScript just in a different way. And same with Turbo, Turbo gives you a way to write JavaScript for an application that mostly has server-side rendered HTML. So I think it's important to just recognize that JavaScript is key in all these frameworks. With Inertia, it's the same idea in that Inertia wants to embrace that classic way of building applications using the classic server-side monolith application framework like Laravel or Rails. But the difference is it acknowledges or embraces these existing client-side frameworks that have really grown in popularity. And the three, again, I keep mentioning them, Vue, React, or Svelte. Svelte being an up-and-coming one that's not nearly as popular yet, but it seems to be gaining a lot of steam. CHRIS: It's on the rise. That's my long [inaudible 14:46] JONATHAN: Yes, and people keep saying that. So anyway, Inertia basically said, “Hey, we want to keep building server-side apps. We want to keep building monolith apps similar to these other tools, except what we're going to do is we're going to embrace the fact that there's this really, really amazing tooling that's been developed for the client-side.” And it just doubles down on that. So for me, the reason that I ended up here was because, in my own SaaS application, it was a Laravel application that started with mostly Blade views initially. And then, over the years of building it, which has been many, many years, I've slowly added more and more Vue components within my app. And initially, the way I did it is those Vue components would just be inserted in as regular HTML tags in my server-side rendered templates. And then, when the page renders, those Vue components would boot up and do whatever they need to do. So for me, when I was building Inertia, I had already fallen in love with Vue, in particular, and having all the power of these client-side frameworks. And there is so much there. It's not just Vue, React, and Svelte; it's all the amazing tooling that's available out there that you can add on top of it. And this is the thing I often tell people that Inertia isn't -- we say right on the homepage, “Inertia isn't a framework.” And the reason why I say that is because I don't want people to think of Inertia as an alternative to Vue, React, and Svelte. Do you know what is a better way to frame it? It's actually more of an alternative to React Router or Vue Router; that's really more what it is, where you can say, “All my routings are handled server-side,” and that has all kinds of interesting implications. But it's more of a router, and it just so happens to pass along that routing control over to the server. Anyway, so that's really for me what differentiates Inertia from those other tools is because it's really doubled down on these client-side frameworks. And I think the reason why Inertia has been relatively popular is because people know Vue and people know React. And when it comes to then working with Inertia, it's not some new thing that they have to learn. It's an existing set of tools that they're already super comfortable with. And in so many ways, when you're building an Inertia app, you're kind of building a classic Vue app or a classic React app or a classic Svelte app. It's just there's a bunch of pieces missing. Like you said, it's like a bunch of the client-side state management stuff, which nobody likes anyway, is gone. The other thing that's gone is client-side routing. You don't have this back-end routing is over here now, and client-side routing is over here, and I have two different routing definitions. It's like, no, that's all just server-side now in one place. The other amazing thing you get is you mentioned redirects and that whole HTTP layer you get just along with Inertia for free because it's just part of your server-side stack. And one key aspect of that is auth. You can just use good old-fashioned nothing is better than session auth. Like, it just works. And, so whatever your typical solution for doing session auth in Laravel or Rails or whatever server-side framework you're using, all this stuff just works. So anyway, coming full circle on your question, the reason why Inertia has gone this way is because I really think that there's a huge amount of value with using these modern frameworks. And we just doubled down on using them. CHRIS: Yeah, that resonates with my experiences using Inertia and in contrast to the other frameworks. Everyone seems to be trying to get to the same place of providing a mechanism to have more almost app-like functionality but still using the traditional server-side technologies. But I think Inertia has chosen an approach to that that is unique in that category and really has provided a fantastic outcome. I've been very frankly surprised by the fidelity of experience and how app-like I can get something to feel when building with Inertia while still using all the same technologies. And the fact that I can use just traditional server-side auth and redirects and things like that is just so nice, and everything feels right. There's an experience that I've had on many applications that are, say, a React client-side bundle that gets sent down and then boots up, and then the layout starts to render. And as its data fetching, it gets like a 402 response or something like that in that data fetching. And then it's like, oh no, I need to hard redirect you over here on the client-side to this other page. And there's this junk of semi-filled-out layout, and then suddenly you're on the login page. And again, with Inertia, it looks like a normal server-side rendered app, but it isn't in the ways that really matter to us. And it is one of those things where the more I played with it, the more there's an experience of interacting with Inertia that it surprises me consistently how nice it is to work with it and yet it's so much easier to maintain an application using it. I know I'm raving here, but I am really a big fan of this for everyone listening in the audience. JONATHAN: [laughs] CHRIS: And actually to continue on one of the things you were saying there, one of the things that stands out to me in Inertia is the way that it embraces URLs and to a certain degree, that seems like a purposeful thing, but it also seems like it just naturally falls out of how Inertia works because we're no longer using a client-side state management technology, the way to manipulate state is through the URL. If you want to see a different version of the to-do list you're looking at when you click on that link, you change the URL and the state changes in response to that. And so everything is fundamentally kept in sync, but URLs are very much at the center of the architecture, and I really love that so much. I think URLs are often forgotten in client-side frameworks or underserved or underused. And it turns out in my experience as a user and both having served many users, people love to command-click on links. They love to right-click open a new tab. They love to be able to reload and see the same thing on the screen when they reload the page. They love to be able to bookmark. These are all really wonderful things that come out of working on the web. And the fact that Inertia has a pit of success around having URLs and have that be the way that we drive state is just so fantastic. So I'm wondering how much of that was very purposeful on your part versus how much of that fell out of the architecture. JONATHAN: That is very much something that fell out of the architecture. I say that not to say that I don't value URLs; I absolutely did. That's the way every single one of my Laravel built apps worked. It always starts in the route file. You hit the route file, you define a new route, and it goes from there. So I absolutely think that the URLs are critical. But the fact that it just ended up working out so nicely was, yeah, I'm going to say it was a bit of luck, a bit of coincidence. I find this is what's so interesting when you start pushing on a new way of things; you initially don't really know where it's going to end. It's like you have some ideas of how the tool can work and where it might go, but I think there's a lot of unknowns that you just figure out after a while. So the thing I said earlier actually about the fact that Inertia in a lot of ways is like a client-side router; it's, it's a routing library, to put it that way. I had been working on Inertia for a year and a half, and then a buddy of mine, Taylor Otwell, the creator of Laravel, he and I were chatting, and he said to me at one point he's like, “Oh, you know what? Inertia is actually super simple. It's really just a routing library.” And it was like, bam. It was kind of that moment; it's like, oh yeah, I hadn't thought of it like that at all. But when he said that, it made a ton of sense to me. So it's just this interesting progression the more you work on something, and the more you push on the edges, you learn what's possible and what it even is. I had this interesting experience, so remembering that Inertia came from Turbolinks. So I had my whole app built with Laravel ton of server-side rendered templates with Blade with view mixed in. And I had the SPA mode by clicking around using Turbolinks. So when I decided to try building Inertia, I removed Turbolinks, and all these requests now happened over XHR but using this preset JSON structure that powers Inertia. I really, in my mind, had this idea that it was only for GET requests, for GET visits; it was just for that. So the initial version of Inertia, there was no Inertia.post or Inertia.put or anything like that. It just wasn't something I even thought was possible. But then I remember, and this is often how it goes; I was out for a hike that day to get away from the computer for a little while and just let your brain drift; I'm sure you can relate to that. I was like, wait a minute; I could totally just support POST, PUT, PATCH, DELETE. And that was such an aha moment for me where I just realized that it was so much more than what I originally thought it was. And then the whole thing from that I remember it was a bit of like a waterfall effect after that where I remember running home out on that hike and hacked it together, and then it was like, okay, well, if I submit a form using POST, well, okay, I'm on the create user page. And I submit this form using Inertia.post to the user's endpoint. I'm like, well, how do I now end up back at the user index page or whatever page, maybe the user edit page. I'm like, wait a minute, I can just return a redirect back to the user index page, and it's literally going to return an Inertia response from the user index page. And then the way Inertia works is it dynamically swaps the page component client-side. And it was just like, oh, this is way too cool. And this really drives my thinking now that it's become a little bit more clear to me is that it really it's all based on HTTP using headers and normal HTTP stuff like redirects are such a critical piece of the story. But to me, that's super neat that, in a way, it's like a throwback to the fundamentals of the web and the browser and the fact that Inertia can just use those things,,, and it doesn't have to be fancy in a lot of the ways. It can just rely on those existing core pieces of the browser. So, yeah. CHRIS: It really is interesting to me how it feels like progressive enhancement in that way where you're building on top of these core fundamentals of HTTP and requests and redirects and status codes and things of that nature. Particularly interesting to me was it took me a while, I'm going to be honest, to figure out forms and particularly validation errors in Inertia. And that is entirely my fault. You have absolutely fantastic documentation. I am so impressed by the quality and the density of the documentation that you have that really covers everything. If we're being honest, I hadn't read the page, but I was doing form posting and then the subsequent errors and how you deal with that. I was doing it in a very traditional Rails way which if we're being honest, that is not a fundamental of how HTTP works. Rails just chose an option of oh, if you POST but we don't create the object because there's a validation error, then we're going to stay on the URL of the POST, so the collection route, but we're going to re-render the form in line. And that's a choice that Rails made that is interesting because at that point, if a user reloads the page, then things are weird, and it's not going to reload. They're not going to see the same thing after that reload, or it's going to try to repost or et cetera, et cetera. There's a bunch of edge cases there that sort of fall out. Whereas with Inertia, you end up redirecting back, and there's this interesting handshake of the errors, but from an end-user experience, it is absolutely fantastic where you stay on the form; the URL does not change. Technically, there's a POST and a redirect back under the hood, but Inertia just handles all of that for you. And you end up with sort of in-line validation errors. But you don't clear out any fields, and there are just wonderful things that fall out of it that again took me a while to get there, but it was another one of those oh, wow, this just naturally falls out of the architecture, but it's so nice and such a nice incremental advance on top of frankly, the stuff that I was doing in Rails historically. JONATHAN: So the way that Laravel works and it's always worked this way is when you make a request using POST or PATCH or DELETE or whatever to an endpoint, and that endpoint does its validation in the event that that validation fails, this is just like built-in standard like Laravel Stock behavior. It automatically redirects you back to the endpoint that you were on. So if you're on the create page or the edit page, it automatically redirects. That's just Laravel behavior. And what it does is it takes those errors that come out of the validator, it flashes them to the session, and then when the forum page reloads, you have those errors available to you in the session. Now, of course, if you're building like a classic server-side rendered application and you redirect now back to your form, you have to repopulate old form inputs, which is not a lot of fun, which you don't have any of that stuff with Inertia because Inertia allows you to preserve your state. But anyway, that's a separate thing. But for me, it's like you build a tool a little bit like in your own silo and the world that you know, and for me, that's Laravel. But there are also ideas that you get that just come from the tooling that you use, and the fact that Taylor Otwell made that decision in Laravel at one point is absolutely what now dictates how is the go-to way to do it in Inertia, just because it works so nicely. CHRIS: I wonder if there's been any consideration in the Rails world to adopt that because I think from an experience perspective, it feels like it's a better thing. It feels like it has the same robustness and guarantees that I would expect. But yeah, that's interesting. It makes sense that that was just naturally there because, again, it didn't feel like the obvious correct thing that Rails was doing. It was always a little bit odd and so interesting that Laravel was already there. But then Inertia can take it that one step further. But taking a slightly higher level view of all of this, one of the things that's really interesting about Inertia to me, especially in contrast to some of the other frameworks that we've been talking about like the Livewires in the LiveViews is Inertia is almost at its core a protocol more than it is…it's a sum of pieces, and with Inertia, you have a server-side adapter, so there's the Rails adapter and the Laravel adapter. And then, on the client-side, you have a separate either Vue or React or Svelte. So those are the officially supported ones on both sides, but there's also been a swell of community support. And so there's a Django one, which I'm not sure if it's currently maintained, but I just saw a Clojure one the other day. There's a Java Spring Boot. So those are all server-side adapters. I haven't seen as much on the client-side, but I imagine there are at least a handful of them out there. And it's so interesting to me that there's this core idea that you define this protocol of communicating back and forth from the server to the client and now this collection of things that are growing around that. And I wonder again, how much was that purposeful versus how much did that just happen? And then further to add a second question to complicate things, how are you thinking about managing that community? Because my sense is that this could allow for Inertia to be so much of a bigger tent and really bring in the best ideas from all of these different communities and end up with something at the core of this Inertia thing that is the best of every community and all of that. So yeah, a lot of questions there, but I'll hand it over to you because I'm super interested. JONATHAN: So I think when I first got going, it was Laravel and Vue; those were the tools that I worked with. And often, the best software and the best open-source software in my mind comes out of trying to solve something for your own needs. So that's really where Inertia came from and specifically for Laravel and Vue. But I quickly realized early on that it didn't have to be just a Vue and Laravel thing. So intentionally early on, I had this idea of trying to build it with multiple adapters, and I had this idea that you could build as many server-side adapters as you want and as many client-side adapters as you want, and maybe we'll officially maintain a certain amount of those, which is what we do right now. We officially maintain the Vue, the React, the Svelte adapters. And then, we also maintain officially the Laravel and the Rails server-side adapters. So that was, I would say, pretty intentional. And it's crazy how many server-side adapters people have been able to put together. Somebody wrote a ColdFusion server-side adapter for Inertia. I had no idea ColdFusion was even a thing anymore; yeah, legit. There are node ones; there are Phoenix ones; if you can believe it, there's a WordPress one, which I'm not even totally sure even how that works. There is ASP.NET. CHRIS: [chuckles] JONATHAN: Like, there's a whole bunch of them. And it's actually despite of me, not because of me, that this has happened because I am yet to write a good here's how to build an Inertia server-side adapter in the language and framework of your choice guide. It's been on my to-do list. I have a bunch of things I want to do. So it's still something I want to write, but people what they're doing is they're just reverse engineering what we're doing in Laravel and Rails and these other adapters, and they're figuring out how to do it in their own server-side language and framework. So that's been really, really cool. On the flip side, on the client side, I'm starting to realize more and more that that's actually where the most important work for us as the maintainers of Inertia that we need to focus our efforts on because it's non-trivial to create these client-side adapters. And for us, we actually have four of them now because we have React and Svelte, but then we have Vue 2 and Vue 3. And they're different enough those frameworks that we actually had to create a separate adapter. So that's really where all our work is. The core of Inertia is actually ridiculously short, like the whole file, like the whole core Inertia adapter is 150 to 200 lines of code. And maybe it's a bit more than that, but it was that for a long time. It might be 300 or 400 now. It's very short. Even honestly, the client-side adapters are pretty short too. It's just that it's more difficult to make these client-side adapters because you get to learn all the intricacies of how each one of these frameworks handles their rendering. The core behavior that Inertia uses is the fact that you can dynamically swap components. So we dynamically swap page components when you visit from one page to the next and the details that come along with that. Anyway, so I've realized that moving forward, my job is going to be to make sure that the client-side adapters are awesome and then letting the community drive the server-side adapters a little bit more and providing some better guides on how to do that. But yeah, for now, it's like if we can get it working in Laravel and Rails, we should be able to get that functionality working in any server-side adapter. And because it's all again just based on HTTP, that's the language, that's the protocol like you say. That's the thing that matters between all these web frameworks, which they all, of course, support since they're web frameworks. CHRIS: I think you're not giving yourself nearly enough credit for the support that you've given to the server-side frameworks because you do actually have a page in the documentation called the protocol that does a great job of at least summarizing it at that HTTP level. But at the end of the day, again, like the job of someone implementing it is to then map that into their given language and framework of choice. But yeah, the documentation is impressive in just how much you put in there and how much care you obviously put into it and lots of nice, subtle details that are covered very well in that. So that again, if you read it, unlike me, then you get to know everything; eventually, I got there. I think I've read the whole thing now. But there's a lot there, and you cover all of the details. But actually looping back to a topic that you hinted at earlier, but this is something that I've been pressing up against lately is I absolutely love building web apps in Inertia, but there's often the need to bring in a mobile app, and we want native mobile for various reasons. I love the idea of progressive web apps, and I want to push that envelope as much as I can. But as an example, right now, iOS does not support push notifications to PWA. So if that's a key feature that we want, then we're dead in the water or if there are certain GPS things. There are a bunch of true platform native things that we just can't get. And so I'm now contemplating building out an app alongside my Inertia web stuff, but I want to build a React Native app, and I'm wondering, to a certain degree, does this invalidate some of my ideas? I know you hinted at this earlier, but I think I'm still convinced of the utility of Inertia on the web. But I think I need a different paradigm to build for a mobile app, and I'm trying to decide where that line falls. I'm also wondering if I can just get away with embedding a bunch of web views and reusing my web logic because, again, if I'm building all of this, I'm going to build it in a mobile responsive way. I don't want to rebuild the core page functionality of my app just to put it on mobile. Maybe mobile folks would tell me I'm wrong there, but I'm interested in maybe wrapping it and getting access to those platform features. But yeah, I'm interested in what your thoughts are there. JONATHAN: Well, embedding a web view within a native app has been proven to work just as DHH, obviously. But yeah, there are definitely people who disagree with that approach and feel like you should build a legitimately native app. Let's say that we're going to legitimately build a real native app. We want to have an Android and iOS app. So I actually ran into this myself for my own SaaS application, and I solved it by building a native app using React Native so React Native obviously being an abstraction on top of iOS and Android and all the tooling there, which is such an amazing platform. It was just a real joy to work with. And I don't even hardly work with React, and I was able to get a nice, high-quality native feeling app built relatively easily. But I had to come to grips with this very question because, like I've been saying all along like, “Inertia is great because you don't need to build an API. Yay, this is amazing. This is what you should do. Oh, crap. I need an API.” And I had those questions like, okay, well, does this invalidate everything that I've been doing? So I was thinking about it, and in the end, what I did is I just built a light API alongside my Inertia application. So what it is is I think I have seven endpoints, and they're just REST endpoints that are designed specifically for my native app. And this works honestly so well. And I think I've explained to you a little bit in a previous conversation, so I'll repeat myself a little bit here for the benefit of the listeners. The reason why I think it's completely legitimate to have Inertia and build your entire web app that way and then have a companion API alongside it in the same monolith app (let's be clear: it's in the same application. It's in my Laravel app, or it would be in your Rails application) is because it just extends a core principle for me of what Inertia is. And that core principle is a tight coupling between my data layer so my controllers, and my views. So if we take that thinking where we say, well, Inertia in an Inertia web app when we have an endpoint, we hit the controller, we load data from the database, we pass that very specific data to the view, which is Vue or React or Svelte and it renders it. And there's a very tight coupling between the two. And I treated my native app in the exact same way. I said, “Okay, I need an API because obviously, the native app on iOS and Android has to make an HTTP request to get this data somehow. But instead of trying to create this super generalized API that could theoretically be used for anything, I use the same principle that said I'm going to allow myself to create an API that has a really tight coupling between the screens in my native apps and the actual data that's coming from those API endpoints. And this worked out really, really, really well. I don't have to deal with a lot of the issues that you run into when trying to create a more generalized API because I could just say, “Hey, I have this calendar page, and I want that calendar page in my particular app. I want it to show people's birthdays, and I want it to show wedding anniversaries, and I want it to show custom events and these things that we have called schedule reminders.” So it's data from four different endpoints. I didn't try to say, “Well, I'm going to go and create now my event's endpoint, and my birthday's endpoint, and my anniversary's endpoint, and my schedule reminder's endpoint,” and now have all that work to do in my native app to okay, we'll hit all these different endpoints and merge it all together; it wasn't like that at all. I created a calendar endpoint that returned all the data that's needed for that screen. And I basically applied that thinking through my whole native app, and it was really a joy to work this way. So I think that approach works really well if you have an app that doesn't have complete feature parity with your web app. And I think if you had a native app that needed absolute feature parity between the native app and the web app, then my thinking might be a little bit different on this. But in my experience, so often, native apps have a vastly reduced subset of the features that the web app has in particular, even if not for the core functionality of the application but just for the administrative side of it. There's a whole bunch of stuff that you tend to have in a web app around administrative stuff that you literally never need. And I mean administrative both in terms of it's a multi-tenant style app, which most apps are so in terms of the user's administrative functionality and in terms of the system level, the software owner administration. If you build your whole web app to be built on top of an API, all that administrative stuff that really doesn't need to exist in both places, you now have to make it exist in your API because you've made that decision to build it that way. Whereas if you just stick with Inertia on the web and just build it using that classic monolith way where you get data from the controls and send it to your Blade views or in this situation, client-side page views, and then you just expose the stuff that you actually need natively, for me personally, it's worked out so well. And if I look at my own web app, the amount of controllers that I have for the whole web app, I have like 100; it's a very big app. And for my native app, I have about 10. So that was like, I'm so glad that I didn't have to create 100 of these in both places. And then some people will be like you might be thinking, well, now I have duplication. I have duplication in some of my API endpoints and my web endpoints, and that's true. I would say first that duplication isn't always a bad thing. I think more duplication in our web apps would actually probably lead -- I feel like we run away from duplication too quickly. I don't think duplication is as bad as software developers often think it is. But even then, if with the duplication you can't live with yourself, there are still ways to solve duplication. So Laravel, for instance, has this concept of they're called API resources, which is basically they're essentially transformers. You give it some models, and it transforms that model into some other states, some other design. So there's nothing stopping you. And I even did this myself within my server-side application within Laravel to have an API resource to have a transformer that's used by both my Inertia controller and my API controller in a couple of situations and for me, only when it makes sense. I'm not going to do it all the time because I found that most often, I wanted the data in a slightly different format in my native apps than I'd want it into my web app. So quite often, that didn't happen. But I'm just saying if you're scared of duplication, there are totally ways to solve it. And we can solve this in our existing frameworks. Laravel or Rails has ways to allow us to abstract some of that stuff and reuse it in multiple places. So, yeah, that's my long-winded answer to how I've approached doing the native apps sort of thing. I think that tight coupling between the data and the screen I think that's a really nice thing, and you just can build faster. And just like you can build faster with Inertia on the website, you can build fast [inaudible 43:19] CHRIS: Frankly, that answer makes a ton of sense one and two, makes me feel better about the path that I'm on because, again, I'm really desperate to cling to Inertia for the web side of things. So I love what you're saying. And again, it really resonates with me and how you're thinking about building. There's also I really appreciate a subtle common theme that I've seen in a bunch of things that you've said where you're like; let me poke at best practices a bit and see what falls out. What if we were to actually embrace the coupling between our data and our view layer? And it's like, actually some really nice things happen there. And actually, going back to an earlier project that you worked on, Tailwind CSS is one of those projects that when you first see it, you're like, well, that's obviously wrong. That's definitely an incorrect way to do things. But then you explore it, and you're like, well, I mean, I know there are trade-offs here, but actually, in my experience and I'm sure in your experience, Tailwind is absolutely fantastic. And the trade-offs you totally win in the long game, and it's maintainable, and it's understandable. And you can continue to develop on top of it in a way that I've never found with any other CSS framework. But again, at first glance, you're like, ooh, that's not right. That can't be right. JONATHAN: 100%, exactly. I think it's fun to push back and just experiment with different things. And for me, I think a lot of my decisions, too, come back to the fact that I'm running a SaaS application as one person, and I need to be able to move fast. I don't want to have two different servers and two different repos. I want to be able to build my applications as fast as I can, as a single developer, a single founder. And so I think the things that I push against and try and experiment with come out of me trying to find the simplest ways to maintain things. So Tailwind, that's really Adam's brainchild. I came along in the first six months or so; me and him built it. I was really just helping him flesh out his idea there, and that was super fun. But yeah, I had the exact same experience as you. Adam was telling me about this, and I'm like, that sounds pretty terrible. Like, I have CSS figured out already. And then it was like, oh man, this is amazing. Fun little fact, my SaaS app, me and him, were both working on web apps at that time. So my SaaS app was one of the first Tailwind applications ever because I and Adam were literally both building our own apps while building Tailwind CSS. But anyway, so yeah, it comes out of not me trying to be like, I know better than other people; it's not that at all. It's more just I'm trying to find a way to survive as a business and trying to build at the same time, not only survive but also I want to build awesome products. I don't want to build software that is just kind of okay. I love striving to make software that's just exceptional that delights people that works the way someone expects it to work. And I just think that there's so much broken software out there. There's a lot of bad software. And don't get me wrong, I've created a lot of bad software, too. But I really try to hold myself to a high standard. And really, for me, that comes down to not necessarily what some purist says that “This is how you need to do it.” It comes more down to like, okay, let me see the results. How fast does the webpage open? What's the performance? You mentioned my course earlier. I'm really, really interested in database performance and how to use databases more intelligently to deliver really fast web applications. And that matters to me because customers hate waiting. They hate it. And that was even part of what drove me to create Inertia because I hated this. I was working for a company, and we had built the right way where we have an API and the client separate And we went down that road. And that was a big team with 20 to 30 developers in the end. And I was just like -- I shouldn't say, “I was,” but we, in general, were not happy with what happened because just the way that the app was built and the way that single views were hitting the API. You could probably argue that this was like we were doing something wrong, but the paradigm didn't lend us to doing it right, in my opinion. So we'd have pages that were hitting the REST API with sometimes 10, 20 HTTP requests just to get the data. And you're dealing with all the loading states of all this stuff. And of course, there were probably better ways to design, but we were trying to ship a product there too. We were trying to get it out the door and make happy customers. And I didn't feel like that way was helping us. I think GraphQL, just as an aside, is a huge step forward where you can say, “Hey, here's all my data in an API, but I'm not going to hit the user's endpoint just to get back whatever you decide to give me.” I can be much more intentional about saying, “Hey, I want this data and then pull in this relationship for that data and this other piece of data.” And I think that's really, really cool. But I think the problem there again is you need to build that GraphQL API, and that's non-trivial, not to mention you probably have to figure out OAuth, which is pretty much always a game-stopper for me because if I never have to work with OAuth in my life [laughs] I'll be totally okay with that. I know it has its place, but yeah. CHRIS: There's a clear passion and a desire that you're describing there to just build good things and the belief that it can be done. And then, as someone who has really benefited from your work, I thank you for carrying that torch and for pushing the envelope. And like you said, having that high standard and holding yourself to it but then hopefully bringing the rest of us along, and I really appreciate that. But I think with that, that's probably a perfect time to wrap up. If folks want to follow more of what you are working on, where can they find what you're up to on the internet? JONATHAN: I'm on Twitter, the classic place to go for following someone in tech, so twitter.com/reinink, my last name. That's R-E-I-N-I-N-K. So that's where even if I have stuff shared elsewhere on the web, that's where it starts. CHRIS: Perfect. We'll include links to your Twitter as well as everything else that we've mentioned in this episode in the show notes. So folks that do want to keep up or investigate further listening to that other podcast episode that I mentioned will have all of that available. But with that, thank you so much for your time, and yeah, again, really appreciate you joining. JONATHAN: Thanks so much, Chris. Pleasure to be here. CHRIS: The show notes for this episode can be found at bikeshed.fm. If you enjoyed listening, one really easy way to support the show is to leave us a quick rating or even a review on iTunes, as it really helps other folks find the show. If you have any feedback for this or any of our other episodes, you can reach us at _bikeshed on Twitter. Or you can reach me @christoomey, or you can e-mail hosts@bikeshed.fm. Thanks so much for listening to The Bike Shed, and we'll see you next week. This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.

  Westward Expansion - (bring up Economic, social, and cultural development) Gabriel - I want to talk a little bit about manifest destiny so manifest destiny was the idea that the united states was destined by God which lets be honest if your expanding and taking territory you better believe your destined by god like nah dude im just evil love expanding through violence or not  Caydan - The louisiana purchase took place in 1803 was a event where thomas jefferson wanted to buy the land around the mississippi river so that he could transport goods easily across it he bought the land from france for 10 million dollars after previously rejected overs of a lower sum  france agreed  because they needed cash for the war they were gonna fight with britain they also added a ton of other land between the mississippi river and the rocky mountains which sounds great but in reality they really did not own the land because native americans still inhabited the land  Illy- so the westward expansion started after the louisiana purchase which was like around 1803 i think and people took this opportunity to explore this new territory, so the native americans lived very differently than the settlers moving in the westward expansion and because of this the colonist called them savages and tried to change their way of life, when the settlers started moving to the west they needed land to live on so what did they do? the only thing they knew how i guess because the didnt even think of any other way to get land other than kicking all of the indians out and said hey you can either become a citizen and start living like us or you can leave and we’ll take your land for ourselves anyways   Audrey - In 1820 the US was a young nation with just 22 states. 11 were free states and 11 were slave states. But then Missouri, which was acquired through the Louisiana Purchase, wanted to be admitted into the Union as a slave state. This threw off the balance in congress because now there would be 12 slave states and only 11 free states. So as a kind of compromise, in exchange for Missouri becoming a slave state, Maine would be a free state. That evened out the power in congress giving equal representation while still letting Missouri be a slave state. This was called the Missouri compromise.    Jonathan-There was much population grown in the eastern states so the westward expansion began however that wasn't the only reason for the westward expansion.There was a lot of available cheap and fertile land for farming, also there an economic opportunity that was seen by many people and this opportunity was known as the california gold rush, along with this open land runaway slaves could settle without having to worry about having to hiding and just being able to live the rest of their lives free. Ben - Shortly after the Louisiana purchase Thomas Jefferson tasked two men to explore and map the entire area. In 1804, Meriweather Lewis and William Clark began an 8,000 mile journey joined by 43 others they had trained prior to the expedition. They encountered around 50 different Native American tribes during their travels, and there were no violent instances of first contact. Lewis and Clark actually had a very robust plan for interacting with the native people, they packed an assortment of trading materials and also carried coins with Thomas Jefferson’s face as well as the inscription “Peace and Friendship” which carries a different weight after what colonists did to the Native Americans.   The Gold Rush  Gabe - The gold rush started in 1848 when in california James W. Marshall who was building a mill for Johann sutter FOUND GOLD. news got out by 1849 we’ve got tons of people going to california for the gold sense it was 1849 the people were dubbed the name forty niner’s and this brought in around 300,000 people  Caydan- gold rush influenced the making of california with more people coming there and settling there. It also made industrial and agricultural develop significantly and led to the settling of the west coast states significantly   Illy-  well while the discovery of gold did influence people to move west and go to california the glory really didn last that long starting from 1848 and ended in 1855 which yes was prolly really like successful time frame for those people that made it there and found gold but what a lot of people don't know is that even after this rush ended people still kept coming to the west in search of gold and then were disappointed when they couldn't find anything  Jonathan- The gold rush attracted immigrants from around the entire world and by 1850 more than 25% of california's population was not born in the united states and when the amounts of gold began to drop miners started getting frustrated that they were not finding anything so they blamed the immigrants, California’s legislature then passed a foreign miners tax which brought a monthly fee of 20$ on non citizens which was equivalent to 500 dollars a month in today's money  Ben - The economic effects of the California Gold Rush can not be understated. There were countless technological advances industrially and in agriculture because of just how much people wanted to find gold. It brought countless profits to thousands of Americans and gave the economy a much needed boost. There were a lot of side effects, however. They needed water for the mining, which redirected a lot of it away from farms, drying up a lot of land. This left a large portion of California near destroyed.  Audrey - When people panned for gold that was called placer mining and when mining for gold was becoming more industrialized they started hydraulic mining which was where they would use pressurized water to blast rocks. It kind of left a mess and was destroying the environment but it was very effective. By the end of the 1850s mining for gold was mostly just a corporate thing.     The Dawes Act  Ebag - The Dawes Act in 1887 allowed the allotment of lands to individual indians not tribes and to extend the united states laws and protections and give indians territories I don't really know how to feel about this one i cant say its bad because technically we were giving indians citizen ship so they could get land just like us  Jonathan- So this act is named after senator henry laurens dawes.So this act actually completely reversed the long standing american policy which basically allowed indian tribes to have control over their land and practice their economic uses on their land, instead this act gave power to the president to divide the indians land. This act game men with families 160 acres, single adult men were given 80 acres and, boys were given 40 acres, while women got no land. Illy- So i mean i'm a little bit biased about this topic, but nobody ever really looks at it from the side of the native americans ,this topic also goes along with what i was talking about in the beginning and there are lots of native americans who didn appreciate this act because of the fact that they were here first so they didn think they should have to become a citizen just to keep the land and things they already owned for generations before then ,so while it may seem like it was a good idea and fair to the native americans it really wasn't i mean we pretty much said ok hey we are gonna let you have this land but not for your whole tribe or anything just for you individually and oh yea we’ll let you become  citizen in our country that we basically took from you guys!      Ben - From an honest perspective, without trying to assume that our ancestors had good intentions for everyone, this act seems to try and split and expand entire tribes to make their land easier to take. The plan that I can see, whether or not this was actually what they had in mind, was that it’d be easier to take a big piece of land from 1 person, instead of trying to take a big piece of land from a lot of people. The whole citizen gesture might’ve been more of a curse than a blessing too, because now if they wanted to keep any land, they had to follow any and all laws put in place at the time.   Caydan- i think that the dawes act was the people of the age trying to more civilize the indians by giving them land instead of them living in tribes trying to make them move like the men of that age  Audrey - All of the tribal lands were split into individual plots and only the native Americans who accepted these plots of land were allowed to become US citizens. That sounds like a pretty good deal but it went completely against how native Americans didn't feel like they should “own” land that they should just live on it and take care of it. And then in the end any of the land that was left was sold off to white settlers. So they took all their land, gave some of it back (with conditions), and then sold the rest.   Chinese immigrants and Mexican Americans in the age of westward expansion (Opens a modal)  Leirbag - Chinese immigrants in the 1820s was very few with a little 650 living in the us but by the end of 1852 over 25,000 chinese immigrants were attracted by quick fortunes of the gold by 1880 there were over 300,000 chinese  most in california many found employment in the transcontinental railroad alot of them actually got here using a credit ticket in which there ticket was paid in advance by an american businessmen who they were then indebted too for a period of work Few chinese planned to stay permanently but alot didnt have the funds to return home. Illy- so im gonna talk about mexican americans so in 1848 there was a treaty called the Guadalupe Hidalgo which ended the mexican- american war and it promised the almost 75,000 mexicans already living in what had just become the american south west land and citizenship now only about 90 percent of them actually stayed and became citizens, but of course shortly after they became citizens and got land and everything else they began to loose it just as fast as they got it and i mean honestly i'm seeing a pattern here this has basically happened to anyone who has any kind of skin color other than white it seems so they tried to fight for their rights as american citizens but people of authority just looked the other way as more and more people lost their land  Ben - Greaser Laws, Sunday Laws, and the Chinese Exclusion Act made it very clear just how racist these political figures were. I think it’s been long enough now (over 100 years) that we don’t have to absolutely give them the benefit of the doubt. I still think it’s crazy how many blatantly exclusionary laws were passed back then, like everyone was just okay with it. I guess it makes sense considering how long it took us to figure out slavery is bad.  Audrey - Las Gorras Blancas (the white caps) were a group of rebel Mexican-Americans who fought back against the white settlers taking their land. They tried to intimidate the settlers by burning their farms, homes and crops in order to reclaim their land. The raiding never had any substantial success and several white caps ended up getting captured and beat so many others eventually gave up.   Jonathan-Prohibited by law in 1790 from getting US citizenship through naturalization. Chinese immigrants were faced with discrimination beatdowns from american settelers in the west. Chinese immigrants were looking for a better life and would participate in the gold rush, however they had to pay to get in just because of them being immigrants, the chinese community ended up coming together to make cultural centers in cities like san francisco. White Americans began to make anti coolie clubs which were clubs to discriminate against anyone from the asian descent. These clubs resulted in violence against chinese immigrants and teardowns of cultural centers.   Little Big Horn  Ben - June 25-26, 1876. This was the day of the Battle of Little Bighorn, this battle has really made me think. The Native Americans weren’t the helpless savages that the early colonists paint them to be, and this battle just proves that more and more every day. The significant forces of the native people goes to show just how hard the U.S. worked to take their land. It wasn’t just a “Well this is here so, lets take it” thing it was definitely a fight. There was never any question in their mind what they wanted from, and for, the Native Americans. Illy-  the battle of little bighorn was known to the lakota and other plain indians as the battle of greasy grass, ok honestly this is probably the shortest battle i've ever heard of in my whole life it was only 24 hours, something i just found was that Custer who was the major General at this battle was killed and along with 5 companies of the 7th calvary so for y’all that don't know a company can have two dozen or up to 200 soldiers in this case Custer had a total of 221 men fighting alongside with him   Jonathan - at midday custers 600 men entered the valley of little bighorn word spread pretty quickly that an attack was soon to come. Custer's soldiers panicked and spread out when they had seen as many as 3000 natives charging towards him and his 200 men that were still together he and all his soldiers were then all killed in under an hour.  Audrey - The battle of Little Bighorn is also known as Custer's Last Stand. Colonel George Armstrong Custer led his battalion in an attack on the main Sioux camp in Little Bighorn. Custer was incredibly outnumbered by the Indians who ended up defeating them in the battle and killing Custer. Even though the battle was a huge success for the Sioux, they ended up abandoning their camp at Little Bighorn and fled, scared the US army would send more enforcement. This battle kind of marked the beginning of the end of the Indian wars. Wounded Knee  Illy- so this battle took place in 1890 was in other words a giant massacre that killed almost 300 lakota (aka sioux) indians, these indians practiced a dance called the Ghost Dance and believed that if you practice the ghost dance then you would get to see the new world when the gods cleansed it and got rid of all non-believers including non-indians, on december 15, 1890 the reservation police tried to arrest Sitting Bull who was a famous sioux chief, who the officers believed was a Ghost Dancer ,and in this point in time was not a good thing to be, they ended up killing Sitting Bull in the process of arresting him and that just rose the tension that was building up to this battle   Ben - 1890 was 14 years after the Battle of Little Bighorn, which emphasizes just how long they were fighting the entire Native American race. There was a three day blizzard after the massacre, and after it had ended they hired civilians to gather the dead and place them in a mass grave. The reaction of the American settlers was generally… positive. Many at that time were still not used to treating everyone like people, and there is an abundance of quotes calling natives “untamable creatures.”  Audrey - While trying to disarm the Sioux, a shot was fired and the US army opened fire on the Indians killing hundreds of men, women, and children. The few Sioux who survived fled. After the massacre, an official army inquiry not only exonerated the 7th Calvary but awarded medals of honor to 20 soldiers.   Jonathan- the troubles of wounded knee were not over yet, a virtual civil war broke out when two indian factions had a disagreement this fight left over 100 indians dead, Then 2 FBI agents were killed and the agency raided the area of the battle and arrested AIM  leader and held him responsible for the 2 deaths and he had life in prison.

When it comes to decisions brand leaders have to make, choosing the typeface that will live across your website and on all of your products is a pretty big one. Customers are going to see and interact with your copy throughout the life of your brand — and making a change to your design style will cause a ripple effect with lasting impacts.  Monotype is the largest company that is dedicated to typefaces. According to Jonathan Zsittnik, the Vice President of Commerce Channels at Monotype, the company has the world's largest library of typefaces, and thousands of type families, many of which are the backbone of key brands.  On this episode of Up Next in Commerce, Jonathan explains the intricacies that go into running and selling that massive inventory of fonts. Plus, he dives into the importance of choosing and properly licensing a font style and how it can impact a brand. Main Takeaways:   Would You Like To Update? — A brand is a living, breathing thing, and needs to change with the times. But updating a brand’s typeface may require more careful thought and planning than some may anticipate. How do you pick or create a typeface that works for both mobile and desktop, speaks to your brand’s identity, works in multiple languages, and meets different users' needs? Tune in to find out! It All Adds Up —  The Ecommerce experience does not begin and end with a customer putting an item in a cart and then completing a transaction. That experience needs to carry on after the purchase has occurred, because in order to turn a one-time purchase into a repeat customer, brands need to stay top of mind for their customers. Every part of your brand — including the typeface you choose — makes up the Ecommerce experience and should be taken into consideration. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next In Commerce. I'm your host, Stephanie Postles, co-founder of mission.org. Today on the show, we have Jonathan Zitnik the Vice President of commerce channels at Monotype. How's it going, Jonathan? Jonathan: Very good. Thanks so much for having me, Stephanie. Stephanie: Yeah, thanks for coming on. We were just mentioning that today's a special day. It's your 19th anniversary. And how lucky are we to have you on the show? Jonathan: Oh, man. It's crazy to have been here so long, but I've enjoyed the ride. And what better way to kind of celebrate that anniversary by talking about Monotype and all the things that I've done and see coming, than being here with you today. So thanks for having me. Stephanie: Yeah, it's going to be really fun. I think you're the first person we've had on the show that's been somewhere this long. So I think it'll be a really good conversation where you've actually been able to see a company evolve, and grow, and change. So I'm excited to dive into it. Jonathan: Awesome. Stephanie: I was hoping we can first start at Monotype. So I was reading a bit about it. But then I saw that you employ, I think it was somewhere around like 700 people and had really high revenue numbers. And I was wondering, what do you guys actually do? What is Monotype? And how do I think about the company? Jonathan: Sure. So I think probably your audience is largely not familiar with Monotype, but would recognize many of our flagship products. So if you've ever worked with the fonts Helvetica, Arial or Times New Roman, then you've worked with some of our key offerings. Monotype is the largest company that's dedicated to type. And we have the world's largest library of typefaces, where you'll find thousands of type families, many of which are the backbone of key brands. So the list of typefaces goes on quite a bit that that brands rely on every day. Stephanie: That's awesome. So are you guys purely a typeface design company or do you do other things as well? Jonathan: So type is really at the core of what we do, but we do have some other supporting businesses that all relate to helping brands express themselves and make sure that their digital expression is on point and translates across their various mediums that they communicate over. Stephanie: Very cool. So when I'm thinking about fonts, I guess maybe I'm a newbie when it's coming, or when I'm thinking about fonts, but oftentimes, I'll maybe go and look for free fonts or trying to see like what's out there. So how does Monotype make money and monetize these fonts? Jonathan: Sure. So the majority of our revenue comes from creative professionals that are working with type and those creative professionals could be internal, so working on behalf of the brands, at the brands, at those enterprises, or working at agencies, or even individual creative professionals that are in freeline design spaces. So we're really supporting the creative space and these are the people that know about type, care about type and know how to leverage it within their design projects. And understand that it can really be the backbone of a brand. So these are the people that are willing to spend the value in a typeface. Stephanie: Awesome. And I saw I think you guys developed some fonts I know like Times New Roman, huh, that's a favorite. Is that you guys who created that one? Jonathan: It is, that was a custom typeface at the turn of the century for the London Times. And so it's gone through many, many iterations over the years to catch up with digital times to make the progression that the type has gone from over the years from metal type through phototype and now it's a digital type. Stephanie: That's cool. So how do we think about types transforming over time? Like, what are the levers that make you guys want to change a font, or typeface, or edit it, or make a new one? Like, how are you staying on top of these trends and actually deciding like, "Ah, this would be a new way to maybe shift the fonts or create something new or even transition an old font into something more relevant." Jonathan: Yeah, that's a great question. A lot of our successful typeface releases come from either new opportunities based on the way that type needs to be used or updates to existing typefaces to make sure that they're catching up with the digital needs of today, right? So take Helvetica as an example. Last year we released Helvetica Now, and it was an update for Helvetica, which cleaned up some of the idiosyncrasies that had caught up with the typeface over the years and make sure that it has all the necessary characters that are used today, some adjustments so that the type looks great on screens versus some of the way the characters were drawn originally, and which didn't translate as well. Jonathan: So those types of updates are really common. And as I said, previously, when you're thinking about a new typeface, you want to think about the challenges that designers are having today and make sure that you're designing it for those needs. Stephanie: So what are some of those challenges, if a brand is thinking right now about I mean, what first comes to mind is maybe creating a logo or something like that? And I think for us, we're pretty, like easy standard. I think we just use like Futura or something like that. But for people who are looking to actually develop their own typeface, what are some challenges they might encounter down the road when it comes to maybe designers trying to use that? Jonathan: Yeah. So if you want to think about all the places where the brand needs to be represented, right? So if you are going to be using your type in an application, like a mobile application, you're going to make sure that the type performs its small sizes, that it looks great on screen and that the readability remains strong when it's presented that way. And you also want to think about your audience, right? Jonathan: So if you're selecting a typeface, and you know that you're going to be communicating with an audience that's global, you have to make sure that you have the necessary characters to ensure that you can communicate in all the languages your audience uses. So those are just a couple of the considerations, but those are big ones. Stephanie: No, that's some good things to keep in mind. So when I'm like... what are some of the maybe top typefaces right now that you see a lot of brands going with? Like, is there anything new that's happening or shifts happening in the world of fonts that maybe hasn't happened up until now? Jonathan: So I mentioned the remaking of typefaces and updating them and that's a big trend. A lot of the big name typeface families like Helvetica and you mentioned Futura are used by these major brands because they know them, they're familiar with them. They know they perform well. They're versatile typefaces, and they're just beautiful designs. And so these updates that are happening, it's a trend that you're seeing more and more of, and what the audience is getting is a broader range of typeface suites which can be exciting so you can extend the family to include more decorative designs so that you can extend the family designs to be more creative with your work. Jonathan: You're getting broader character ranges, which is excellent for taking your brand to different places and geographies. And also some visual adjustments to make sure the performance is there, regardless of what the typeface is. So that's a big one. Stephanie: All right, cool. So I wanted to get into your role a bit. Being at the company for 19 years. I want to hear how it's evolved and what your day to day looks like right now. Jonathan: Sure. So when I started back in the day, it was still really at the dawn of Ecommerce. It was kind of an exciting place to begin, certainly for Ecommerce marketing. Pay per click advertising was just emerging. So I don't think even Google had introduced AdSense at that point. So it was kind of an exciting time and we used all of those things really to establish our Ecommerce business, which when I started, had really just launched. Jonathan: And so at that point, we developed myfonts.com and through my time we've gone through numerous acquisitions. So we have a host of commerce properties, myfonts.com the largest of those today. And so it really went from an Ecommerce marketing roll up into managing operations for an Ecommerce business and took a brief turn in that to focus on a subscription offering and then helped build out a customer success and support organization to help the greater Monotype business grow and ensure that our customers including our enterprise, customers, really have the support that they needed. Jonathan: And more recently kind of turned my focus back over to the Ecommerce world. So now the role is managing the global digital commerce business, which includes our font sites, some of which I just mentioned, a little bit of our indirect business and a relatively new business that's fun and growing, which is called flip font. And it's an application that runs on a mobile phone unless you've changed the UI typeface to one that you purchase from a store. Stephanie: Oh, very cool. Jonathan: Yeah. Stephanie: So what does that look like overseeing the different Ecommerce channels? Like are there different maybe learnings that you're getting from having different websites to be able to like see trends on or see like which ones are doing things successfully, and which ones maybe need to have a little help. What kind of things are you seeing by having that oversight of multiple websites? Jonathan: Yeah, well, that's certainly one of the challenges right? Because it's a lot of businesses rolled up into one business. But there's advantages of that too, right? Because you can test out different techniques on one website. And then if it works out, you can roll it out to others. And one of the challenges is that they all have slightly different audiences, the customers coming from different places, like if you look at the different customer segments, they're not identical. They have different preferences and so you have to act and think in the interest of these different audience segments. Stephanie: Got it. So where are these customers coming from right now? Like, what kind of acquisition channels are you guys using to find new customers and then how are you treating them differently depending on the source of where they came? Jonathan: Yeah. So most of our customers, one of the advantages that we have is that a lot of our typefaces have been in use for many years. And so when a typeface gets, it's purchased and sees used within a project, and that project will spurn additional use, right? Especially if it's in the hands of an agency and an agency might use it with multiple clients. Jonathan: So a lot of people will come to the channels already knowing exactly what they need. And so a lot of the focus is on making sure that we can get that customer who already knows that they need to use this particular font, get them the font, get them in the cart, make sure that they know what license they need, so they can get back to designing as quickly as possible. So that's a lot of the emphasis there. Jonathan: And then the other point of emphasis is really on the discovery phase, and this is for the designer that knows that they need a particular type of typeface, they might have a classification in mind or a couple of different qualities in mind that will suit the needs of their project. So what are the tools that we can provide them, how can we help them filter down the inventory of a hundred thousand plus fonts so they can get down to the one that's really going to be the perfect design, perfect choice for their design. Stephanie: How do you go about personalizing that because I could see it being quite a bit of consulting and education depending on maybe the industry and I could see people also coming in with quite a few wild ideas where when I was looking at design recently it's like, "Okay, don't go too crazy. Don't go too designery or too out there because that stuff will probably got out of style soon." And like, how would someone go about recommending what kind of font a brand should use? Jonathan: Yeah, so I think there's a couple things you can focus on. One is just the making sure that you provide enough tools to help someone navigate the inventory. And so if you understand the attributes of your inventory, you can make it easy to filter down. And also you can go take a look at just the Sans Serif fonts. And then you can look at the Humanistic Sans, not to geek out too much on type here. No, but you can kind of narrow down your selections by the various characteristics of the typefaces for the person that has an idea of what they're looking for. Jonathan: But I think the more fun thing that we do is making sure that we give our customers a sense of how the typeface is going to perform before they purchase, right? So you need a lot of tools that allows the designer to experiment with the typeface before they purchase it. So before they lay their money down, make sure they understand what it's going to look like. And the visuals that we supply are critically important. So making sure that we have the images that don't just show the range of the typeface that's important, but also some fun examples of what it might look like when it's designed. So really just show off the characteristics of the type. Stephanie: Yeah, that's really important. I was just thinking when we're going through making website changes and stuff, I always wish they could just be an easy, quick switch of like, what does it look like with this font, this font, and maybe you guys have this functionality, and I just never knew it. But oftentimes, it's me like trying to preview and going back and changing again, previewing again. And after maybe changing it a couple times, I'm like, "Oh, I'm kind of done." So do you guys have that functionality? I think you mentioned it with the app earlier. But do you have that for desktop as well? Jonathan: Yeah, there's different ways that you can do that. And depending on what tool or what subscription you might have, there's different ways that you can experiment with typefaces. And that's always been a huge problem for the type industry, right? It is sort of, how do you allow someone to experiment with your product, but make sure that you're not cannibalizing your sale? So that's kind of the trade off that we have to work through. Stephanie: So I'm interested in thinking about metrics when it comes to changing typefaces. I mean, I'm sure you guys have case studies where different fonts produce different results, can you speak through some of that? Jonathan: Well, it's difficult to predict. So unless you're working with a typeface that has a track record, and you're doing a new version, you're actually not certain what you're going to get, right? So typefaces are a lot like music where there will never be enough created to satisfy the creative needs, both on part of the person that's doing the creation and the designers that are consuming what's created. So a lot of it is strategic, right? Jonathan: So we know that there are certain needs that need to be served so we'll do a release there. And some of it is creative expression. Stephanie: Got it. And you mentioned that a lot of people come to you knowing what they already want. Do you also do paid acquisition for getting customers to find out about you. Like if it was someone like me and I'm looking for a brand redesign, how would you go about targeting someone who maybe I don't really know much about fonts or for me if I wanted the font I might open up maybe Adobe Photoshop and get it in there and like I wouldn't actually know the process of maybe even buying one and licensing and stuff like that. Stephanie: So how would you go about maybe pulling in a new customer like me with very low awareness? Jonathan: Yeah, sure. So for targeting individual creative professionals, paid search of course is huge and all the typical advertising methods and affiliate programs, which bring people in and will, on the paid search side will also invest in terms where that are not product specific unless there's someone that's looking for a particular style of typeface we can bid on those terms or using terms like something that's more broad like font or by fonts as well. And for the larger customers that we work with those might come in to the agencies that we partner with as well. Jonathan: So if we doing a, involved in a big brand design, it's not uncommon for us to partner with the agency that's working with the brand. So some business comes in through that way. And in other cases, we might see that a brand has started to work with one of our typefaces, and we'll get to know them a little bit better and see if we can expand the relationship and then help them with the next steps in their brands. And maybe there's different ways that we can help them as they prepare to make that move further down the digital path. Stephanie: Got it. So you mentioned partnerships earlier, and I wanted to maybe touch on that a bit because I think maybe in our prep notes you'd mentioned partnering with other technology providers to basically have a more creative and collaborative approach when it comes to design and the whole ecosystem in general. I was hoping you could talk about what those partnerships look like and how you guys are thinking about the design and not just typeface, but the industry as a whole. Jonathan: Yeah, so I think on a more practical level, there are lots of Ecommerce providers that we partner with to put great quality type in the hands of their end users, right? So if it's an Ecommerce platform that has their own templates, you might find Monotype typefaces built in there. So when you're doing your design, you don't have to choose from the standard website, web safe typefaces that you know, are going to be resident on just about everybody's machine, right? So you have a nice variety of selections to choose from. So that's one way that we partner with which puts our type in the hands of more end users. Jonathan: But I think that like when you're thinking more broadly about collaborations with Ecommerce, the industry has just evolved so much. And today Ecommerce when you're thinking about your Ecommerce experience, it's not really just about those few precious minutes that the customer spends on the website, right? To do it right, you really have to be thinking about how that Ecommerce site supports the brand and what are the key elements of a brand that you want to inject into that Ecommerce experience. And then that Ecommerce experience really broadens beyond just shopping. Jonathan: It's all the things that you're going to do to retain that customer and get them to think about you and create that positive sentiment when they're not shopping. So when the need arrives, they're right there going back to your site to purchase something new. Stephanie: Yeah, that makes sense. So talking about retaining customers, a bit and what came to mind was actually licensing for some reason, because that's also an arena that I don't fully understand. And it sometimes scares me of like, "Oh, is there certain licenses we should have around this? And like, how do you protect yourself and your company?" So I was hoping you could touch on what are some of the failures a new Ecommerce company might be making right now, when it comes to typefaces and licensing and not having the right licenses. What do you see happening right now that could be prevented that a lot of people might not know about? Jonathan: Yeah, font licensing is complex, and it's always been complex. And I think that's something that the industry Monotype included, needs to work on to simplify that and make it easier on our customers. And so a traditional font license, the traditional found license that we've been selling forever is a desktop license. So that allows someone to use a particular font on their machine, possibly multiple machines depending on the license. They do vary. And that's one of the bits of complexity right there is that... so take my fonts, for example, we have thousands of partner foundries that sell their products on our site. Many of which have their own licenses. Jonathan: So that puts a lot on the customer to look through and actually read the license and understand what they're getting. So one of our strategies there is to consolidate on fair industry standard terms there. So that the user is going to be more familiar with the license that they're purchasing. But even looking beyond that, it gets more complicated when you look at different use cases for the type, right? So if you want to use a font on the web, that's going to require slightly different font file as well as a different EULA, excuse me a license agreement and you have to pay attention to the amount of distribution with the font as well. So, are there limitations on the page views associated with the font? Jonathan: And, so really additional use cases oftentimes are tied to additional license types. So if you want to use a font in a mobile application, or you want to use it in digital ad, you might require a different license to go along with that. So there's a lot of different formats there that they have to pay attention to. And it's our job as a marketplace to make sure that we educate our customers when they come to the site and help them find the right license. Especially people that are looking to be compliant with that. [crosstalk 00:24:46]. Stephanie: Yeah, licensing is definitely tricky. I mean, how do you... like if I'm using photoshop, for example, and they have all the fonts in there, and maybe I'm using that to build my own logo, or build a page or something or some kind of like PDF, or if you're using a website builder tool that already has a bunch of fonts like is very different type of licensing thing you should think through, or are you kind of already covered because maybe Adobe already has like an unlimited forever license? Jonathan: Sure. Speaking in generalities here, right, because there are different font license agreements. But typically, a font license for a desktop font license is going to cover use on your machine. And as long as that font file isn't traveling to another user, you're good, right? So the output of that font as long as it's static text that is no longer leveraging the font file can be distributed. And that's the case with most, not all, but most font licenses. Stephanie: So I want to kind of touch on some higher level Ecommerce trends because you've been in the industry for a while. I think you could have some fun answers for them. First one is what kind of trends or patterns are you excited about right now in the world of Ecommerce? Jonathan: I think the thing I'm most excited about right now is machine learning. And it's application for recommendations. So recommendations within Ecommerce has been a problem that we've tried to solve collectively for 10s of years now. And I feel like it's really turned the corner in the past few years. The recommendations you get on store and your music service or other places where it's being leveraged have really gotten good, it's impressive, and it's exciting. So you can go from a place where you're making recommendations that maybe weren't well informed, and just come across as noise to recommendations that are personalized and accurate and are really helping your customers solve a problem. So it's interpreted really well and I think there's a lot of potential there. Stephanie: Yep. I completely agree. What about COVID? Have you guys experienced any kind of impact from COVID right now? And how do you see the industry moving forward after this? Jonathan: Yeah. So I think everybody's feeling some sort of impact. I think the companies that have really seen the most positive effects of it are the companies that have the brick and mortar locations where their Ecommerce businesses is taking off, because that's where the activity is moving. And we have digital goods and digital delivery. Jonathan: So we didn't see that. We saw some initial impact and as our customers spend is really tied to marketing and the agency world which was hit pretty hard. But we've since seen a lot of recovery, which is great. We're seeing a lot of positive signs. And when you look at the various products that we sell, we're seeing some really encouraging and some growth signs, particularly on the use of type on the web which makes sense that kind of speaks to the broader industry of Ecommerce. So that's been a strong point. Stephanie: Yeah, that's really interesting. Are there any other surprises that you've seen through all this where you're like, "Oh, now there's all of a sudden an industry around this, or people popping up asking for this that we didn't have before." Jonathan: The ripple effects of this are huge, right? And so, I think initially, it was kind of hard to put two and two together and see what the impact would be. But you think about it, it makes sense when you see companies like Zoom or DocuSign having success that they are and all of this and so we've kind of seen the effects of that as well and are just trying to cope with it like a lot of companies. Jonathan: And I think in some regard, it's been easier than then we anticipated. I'm very thankful that we're here today and not in 2010, right? If you can imagine trying to do the things that you go through on a daily basis, without the collaboration and communication tools that we have today, it would be incredibly challenging. Stephanie: Yep. Are there any challenges that you guys are facing? Of course, it wouldn't be 2010 levels challenges, but is there anything right now where it's kind of like, feeling a little tough to do X, Y, or Z based on the changes in the market or the increased demand? Jonathan: I don't think that they're market driven. I think if you look at the things that we need to do, everything is totally accomplishable. But that doesn't mean it's not without challenges, right? So you have a team and you work together. There's just something. It's difficult to put your finger on, but I don't know if it's the morale of the group or just that whatever you get from being able to socialize in person, so you feel the effects of that when you can't meet in person and just have that initial catch up. But you know, you can kind of do that informally but it's definitely missing something. Jonathan: And so I think everybody kind of has to find different ways to make sure they get that in their life, in their day to day. The other thing that I think is more challenging is when you're trying to solve a difficult problem, and you can't collaborate the same way. So like I said, Zoom is great, but there's really no substitute for getting five people in a room together with a whiteboard and just working through a problem with everybody's undivided attention. So I do long for those days. And hope that we can do those types of things again soon. Stephanie: Yep, I long for the happy hour day where you can just get together again and not worry and catch up on all things work or not work if you don't feel like talking about it. Jonathan: Absolutely. Stephanie: So I want to hear a little bit about more about Monotype and the successes behind your guys brand. What do you see is working? Like how do you portray your company in a design oriented, beautiful way. Jonathan: One of the things that we've had success with is putting emphasis and attention into our communication materials. And if you look at the newsletters, they're very heavy with imagery that shows the type, shows it off, shows how it can be used. And it's really gratifying when our customers tell us that they find these materials which are ultimately marketing materials that are designed to sell, and inform, and educate that they're inspirational to them. Now, so it checks a lot of boxes there and I definitely perceive that as a victory. Stephanie: How do you go about building those materials? Like how do you know what's going to connect with the customer? How do you know... what one person might think is beautiful another one might be like, "Urgh." So how do you build something that connects with the majority of your customers or prospects? Jonathan: Sure, well, you certainly aren't going to please everyone. You need to rely on talented people that are great with type and see the unique value in an individual typeface and know how to use it and design that shows off its characteristics and present it in a way that shows how it might likely be used by a typical project that would work well for. Stephanie: Got it. Do you ever have to educate new customers in a way of like, "Well, here's what we did with this font, like look at that little curlicue there, that's newer," like showing people why something special? Jonathan: Yeah, so I think, readability, legibility might be a good example. And you could read all day on the various aspects of a typeface that can aid or hinder readability. And so we'll put a lot of time into the generalities of what makes a typeface more legible, more readable. And then certainly, if there's an individual typeface that has some of those characters or those properties we would point those out. Stephanie: Yeah, there's a email newsletter, I can't remember who it is, but they essentially show just how subtle design tweaks and fonts make a big difference in like portraying whatever you're talking about. And it was displayed in such a way that made it be like, "Oh, of course, this one looks better," or, "Oh, we're talking about food in this one." Like you can kind of get a feeling depending on the type of font and I just thought that was a really nice way to just show two things up against each other and it'd be general accepted like which one looks better, which one connects with the brand depending on what the product was. Jonathan: Yeah, that's a great way to present it because great typographic often goes unnoticed. Stephanie: Yep. I think that was kind of their point is like, you wouldn't think anything if you just saw this by itself. But if you saw a random font next to it, or a font that was just like so off brand, it would be very obvious and you would not feel disconnected with it. So I like that. Jonathan: Right. Stephanie: All right, let's jump into the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to throw a question your way and you have a minute or less to answer. Are you ready, Jonathan? Jonathan: I am ready. Stephanie: All right, what's up next on your Netflix queue? Jonathan: Cobra Kai, high recommendation from my wife. So she's jumped in and I'm trailing her. But that's gotten her through the pandemic. Stephanie: I like it. I saw that being the trailer playing and I was just about to watch it. So I'm glad that it has good recommendations from your wife. What's up next on your reading list? Jonathan: It's a book I think it's called Writing Down The Bones. And it's a practical guide to doing more writing and getting more practice at it and ultimately improving your writing skills. Stephanie: All right, cool, I like that. I thought it was going to be A Practical Guide To Typography. And I would say, "Man, Jonathan, you are a lover of typography." Jonathan: I'm all in. Stephanie: I like it. Where are you traveling to when you're able to go out and about again? Jonathan: Oh, Cocoa Beach, Florida is my happy place. And I'm looking forward to getting back down there again. Stephanie: I love Florida. And the last one, if you were to have a podcast, what would it be about and who would your first guest be? Jonathan: Oh, wow. Let's see. Well, I guess I can't steal your idea and talk about Ecommerce. Stephanie: You can just keep coming on the show. Jonathan: I might have the chops to talk about fonts with an Ecommerce audience, but I don't think I could handle it there. So let's see, I might do something just on creativity in general, because I love the arts. I love expression. And so it'd be fascinating to pull in different people from different genres and have them speak about their art form. And who would my first guests be? Stephanie: Yeah. Jonathan: Let's see, I'll probably pull in a musician. And let's see. I'm really excited about the new Deep Sea Diver album that's coming out next month. So Jessica Bazzi. Stephanie: Cool. That sounds great. All right, Jonathan, well, thank you for coming on the show and teaching our audience about all things fonts. Where can people find out more about you and Monotype? Jonathan: So you can follow me on twitter @Zitnik and for Monotype, it's just monotype.com. And you can learn more than you ever wanted to know about fonts from there or you can go to our flagship Ecommerce store myfonts.com. Stephanie: Awesome. Thanks so much.

Show NotesAfter taking a few weeks off of recording Jonathan and Angela discuss everything from Star Wars to passwords to what keeps Angela up at night. There are some bloopers to keep it real and difficult conversations about balancing the users wants with the integrity of system. Angela and Jonathan deep dive into conversation to talk through a difficult product feature decision. In this episode listeners get a peek into real conversations behind the scenes of building a digital health product.Password hygiene is a topic that we discuss a lot in this episode, there are some great articles if listeners wanted to dive into that information. Here are some articles:Cisco MagF-Secure BlogPassword managers are a great way to use unique passwords as Jonathan mentions in this episode. Examples of password managers are 1Password and LastPass.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)Transcript[00:00:00] Jonathan: oh yeah, we got change to not Thursday.[00:00:03] Angela: It's like perfect timing.[00:00:06] Jonathan: changed the lawnmower now it's a different kind of lawnmower.[00:00:08] Angela: louder.[00:00:11]Jonathan: Uh, hi, I'm Jonathan Bowers is wait, I'm doing the intro.[00:00:17] Angela: Oh, no. Okay. Okay. Okay. Okay. Okay.[00:00:20]Intro Jonathan: Hi, you're listening to fixing faxes. And I'm your host Jonathan Bowers[00:00:26] Angela: and I'm Angela Hapke. And so I haven't watched any of the Star Wars movies.[00:00:37] Jonathan: at all?[00:00:39] Angela: Ever at all. So I've watched bits. Like you, you always see clips of them or maybe bits and pieces, but I've never seen a full Star Wars movie.[00:00:50] Jonathan: At all? And you are, you are, you are a member of society?[00:00:56] Angela: Okay![00:01:01] Jonathan: Did, how does, how did you manage to avoid watching any Star Wars[00:01:05] Angela: I'm not even sure. To be honest. I, I I'm unsure of how this has all came about. And I'm one of those people that don't want to jump in in the middle. So I always felt like I had to watch the previous ones before I could watch the new ones. And because of that, I've just never put in the effort.[00:01:23] Jonathan: It is a lot. It's a,[00:01:24] Angela: It's and it's an effort,[00:01:26] Jonathan: it's a saga.[00:01:28] Angela: I've started watching the Mandalorian.[00:01:31] Jonathan: Oh, good for you. Do you like it?[00:01:34] Angela: I really like it.[00:01:36] Jonathan: It's really good.[00:01:37] Angela: is, only, I'm only on episode three, I think three or four. And, um, I really like it.[00:01:47] Jonathan: Why do you like it?[00:01:49] Angela: Oh my goodness. Well, it was. I don't know. I like it. It feels like an old, like, it feels like a Western,[00:01:58] Jonathan: It is, it is a[00:01:59] Angela: right yet to set in some time. And, um, I don't know. There's something charming about[00:02:13] wait, are you a big fan[00:02:16] Jonathan: I'm a big fan.[00:02:17] Angela: or a big fan? Okay.[00:02:19] Jonathan: I mean, I wouldn't say I'm a big fan. I would say.[00:02:22] I'm a pretty big fan. Yeah. I really like, I like star Wars. I like, uh, I've played some of the video games. Um, I have a board game, this like cool X-Wing game. That's that's quite fun. I bought just, just before COVID and now I have no one to play with. Um, Zach's too little and it's not Julie's kind of game.[00:02:35] Okay. Um, yeah, I'm a fan.[00:02:38] Angela: So I find fans always have an order that they suggest that other people watch the movies in.[00:02:47]Jonathan: I, I, my belief is to watch it and it's how I think I want to watch it with Zach when he's old enough is, uh, four or five, six. one two, three,[00:02:57]Rogue One, uh, then four, five, six, again. Yeah, that's seven, eight, nine. Then you can go back and watch Solo and whatever the other one was.[00:03:08] Angela: Okay. So I think I'll just watch them in release date order.[00:03:13] I think I might watch it with Alex. I think she's old enough to watch all of those.[00:03:18] Yeah.[00:03:19] Jonathan: You never, you never not old enough. Yeah. Yep, two.[00:03:25]Password Resets[00:03:25] Angela: But that's uh, what are we going to talk about[00:03:29] Jonathan: I have no idea. Honestly, I have no clue. Um, I would like to get to some community stuff at some point and some interviews or some guests, but, um, we can just talk about like, what's going on in product land. Uh, we can talk about password resets.[00:03:47] Angela: Password resets.[00:03:50]Jonathan: so , uh, it was hard to read your emotions in that meeting just now that we had, when we were talking about password resets. so I wasn't sure if you were upset, if you were disappointed, um, in like the way that product has been built, if you were disappointed in users,[00:04:03] Angela: God, you're going down a rabbit hole, Jonathan.[00:04:05] Jonathan: Yeah, no, it's just, it was very difficult to read you to read you on the video call. Like w there was very little, uh, body language to go off of. Um, and I was, I was watching, like, I flipped to, like, I often just flip to like see everyone mode so that I can, like, I just find that better.[00:04:20] Angela: Oh, I like the gallery view better on[00:04:21] Jonathan: yeah. Gallery view. Thank you. And, uh, yeah, you just, you were just seemed like maybe something was going on. I thought I'd check in.[00:04:30] Angela: this is so funny. my nonverbal can be quite loud sometimes.[00:04:34] Jonathan: Sometimes.[00:04:35] Angela: Yup. And I think when it's not, people tend to be like, What's up. What's going on,[00:04:43] Jonathan: The silence is just as[00:04:45] Angela: Okay. No, no. I think for me what it is is, um, Things have gone relatively smoothly with product development thus far. We have always kind of had this good, a flow of, of maybe not knowing exactly what our user needs next, but having a really good idea of what they need next.[00:05:12] And I feel like with this password reset, um, or lack of due to the the encryption, the end to end encryption that we have on this, on this product is I, not that I feel like we're letting our users down because I think there's massive pros to this and we have to communicate that somehow. But I also feel like this is like a bit of a disappointment factor with them that we can't just do a password reset.[00:05:41] Jonathan: Yeah, it seems like uneasy feature. Like it seems like something that everything does. I forgot my password. I'll just reset it.[00:05:48] Angela: Exactly. And maybe talk a little bit about why we can't just do that because I don't think I can talk that well about it.[00:05:56] Jonathan: That's fair. Um, yeah. So the previous episode, I think we talked about the fact that this Clinnect is encrypted end to end. We, we, as the builders of the product, can't see anything. There's, I mean, there's bits of stuff that we don't encrypt because we need to, like, we need to know who the referral goes to, that sort of thing, but we can't see any patient information.[00:06:16] So all of that information is completely hidden from us. The only way to unlock that is with the password from the user that unlocks that data. Right. So if they that's the key, that's literally the key. If they lose that or forget that they've lost the key. And so we can't go in and recover that data for them.[00:06:37] Angela: Exactly.[00:06:38] Jonathan: So it different than, uh, and the example that Chris was giving like Facebook, right? Like if you lose your password on Facebook, you just go in and request a password reset. Really, all they're doing is just verifying that you are who you claim to be. So they follow up with maybe a message on your phone or an email or something, and they give you a little link.[00:06:59] That's just proves that you still have access. Like you are. Still Angela. Um, the person requesting this password reset is Angela. So they go through something that they trust, like an email to send you a link, and then you click on that. And then that's like, okay, cool. We'll just throw away their old password, give them a new password, except that for us to do that, um, that would literally mean throwing away the key.[00:07:21] We don't have another key like that. That was the key. And so if you've forgotten the password or. Um, lose, you know, lose that password. You have lost the key to accessing the system. That's that's its strength. Um, but also the weakness from the perspective of the user, because now they can't access the data and we can't get it back for them.[00:07:43] Angela: And we, and that's the key right there too, is Facebook can give me back my password because they can see everything.[00:07:49] Jonathan: They see it all.[00:07:50] Angela: We don't see it all. We can't give you back your password. So we've had some users that have bumped into this, and we've had users that have reached out to me personally and gone we need this feature.[00:08:00] We need a password reset on, on, um, this application. And I think it's the first time that, you know, It seems like you say an easy fix. It's not an easy fix. It's not, it's not. Yeah. Um, it would compromise the integrity of the whole application if we just allowed a password reset. So we can't do that. Um, we've built this product, um, to be as secure and private as it is.[00:08:28] I mean, we just can't compromise that. So we're stuck in this really hard place where we have users that want to feature that they're used to seeing on many of them, their applications that they have without, you know, without even the need to understand why they, they don't have it here. Um, yet frustrated that they don't.[00:08:49] And so that was what you were seeing today in the call, I think was just my, my inner turmoil around really wanting to please the customer on this, but knowing, um, that pleasing the customer would, um, would degrade the integrity of the product. And I'm just not going to allow that.[00:09:05] Jonathan: Yeah. I think that's a good stance as uncomfortable as that can be sometimes, um, is to do what is right for the product. And in that, in that case, it's actually what's best for the patient.[00:09:17] Angela: exactly. And we do have to, we do have to go back to that. Um, and I think you often see that in our meetings is, you know, I'll kind of go, okay, well, hang on at the end of the day, what we're doing is we're ensuring a very safe product for our patients. We're ensuring that their information is being handled in the most appropriate way.[00:09:39] And, um, that's what it comes back to with this one again. Um, yeah, I'm just, I'm not compromising on the quality of the product on this one. But damn, it makes it hard to have that conversation with the users when it's, they don't understand it. They're not supposed to understand it. That's not for them to, I don't, I don't want to expect them to.[00:09:57] Jonathan: I don't think that they need to understand the technical details, but I think, I think there is an opportunity here to really show the users what good password hygiene looks like and why that's so important[00:10:10] um, we still, we need a way to allow them to recover because it's equally, it's equally bad for the patient. If,[00:10:17] if a specialist has received referrals and they can't get access to them[00:10:22] Angela: Exactly. Exactly. So, yeah, we, and I think that's why in the end, what we ended up talking about was, um, a multilayered approach to this in that we have like plan A, B and C around account recovery.[00:10:39] And how are we going to ensure that our users can get back into their account? Um, cause like you say, if you know. We can't just reset the password because that compromises it. But we also, can't not let them get back into it. Cause that compromises too.[00:10:57] Jonathan: Yeah, and it, it just brings up so many interesting problems in this space and it it's the, it's the intersection of sort of, of technology and security and, um, the users, um, you know, the ease, the ease of[00:11:10] Angela: Exactly and that's yeah, that was what was frustrated with is I'm like, Oh, we are the ease of use.[00:11:19] Jonathan: I do think though. I really do think that if you can somehow treat this as an opportunity to show our users why this is important, um, that will benefit them, not just for this product, but across all of like other,[00:11:35] Angela: Yup. Yeah.[00:11:36] Jonathan: if they're reusing the same password, um, that's not great if they're also using pastors that are just easy to[00:11:41] Angela: Too easy to forget.[00:11:43] Jonathan: Yeah. That's and that that's that hints at this like weird problem in, in, in security, which is you want passwords that are very secure. but you also want them to be usable,[00:11:54] Angela: but not too usable, but somebody could pick to guest them.[00:11:58] Jonathan: Yeah. So it's, it's very, very tricky, but there are, there are tools that exist to help you with this. So we require everyone on our team to use a password manager. And so, um, like no one, no one on our team knows any of their passwords.[00:12:13] Angela: Right.[00:12:14]Jonathan:  It's, it's managed by a tool that generates this randomly long, like this random string. That's very long. It's very, very hard to guess. I have a high degree of confidence that, um, all my passwords are unique.[00:12:26] I don't even know what they are, and even if they were to, even if they were to, uh, find my password, you know, say, say my password for Facebook was compromised. Like somebody, all of Facebook's, um, the database and. Like let loose all of the passwords. And this has happened lots of times.[00:12:43] There's lots of examples of large sets of data being hacked. And you can go and look like, look up your passwords and see if they've been hacked. Um, but the only thing they'll be able to get into is that one account, they won't be able to then get into a bunch of what other things, um,[00:12:58]Angela: you're not using the same password for[00:12:59] Jonathan: not using the same password for everything.[00:13:01] Yeah.[00:13:01] Angela: So the, um, I think the interesting part here though, is you guys are a sophisticated tech company.[00:13:15] Our users are not sophisticated tech company or sophisticated technology users and, um, almost most cases too. Right. And so that's where yes, that's where the turmoil was that you were seeing on my face in their meeting today is just really trying to figure out what's the best thing for our users and how to manage.[00:13:33]And I think the solution that we came up with is a tailored solution to the users that we have. If we had some very sophisticated users, we would probably suggest something like you just mentioned that you guys use for them. It's not going to be the case. It would be more of a sophisticated account recovery,[00:13:56] Jonathan: Yeah,[00:13:57] Angela: but it can't be this time. Um, it'll work, it'll be secure, but it's tailored for our users to, yeah. And so, yeah, that was an interesting one though. Like I say, up to this point, we were. I think we've really, we've really like, kind of had like some bumps, but not, not too many bumps.[00:14:16] And I feel like this one was the first like bigger usability bump that we've had.[00:14:23]Jonathan: I'm going to come back to the, like the education piece here. I actually think that if, if, uh, if someone is relying on password reset, um, That like, that's not good practice regardless. Like you shouldn't be doing that. So, so, you know, if you sign up for a thing and you're like, wow, just whatever, I'll just put in a password cause they make me, um, and I'll rely on password reset. Um,[00:14:46]Doing a way with it passwords is, is actually a pretty good sss arguably that's an interesting take on security is you just don't have passwords every time you want to log in. We just send you a special thing in your email because we trust that your email hasn't been compromised.[00:15:03] So we just send you a thing, an email, and you just click on the thing and it opens up and that's, that works for certain types of applications. It doesn't work for us because, because everything's encrypted and we can't send you that thing, because we can't get in.[00:15:15] Angela: Yep. So you're, you're wondering, is this a really good education opportunity or an awareness opportunity for our users to say, Hey, what'd you call it? Password hygiene[00:15:28] Jonathan: Yeah. Good password[00:15:30] Angela: Yeah. Here's some ideas. So. Um, the only reason I hesitate and don't jump, I think that is, I just feel like, Oh my gosh, is it another thing that we're going to have to awareness, educate, et cetera, et cetera about, um, do we have the bandwidth to also do that[00:15:50]does it take a lot of bandwidth? I don't know, but I think when you're so heads down in a startup and then you realize your is bumping into something like this. And then someone like yourself is like, this is a great opportunity to teach them password hygiene. I just feel like, Oh my God, another thing really, um,[00:16:09] you're not wrong.[00:16:10] I'm just like, I feel like I've just fatigued a wee bit.[00:16:14] Jonathan: that's fair. That's fair. And it's a funny, it's a funny piece though. Like it's different if it was, you know, if, if, if users were, you know, boy, I wish it did this feature. Right. And we can, we can kind of talk about how, um, okay. I mean, we don't really see the value in that, at least not right now, but this talking about access to the whole thing.[00:16:34] Angela: Yeah, like this is integral[00:16:37] in into the application. Yeah, I know. Yeah.[00:16:44]What Keeps You Up at Night?Jonathan:  what else keeps you up at night?[00:16:48] Angela: You know, so this was a, um, somebody said to me the other day, when I was explaining to them what Clinnect was and what we were doing. And he says to me, he's like, Oh my gosh, all that patient data. Doesn't that keep you up at night? And do you know, because of that, what we were just talking about with the systems that we've put in the fact that no, you know, it's very hard to get into an account.[00:17:16] And even if you're just to get an account, you get into one account know, that's it like, because we've put up, we've done privacy by design. That actually does keep me up at night. What keeps me up at night now is like, We got to get more users.[00:17:35] Jonathan: Okay.[00:17:36] Angela: what's keeping me up at night right now. I'm like, we've got to get more users and we're at a weird, um, balancing point because we have specialists and we have primary care providers.[00:17:47] So we have two sets of users. One type of user wants more of the other type of user on before they jump on both ways.[00:17:57] Jonathan: chicken and egg.[00:17:58] Angela: Chicken and egg. And so, so, you know, like, and I think that's why you just kind of use the double barrel approach and just kind of push both at the same time. And hopefully you get to that balancing point, but that's, what's keeping me up at night right now is everybody's just a little bit sitting back and waiting and I'm like, no, just do it.[00:18:25] Jonathan: And it's, it's funny, like back, we talked about this eons to go, how there is this, it is kind of a marketplace. in that you've got specialists who need to receive referrals from a primary care providers and primary care providers who want to send a specialist and you're right. They both want more of the other because it becomes more valuable. If there was all the specialists on the system, then all[00:18:48] Angela: All the primary[00:18:49] Jonathan: providers would be like, Oh, sweet.[00:18:50] This is, this[00:18:51] Angela: And if all the primary care providers were using there'd be specialists, clamoring to get on.[00:18:57]Jonathan: it does feel like a little bit more weighted towards one, like one way, like the primary care providers have no reason to sign on if there's no specialists. So, but the specialists can sign on, even if there are no primary care providers. Right.[00:19:16] Angela: Correct, but what would be the value for them if there's no primary care providers[00:19:20] Jonathan: No, I, yeah, I get that, but, but there's also no risk.[00:19:25] Angela: Correct? The idea is to get all the specialists and all the primary care providers from our area on. And if we can do that, we can accomplish a couple of different things we can accomplish. Um, I mean, I think eyebrows would be raised in other areas to go, Whoa, what, what are they doing in Kamloops?[00:19:43] They have all the referrals going through one portal. It's all tracked. It's all secure. What an amazing, um, system that they have happening there. Um, what it also starts to do is you start allowing your specialists and your primary care providers to accurately track the referral management and numbers.[00:20:07] So we actually start to see, um, an really interesting thing happening with specialists. They're able to look at it and as a group go, Oh my gosh, the demand for our service is here and it's even broken down by these categories. And what that arms them with is really interesting data if they ever want to sit at tables.[00:20:29]Um, you know, when they're talking about, uh, additional resources for their hospital or additional resources for their area, and, and when you have, I have a whole geographic region on one system where they can start actually pulling accurate data from that becomes really, really interesting. So that's our focus right now.[00:20:49] Our focus is to get the users on from both sides specialists and primary care provider from our area on and, and really, um, you know, that's why we call Kamloops our beta community is because we've, we do truly want, um, that, and I think it would be powerful.[00:21:06] Jonathan: Do you think that there's a feature that we could build that would entice the specialists? Even if there wasn't, there wasn't a primary care providers and possibly never going to be primary care providers[00:21:22]Angela: I've never thought about a system that didn't have both.[00:21:25] Jonathan: Well, I like the, what you just described, you know, being able to analyze some of that demand data. Um, and that's, I mean, that's kind of what you started doing in the way back in the beginning was looking at the demand[00:21:38] Angela: we still, we still do like the consulting arm of central referral solutions. We'll actually do deep dives into your offices and EMR, and actually pull out that demand data. It's hard, it's expensive and it's labor intensive. Um, Clinnect is a product that was introduced that would help you do that a whole lot easier and a whole lot cheaper.[00:22:04] Jonathan: Right, but it, but it relies on the data coming through from primary care providers. Could, could we build, is there something small that we could build that, that lets the specialists sort of retroactively start, like putting in some of this data, like, like it's not hard for them. Well, maybe, maybe it is, but, you know, could they take, could they take the referrals that they've had in the last month or quarter or whatever, and then just like, okay, I'm going to, I'm going to put these in and just see, you know, see where our demand is.[00:22:35] If that's, if that's valuable, then can we just, you know, type in all the referrals that came in and start to see some of that demand to data. And so use it as a bit of an, uh, a bit of an analytics tool, um, without, without actually getting any of the referrals coming through.[00:22:50] Angela: so Jackie has kind of built that. she has built programs that do the analytics around. So what it involves is, is us going into each individual office. And there's a reason for that to like, to actually physically go in their space is to understand how do they receive referrals?[00:23:09] Like as soon as you get a referral, is it put into your EMR right away? Is it not. Yeah. Like how do you manage those? And, um, with that tailored and customized approach, then you get true demand data. We've gone the, I like the extra hundred steps to actually analyzing wait time data along with that. So it's not just referral and demand data.[00:23:35] It's wait time data. But this is when we also get back into what we've talked about in a previous episode around categories. There's no categorization right now.[00:23:45] Jonathan: right.[00:23:45] Angela: Remember these, all these, all these referrals come in with no standard categories. So we do that in on top of, so like the, the, the consulting that we do is highly tailored and highly customized.[00:23:59] Um, it comes at a price, but it is very much worth it. judging from the results that we've we've had with giving that data back to the users themselves. So we're armed, we're literally just arming them with their own data. Jackie has built that, that tool. I'm not sure that it would be valuable in a, in a, like a smaller tool or a paired down tool.[00:24:27] Jonathan: Right.[00:24:28] Angela: I'm not sure how that would even look. And like I say, there's so many, so many things that we've learned through this, and this is why Clinnect came out of that. Mmm.[00:24:39] Starting this fall, we're going to do a big marketing push. Um, we, because we are focusing on the geographic area, we are literally going to go door knocking. Um, we're we have an intern that we've hired. Um, her whole job is, is to like, just go door knocking, have people understand what Clinnect is, why they want to sign up and then just literally help them sign up.[00:25:02] Just walk them through the process, which isn't a hard process, but it's, it's um, I think at first to get those numbers, so we talk about chicken and egg. We need one of those. We need the, we need one of those to tip. And I think to get us to the tipping point, we need to do a very tailored marketing approach where we go door to door[00:25:28] Jonathan: When you say one of those, you mean that like the primary care providers[00:25:31] Angela: or the specialist we[00:25:32] Jonathan: I th but I think it's, I think it's gotta be the specialist. Like what, like, there's no reason for, uh, like there's no use to it. As a primary care, but there's no use to anyone if neither one neither side is on that, but there's less use for the primary care provider to sign up because they can't, they can't do anything.[00:25:50] Angela: Correct. That being said, we already have one specialty on, so they are there and we do have two more specialties. Queued. If anybody knows anything about healthcare is that July and August are like classically slow down[00:26:08] times.[00:26:09] Jonathan: for everything like everyone's on vacation. No, one's responding to emails.[00:26:14] Angela: So then we're battling that right now, too. So yeah, I think that's why that's keeping me up at night right now. Password resets and user numbers.[00:26:26] Jonathan: Nah.[00:26:27] Angela: Yeah.Outro[00:26:30] Thanks for listening to Fixing Faxes, building a digital health startup. I'm Angela Hapke. My cohost is Jonathan Bowers music by Andrew Codeman. Follow us on Twitter @fixingfaxes. You can find us wherever you like to listen to podcasts. And please do us a favor and tell a friend. Thanks for listening.[00:26:47] Jonathan: It's it's almost as if you haven't, uh, been gone for three weeks, not practicing this.

Show NotesWe've deliberately chosen to design privacy into Clinnect. This means using cryptography to ensure that only the intended recipient is able to view patient data. In fact, as builders of the software, we can't even see the patient data.For the curious, Chris suggests these articles to better understand cryptography: Crypto101 is a great book for learning cryptography basics. It's very long but thorough and free: https://www.crypto101.io/ The API we use to do this securely in the browser is the WebCrypto API: https://developer.mozilla.org/en-US/docs/Web/API/Web_Crypto_API Two of the models we based our cryptography on were the Firefox sync model and the Lastpass model. Breakdown on those here: https://hacks.mozilla.org/2018/11/firefox-sync-privacy/ & https://enterprise.lastpass.com/wp-content/uploads/LastPass-Technical-Whitepaper-3.pdf We highly recommend using a password manager like Last Pass to keep yourself safer on the internet. Many are free, including Last Pass.Fact CheckThe LifeLabs hack was one of the largest data breaches in Canadian history. An estimated 15 million Canadians were affected.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comChris Foster - @chrisfosterelli - https://fosterelli.co/CreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)TranscriptJonathan:  Check this out, Chris. So we've got these new pop filters. This is it. Without the pop filter, Peter Piper picked a Peck of pickled peppers.[00:00:09] And with the pop filter, Peter Piper picked a Peck of pickled peppers[00:00:15] Chris: So much better.[00:00:16] Angela: Isn't[00:00:17] Jonathan: then better.[00:00:17] Chris: I feel a little bit like the black sheep, because I am I'm that person who joins the podcasts and does not have a high quality bike. And I know as a listener, whenever I hear that, I'm like, Ugggg![00:00:30] Angela: Do you? Because I'm more like, Oh, thank God. Not everybody has everything in their house.[00:00:38] Chris: I usually just skip podcasts that, that are guests like me.[00:00:45]Introduction[00:00:45][00:00:45] Jonathan:  Hi, I'm Jonathan Bowers[00:00:49]Angela: and I'm Angela Hapke. And I went camping for the first time with my family. Last weekend, we bought a[00:00:57] new tent trailer[00:00:58] Jonathan: the first time ever.[00:01:00] Angela: with all four of us. Yup.[00:01:02] Jonathan: Oh, wow.[00:01:03] Angela: Yeah.[00:01:04] Jonathan: anyone get any sleep?[00:01:05]Angela: So we bought it a popup trailer and Brad and Alex were on one side and Nora and I were on the other side. One half of the trailer got sleep. It was not my side.[00:01:19] Oh, I promptly when I got home ordered memory foam, like two inch memory foam toppers for the mattresses, because both Nora and I were like, Oh, heck no, we're not doing that.[00:01:34] we joke that our children are like drunk octopuses, trying to search for their keys when they're sleeping at night. Like that's a bit how Nora is. So yeah, it was a lot of like toe kicks to the kidneys and moving around and yeah, it was tough.[00:01:51] Today we have a guest, uh, the chief technology officer at Two Story Robot. Can you introduce yourself?[00:01:58]Chris: Hi, my name is Chris Foster. I'm like you said, the chief technology officer at Two Story Robot. I have been building web applications for about a decade now. Um, and before that I was into computer security, pretty heavily. I have a degree in computer science with a specialization in software engineering, as well as a graduate degree in computational neuroscience and artificial intelligence.[00:02:29] Angela: Oh my goodness. A lot of those words didn't make sense to me, but that's[00:02:36] okay.[00:02:36] Jonathan: you said, computational neuroscience, that's an obscure term that. So what, what does that mean?[00:02:41] Chris: yeah. We use machine learning models to better understand how language is processed in the human brain.[00:02:47]Jonathan: How did you do that?[00:02:48]Chris: We put some people in a very uncomfortable machine. It's called a EEG machine. So. They put a whole bunch of goop in your hair and sensors. And then we make you sit in a dark room or of what feels like a very long time staring at symbols on a screen, as you learn to map those to English words. Uh, we tried to replicate sort of replicate an experiment that was done with a much, much more expensive machine.[00:03:12] And then we showed that you don't necessarily need the $1.5 Million machine and said, you can do it. Uh, with something that's more in the range of $60,000. We did it while trying to learn kind of a language that we made up, which was something that was new too.[00:03:25]Jonathan: That's cool.[00:03:25] Angela: That is cool.[00:03:27] Chris: it was a fun project, but yeah, I definitely nothing like graduate studies to also make you feel like you have no idea about computational neuroscience, more questions than answers at the end of it, it often feels like.[00:03:39]Jonathan: You've expanded your knowledge a bit, but you've also expanded that surface area of things, you know, that you have no idea about. Um, which I like, I like that feeling. I like knowing that there's all this world of things that I don't know, uh, it feels like a better place than not knowing that that stuff exists.[00:03:55]Um, It's it's something that I talk. So I talk about this with the team every now and again. And I like my goal for our team is not to not to expand the circle of knowledge of things they know. It's to expand the circle of knowledge of things they know they don't know because that stuff you can go and learn.[00:04:18]you don't need to know all that, all that stuff. You need to know that it exists and that you can go and find it.[00:04:23] Angela: I think you're right. And I think that's probably a good segue into what we're talking about today. Ah,[00:04:29] Chris: It is because computer science follows a very similar learning curve. I think.[00:04:33]Angela: As the CEO of a digital health company. I know we're about to find out about how much I know about the topic of encryption and how it is more about knowing what you don't know and either finding the right people, uh, to do it or to understand what you don't have an idea of what you don't know.[00:04:58]What is Encryption as a High Level?[00:04:58] Jonathan: Yeah. And so, yeah, that's the topic of today is, well, we wanted to talk about encryption, um, because clinic is, um, what's called end to end encrypted. Which practically means that only the person who sent a referral and the person who receives a referral can read or see any of that data.[00:05:20] No one else can see that including, including us as the builders of this software. Chris, how would you characterize that encryption is discussed in terms of products and things that exist now?[00:05:30]Chris:  encryption comes up all the time. And maybe from, from a layman's perspective, it can often seem like encryption is encryption, which I guess it's technically true, but how you're using that encryption really matters for how private your data is. Um, and it kind of fits into three broad categories.[00:05:52] Uh, the first type of category is the most popular of encryption. The, when that, um, whether knowing it or not, you use this all the time in your day to day life, which is communication encryption. So this isn't encrypting data between two end points that are talking to each other. So a good example of this is when you open up the Facebook application and Facebook goes and fetches your profile data, or your timeline data from facebook.com.[00:06:17] It's doing that in an encrypted way. So your internet service provider, for example, can't read that data, but Facebook can. So although there's encryption in place, there, it's not the same as other types of encryption that might protect your data from everyone, even including Facebook.[00:06:32]The second type is encryption at rest. So this is maybe if you have a file on your computer and you've decided to encrypt that file and you've used a password to do that. Or if you're using something like Mac's operating system's encryption feature. No one can actually open up your Mac and read all the data on it without your password. So if you're using that feature, then that's kind of encryption at rest while your Mac is actually unlocked, someone could certainly come over to your computer and access all the data.[00:07:00] But if you had your computer turned off and someone stole it and ran away, they wouldn't be able to read any of the data off the hard drive. So that's another way that is Christian has often used. And then the third way, which is. Probably the most privacy preserving, but is less common is end to end encryption.[00:07:19] An end to end encryption is similar to what, and you're using a tool like Facebook, but it's even if Facebook, as the person passing the data around, even if they couldn't read it. So for example, when you use Facebook messenger and I send a message to someone else on Facebook messenger, That person is receiving it.[00:07:38] And both of us are encrypted when we talk to Facebook, but Facebook in theory could read those messages. Um, Facebook does actually have an end to end encryption model. And if you were to turn that on, what it's then doing is the encryption is directly between me and whoever I'm messaging. So if I'm messaging Jonathan, that would mean that even Facebook can't read those messages because the encryption is directly between us and it's a little bit harder to set up and certainly more complicated and it makes building an application.[00:08:05] Have a lot of interesting limitations and technical challenges and all sorts of feature problems that can come up when you, as the company, can't read the data, but that's what we've tried to do with Clinnect to protect patient privacy. Um, just because it's so important, right? So that's what we've done here is when someone sends a referral to someone else, us a Two Story Robot or Clinnect, we can't actually see that data. It's directly encrypted between the members of the sending medical practice and the members of the receiving medical practice[00:08:35] like to be secure, like even, even like the baseline requirement is that the internet service providers should not be able to read your data. That is like the bare minimum for building a web application today.[00:08:45] But being end to end encrypted is definitely being a lot more forward thinking.[00:08:49]Jonathan: I have some questions. I don't think they're relevant.[00:08:51] Chris: I love irrelevant questions.[00:08:53]Jonathan: I was thinking like, are there, are there still cases of, of applications or services that aren't even hitting that baseline requirement[00:09:07] Chris: I mean, they're not, they're not right. Like the, the phone line provider could in theory, uh, re read your data. Um, I mean, there's, there's some advantages in some ways in that the phone line provider, isn't, isn't storing that fax but ultimately you have to trust them when they say they're not doing that.[00:09:23]Jonathan: one of the things about encryption is that it does it, it adds that layer of trust, or maybe, maybe the right word is you don't have to trust, right? Like a fax machine. You have to trust that the carrier, that telephone company is acting in a way that is not, um, privacy invading.[00:09:41] encrypting that communication. So it doesn't matter. Like we don't have to trust, like the fax operation could be run by bad person company.[00:09:50] Um, and they, they, you know, they can record all they want. It doesn't matter because they, they wouldn't be able to read it.[00:09:56] Angela: exactly, that's it? Yeah. And I think too, um, what we're also forgetting around the fax machine privacy issue is that. You could send it to the wrong fax number because there's no verification on the other end that they are who they are.[00:10:16] Right. So it could end up on any fax machine.[00:10:19] Chris: Yeah, I think that that's also has an interesting corollary to, to building a web application cause the internet works a fair bit different than the phone network and it say we had built this without that end to end encryption. There's lots of interesting problems that can happen. Um, now again, I've said that kinda like encryption to the server is the bare minimum, but it also becomes like even more important when you start talking about the internet, because with the phone line connection, if I was to call you Angela, it's probably pretty likely that like how that call is going to get routed is controlled by the phone network.[00:10:56] And it's pretty likely going to go to you where the internet doesn't quite work that way. Um, the way the internet works is through the system called BGP. Basically an ISP or an internet service provider or someone who's a big player on the internet. We'll sort of just say, Hey, I'm handling the traffic for all of these addresses.[00:11:14] And it's very brittle. There's actually been mistakes in the past where, uh, say something, I don't remember the exact countries, but, um, say someone, an internet service provider in Brazil has said, I own all of the google.com IPS. And then everyone starts sending all of their traffic to Brazil, even if maybe they were already right beside, at Google data center.[00:11:35] So it's also difficult to ensure how our traffic is even routed through the internet, which is why, like, of course there's people monitoring this and if you behave, you're, you're a bad player they're going to boot you out. But ultimately it's important to have that even that baseline encryption and end to encryption on top of that is even more helpful.[00:11:54] Um, Just because the internet works so much differently.[00:11:57]Jonathan:  we've deliberately chosen to build Clinnect in an end to end encrypted way, which is kind of the, the most encrypted, the most encrypted way we could, we could build it or is there another, like, is there an even more encrypted way that we could build this?[00:12:13]Chris: I think everything is going to be a compromise. There's probably some things we could do that would have been more encrypted, but anything you do is going to come with a little bit of a sacrifice to user usability, right? So one, one thing we've done is when you send a referral, anyone at the receiving practice can access it.[00:12:34] That is the doctor or their MOAs as well. We could have made it more encrypted by sending it specifically to the doctor,[00:12:43] um, and never allowing you have to be sent to anyone else in the future ever again, and encoding it directly for the doctor's keys. If we had done that, that would arguably be more more encrypted because you're reducing the number of people with access to the unencrypted version of that file.[00:13:01] But that would obviously come with very large considerations for the user experience. So I think ultimately with these things, it's going to be a trade off between the level of thoroughness in your encryption architecture and the user experience. And I feel like for something as important as patient data, we still have to make some product compromises, but we're right on the balance and the sweet spot where it's an effective and a usable product, and also highly secure compared to alternate approaches.[00:13:31]An Analogy to Boxes and Locks[00:13:31]Jonathan: when thinking about it from the user's perspective, like we always have to. We have to explain this to them sometimes and help, help guide them to why this is better, why this does protect them, them like as, as, um, practitioners and patient data. Uh, and so we've, tried to come up with analogies to explain this.[00:13:55] So. Um, in explaining this in the past. So Chris kind of explained what we did in a very technical diagram. I tried to bake that into a different analogy and then Angela took that and also tried to explain that to some potential customers. So I'm curious to hear that replayed back to us.[00:14:14] Angela: Oh, my, okay. So what I tell people and let's go back to the primary care provider is putting together a package. This package is a referral. So this referral package contains like every thing about this person. So highly sensitive patient data. What I say is that when you take this package it gets put into a box that is locked. But depending on how many people can open it on the[00:14:52]Editors Note[00:14:52] Jonathan: Okay, Jonathan here. Uh, I'm editing this and listening to Angela and myself, trying to explain encryption through an analogy and we go on and on and on about boxes and locks and putting boxes inside of boxes with locks inside of locks and boxes and boxes and locks and boxes and locks. And it's very confusing.[00:15:13] Um, very hard to listen to it. So I'm going to save you all the trouble and we're just going to skip all that part and just suffice to say, we butchered an analogy for trying to explain encryption. It was terrible.[00:15:27]Back to the program[00:15:27] the receiving team gave us. And so that lock gets put on that box and that whole box gets put in another box with the key, uh, uh, damn.[00:15:39] Chris: built this and I'm not, I'm not following.[00:15:41]It's a good analogy. And you're, you're not. Wrong per se, but it's a struggle to use an analogy to explain the system because anytime you try and be even remotely, correct, the analogy starts to break down to the point that you might as well just teach someone cryptography.[00:16:03] Angela: don't[00:16:03] Jonathan: Okay. How does it work, Chris? What's this[00:16:08] Angela: And you really don't need to use.[00:16:10] Chris: Can I abandon the[00:16:12] Angela: Yes, please. Please do this, the analogy. So this all started from me saying to Jonathan, like the cryptography that we've built into Clinnect is sits in the background. As a user, you have no idea actually how secure it is, but it's privacy by design.[00:16:32] This is what we've done with Clinnect. And, um, but I wanted to showcase that I wanted a really easy analogy. Apparently there isn't one a really easy and okay. Okay. Well then, then go ahead. Yeah. I wanted to share with users, so they were like, Oh yeah. Cool.[00:16:50] Chris: There is an easy analogy. I think that the thing is, is you have to trade off being correct. Um, both of you, I think, are trying to be like, actually correct in the explanation, in which case you might as well just talk about the cryptography. I think if you don't mind quite a bit of oversimplification an analogy is actually not too bad.[00:17:11]Jonathan: So what's the oversimplified version of[00:17:14] Angela: Yes, please do.[00:17:15] Chris: The oversimplified version is I would say, imagine a lock that has two keys and one key can lock the lock and the other key can unlock the lock. Each key only turns one way, so you can only lock or unlock it. So the key that unlocks it is your secret key. It's the one that you just want to hold on. You don't want to give that to anyone else, but the one that locks it, that's fine because all it does is lock it. You can make as many copies of that, of, of that as you want and send that to as many people as you want. So when you send a referral. What you're doing is you're asking the Clinnect server, you're saying, Hey, can I have the public key and Clinnect server saying yep. Here you go. Here's what copy of that? And you use that to put all the referral data in this box and do you lock it, but you can't unlock it and neither can we, and then you give the box to us. And then when the receiving specialist logs in. We give them the box and they have the key that can unlock, which is derived from their password.[00:18:20] And we don't know their password. So we don't know the secret key. But they have that secret key and they can use that to unlock the box. That's the core. Now of course, the parts where that's over simplifying is there's actually multiple people that can unlock this box. Everyone at the receiving specialist can unlock it.[00:18:39] So that includes their MOAs, um, and that's, that's where things start to become complicated because what we actually do is we give keys to each user and then keys that represent the practice. And then we take the practices secret key. And we use each user's public key to then encrypt it for them so that they have their own kind of double wrapped copy of the practices key.[00:19:02] But now you can see that now it's starting to get complicated and you can see where it breaks down. So you don't that you, that's why you have to trade off the accuracy. We could talk about asymmetric versus symmetric encryption. And, and if you could explain it, um, it's actually not too hard, but maybe maybe a bit longer than, than 30 minutes.[00:19:20] Um, But it's honestly not quite that daunting, but I think, yeah, if you, if you want something for, for a nontechnical audience that is okay with a little bit of inaccuracy and simplification, then I like that analogy for it.[00:19:34] Angela: Okay, Chris, so people are going to be listening and then there, you're going to peak their interest. They're going to go. Huh, but this guy's talking about is really interesting. And maybe I do want to know a little bit more, where would you point someone who let's say is like me knows very little about this, but is really interested in learning a little bit more about it.[00:19:55] Chris: Google is a great resource. I think part of the, where the analogy breaks[00:20:00] Jonathan: it.[00:20:00] Angela: Just freaking Google it. God, I want to do something better that we, where we can like link in the show notes or[00:20:07] Chris: Oh, I can link in the show notes, but if you ask me offhand, I mean, I learned most of this a decade ago, so it's a little bit challenging to put yourself in the beginner's shoes, but I could find some resources. Um, yeah, I think part of it is that the analogy, the analogy, it skips the actual names of these things, right.[00:20:26] Which is asymmetric cryptography[00:20:29]Jonathan:  it's it's hard to explain without explaining cryptography, how hard is it to implement? How hard is it to build this stuff?[00:20:38] Chris: It's simultaneously easier than you would expect and harder than it should be.[00:20:44] Angela: If that wasn't the classic Chris Foster answer, I don't know.[00:20:49] Jonathan: I'm going to sit firmly on the fence.[00:20:52] Chris: There's some parts, like the core concept of it feels quite simple when we approached it and we first started talking about the end to end encryption thought through some of the ideas and I thought, yeah, this, this feels pretty approachable. Um, but the devil's in the details with this thing, I think for sure.[00:21:07]it's easy in the sense that we've leaned on a lot of existing models. With cryptography the less you can do that looks like something new, the better. So the one rule of cryptography is kind of that you should never implement your own cryptography.[00:21:21]So we based this on a whole bunch of similar models, like the Firefox Sync architecture, as well as, um, Last Pass' security model. Basically anything we could find in existing systems that were established and have been around for years and had lots of people looking at them and were built by teams of experts.[00:21:38] We wanted to try and copy as much as we could from those architectures. Some of the complicated bits have been that, doing this in the browser was a little bit tricky. Some of the APIs are pretty new. We've been using what's called the web crypto APIs, um, which have just reached a stage where they are appropriate to be used, but they definitely differ quite a bit between each browser.[00:22:00] And it's pretty hard to get them to work for some things that you need in some situations. So, when we write out the whole plan feels very approachable, sensible. We're basically doing what everyone else has been doing. But then actually implementing it comes with lots of little gotchas that we had to work through. So. So I would say, yeah, I think like there's no other way to put it other than to say it is easy and hard.[00:22:24] Jonathan: I like that answer. I like that answer. what are some other reasons why we wanted to build end to end encryption into this product?[00:22:32]Angela: maybe I'll take you back to like when we were first talking about doing all of this, and I remember, I actually remember the day that I kind of dropped the bomb on you, Jonathan, where I said, I don't think I want Clinnect to see like anybody that works in Clinnect to see any of these actual referrals.[00:22:48] And I remember you kind of going. Oh, okay. That changes things, you know? There was a couple of different business reasons behind this. It seemed like the most appropriate way to handle patient data.[00:23:03] We don't need to see what's in those referrals. We don't want to see what's in those referrals. That is a hundred percent patient data that we should not be entitled to. Clinnect is a really small company right now.[00:23:16] I mean, there's only a few of us that work there. Uh, I trust everybody that works there. I think they're amazing. Um, what if Clinnect was to balloon into a team of hundred hundreds of people and I all of a sudden had an application where you could go in and see anybody's personal health data. That's not okay in my opinion at all.[00:23:41] It would've felt weird to add that in after the fact too. And I think a lot of the discussions that we had was, well, if this is the way that you want to do it, let's, let's build it right from the get, go that way, rather than trying to add that in later, which I think probably would have been a nightmare.[00:23:54] Chris: Borderline impossible.[00:23:56] Angela: Or borderline impossible. There you go. So glad we made that decision[00:24:02] We're a startup, we're a young company. We do not know where this company is going. We know who owns it right now, but what does it look like in 10 years? And would that have changed the direction that we went to?[00:24:15] If we had access to that data and to be honest from a social enterprise perspective, it is not the world that I want to get into with having access to personal health data and managing the risk around that.[00:24:31]Jonathan:  We own it now. And what you're saying is that there's the potential that the Clinnect gets acquired and that acquirer could do something else with the data, even though our intention was, if we had an end to end encrypted it, like our intention was yet, we're not going to do anything nefarious with this data.[00:24:48] Um, but now we've protected against that from happening in the[00:24:51] Angela: in the future and I mean, that's not a protection for me or Clinnect. That's a protection for every user and every person that has their data going through us. It was a decision that I didn't make lightly that's for sure. But it also was something that it wasn't a hard decision to make either as soon as we kind of ran through a couple scenarios and I was like, Whoa, why, why are we even considering not doing this?[00:25:16] Chris: And also even as like technical lead, like I like that, like that feels a little bit of weight off my shoulders. Um, then knowing that, that we are creating this repository that is going to be such a massive target of personal data. Now I absolutely think, especially as we continue to grow, we should treat it as if it is personal data, put all of those safeguards in place, and operational policies and treat our security with the importance that we would as if we were holding patient data.[00:25:47] But it sure makes me feel a whole lot better knowing that, that we,[00:25:52] Angela: exactly. Yep.[00:25:53] Jonathan: And ultimately, like, what is the, what is the risk here? Like what is our exposure to, to somebody doing something bad? What's the worst that can be done?[00:26:03]Chris:  if we're talking about absolute worst case scenario, is that someone could. Compromise our servers, or if there was a very malicious acquisition and replace the version of the application that comes out with one that has bad code in it, and it could wait for the user to enter their password and then start decrypting data and then push it somewhere else.[00:26:23] Un-encrypted that's a potential risk. It's. There's practical limits on that. So for example, you would only be able to compromise individual users and the rate at which you could extract data would be much slower than if you just had a giant database of say hundreds of gigs of private data. That's, that's just a database you can download that has all the private data where this must be a targeted attack against individual users.[00:26:46] Right. You have to set up a server to receive that data. And then you have to also store all of that data . So, so that is in theory, something that could happen, which is sometimes why end to end web applications kind of get some criticism, but is it a whole lot better than if we didn't have that stuff encrypted?[00:27:02] Absolutely. so I would say that there's still, there's maybe targeted attacks that could in theory be at risk, but. Again, that's why our responsibility should be to still treat the security of the application as if it was personal data. And I would say that certainly from a, hacker's perspective, I wouldn't say that that that's a, that's a small feat to pull off that sort of attack.[00:27:23] Um, it's definitely far more complex than, than some of the other than say, just like getting access to a database and downloading all of the data. Um, it's definitely quite a bit more complex, but.[00:27:35]Angela: when you talk about a targeted attack on Clinnect, it would be relatively unfruitful. Cause it would take a long time, whereas there's a lot of other low hanging fruit targets. And so even that alone, right. Is decreasing risk there too.[00:27:51] Jonathan: Yeah, we make, we make ourselves look less attractive than another[00:27:56] than another potential target. Like, I mean, and, and that, that has happened already in, in our world. Like the, the life LifeLabs was hacked and breached, and I don't know how many, how many patient records were exposed, but.[00:28:11] Angela: I can't remember. We can take a look and we'll put it in the show notes, um, link an article to it, but it was, it was a significant amount. I mean, I was one of the people that received, uh, a notification that. That my stuff had, had potentially been[00:28:31]Chris:  ultimately nothing is a silver bullet, right? Um, I think also one of the other things is that cryptography is not a replacement for user education. Um, the users are certainly probably the more likely weak point, uh, would be someone attacking an individual user's machine or even trying to social engineer them.[00:28:49] Um, which is say, for example, calling them up and pretending to be Clinnect staff or emailing them and saying that they need their password. Um, those sorts of things that, that our user might fall for are probably the most likely risk[00:29:03] Angela: Yep. Yeah, a little PSA do not give your password over the phone to anybody[00:29:12] Jonathan: Ever ever[00:29:13] Angela: ever don't do it. People[00:29:17]Recommendations for building an End-to-End encrypted app[00:29:17]Jonathan:  if someone wanted to build an end to end encrypted app, do you have any recommendations?[00:29:23]Chris: like we said, the core of it is pretty easy, but the hard bits are the hard bits. I think something that we already touched on, which is of course the first rule of cryptography is that make sure you, you feel confident in what you're doing and familiar and like, make sure you have some sort of expertise in these systems and don't ever create your own cryptography. Um, yeah, you want to, you want to always lean on, on what experts have done. So, so yeah, I would always say that like, if you are working with sensitive data and your goal is to build an end to end encrypted app and make sure that that you're not doing anything new.[00:30:03] Angela: I like that. I actually feel like you're demystifying. Um, the work that you're doing a little bit with the average, like. General population listening is I think we commonly think that you build everything from scratch, but that's not the case. And as you mentioned it's, and in this case, it shouldn't be the case.[00:30:25] Chris: Yeah. Yeah. There's absolutely some, some small adaptions. Like I said, that we've, we've kind of made like the Firefox Sync architecture or Last Pass are different products ultimately than Clinnect. So there's, there's some small adaptions, but ultimately, the architecture is basically really heavily leaning on what people have already done and then the encryption themselves, or the encryption itself, the act of actually encrypting the data.[00:30:47] Um, we wrote none of that code. That's all handled by the browsers through the web crypto API. So yeah, we, um, it's, it's not quite as simple, but in essence we say like, Hey encrypt this, and that's, that's the extent of what we've implemented for encryption. So the browsers handle all of that portion. Um, and if we had say implemented that ourselves, it just, it opens up so many doors for something potentially going wrong.[00:31:11] So, um, in some respect, it is, it is better to take the easier route.[00:31:17]Jonathan: A two story robot. We take the easy path.[00:31:23] Angela: It's all hard and simple at the same time.[00:31:27] Chris: and it's not the easy route in some respect, too, right? Like the easy route would be no end to end encryption that's easiest.[00:31:32] Angela: that's actually a really good point, Chris is that we could have done this , without any of this and law doesn't require us to do what we are doing. We are taking the extra, additional step and protecting patients and users. Been an interesting journey for me because I originally just thought, well, I just don't want to see any of it. And if we could build it like that, that would be great. And I[00:31:58] had no[00:31:59] Jonathan: an off the cuff[00:32:01] you just[00:32:02] Angela: off the cuff,[00:32:03] but it was a thought out decision, but it certainly wasn't thought out to the point of what does this mean from a development perspective at all?[00:32:13] I didn't know what I was getting our team into. So[00:32:15] Chris: Yeah, absolutely. That's and that's a fair point. The, uh, the non-encrypted end to end version of this application is a much smaller application. That is, would it have been much faster to put together? Um, but I mean, yeah, we, we also, we don't know of any other provider doing something like this for medical referrals.[00:32:34] So it's it's because patient privacy is so important that, that we wanted to ensure we took the time to think about the system and make sure we got it right. So.[00:32:42][00:32:42]Jonathan:  taking the time to get things right. Uh, Chris, where can people find you and follow you? If they're interested in.[00:32:49] Chris: Um, I have a Twitter account and a blog with a mailing list. If you're interested in more technical details on stuff like cryptography or artificial intelligence, um, if you Google chrisfosterelli, it comes up with all of my profiles. Don't Google, just Chris Foster. I'm not the most popular Chris Foster, but.[00:33:07]Jonathan: how many more years until you're the most popular?[00:33:10] Chris: Oh, is that a goal? Do I have to commit to that?[00:33:13] Angela: Yeah, Yeah, you do.[00:33:14] Chris: Yeah. Decade 10 years.[00:33:17] OutroAngela: Thanks for listening to Fixing Faxes, building a digital health startup. I'm Angela Hapke and my cohost is Jonathan Bowers. Our guest today was Chris Foster. Our music is by Andrew Codeman. Follow us on Twitter @FixingFaxes. You can find us wherever you like to listen to podcasts. And please do us a favor and tell a friend. Thanks for listening.[00:33:41]Jonathan: I wonder, I wonder if the memory foam topper is like the pop filter[00:33:46] of camping.[00:33:47]Angela: Maybe takes that edge off[00:33:49]Chris: My camping tent barely has enough room to sit up. So I feel like I am the laptop mic of camping.

Show NotesAt the beginning of the episode Jonathan talks about watching Hamilton, which was recently released on Disney+. Here is a link to the streaming service and the filmed version of the original broadway.This episode delves into the design sprint that Two Story Robot led Clinnect through, we talk about the ups and downs and how valuable it was. Check out the blog post about design sprints and the design sprint we did with Clinnect.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)TranscriptJonathan:  Can you do this? I can't do it just a second. I can get it.[00:00:04] Angela: sounded like a drip.[00:00:09]Jonathan: Yeah. It's, I'm not very, I'm not very good at.[00:00:12]Intro[00:00:12] Hi, I'm Jonathan Bowers.[00:00:17] Angela: And I'm Angela Hapke and you're listening to Fixing Faxes.[00:00:21]Jonathan: And I watched Hamilton this[00:00:24] Angela: was it?[00:00:26] Jonathan: so good.[00:00:27] Angela: watched it yet.[00:00:28] Jonathan: so good. It's it's so we've read a little bit about shaming for people who don't like it. Um, which I think is a little unfair. I mean, I enjoyed it a lot cause I like, I liked the style of music and it's really neat to see that in a musical also, we would never go see Hamilton.[00:00:49] Like, there's just no opportunity for us to go to Chicago or New York or London,[00:00:53] Angela: And especially right now.[00:00:55] Jonathan: Yeah. So it was really cool to watch. We had to watch it over two nights. Um, just cause it's, it's quite long, it's like two hours and 40 minutes. Um, but I didn't know. I didn't know that it was pretty much all rap and R and B and um, yeah, like it was really,[00:01:09] it was really cool.[00:01:10] Angela: well, I didn't know that either Brad will love it. I'm[00:01:14] Jonathan: It's so great. It's I really enjoyed it. It's very fast. It's hard to follow in ways because it's one it's like, it's just very quick. So you gotta, like, you have to be paying attention and it's a lot of American history, which I'm not, I don't, I don't know. I don't have any of the background knowledge for anyways[00:01:32] um, but it was still, it was, it was really cool. I really, I really enjoyed it.[00:01:35] Angela: Okay. I'm definitely going to check it out.[00:01:37]Jonathan:  one of the YouTube videos I watched said that if, if it was paced the same as a, a regular Broadway musical, it would have taken six hours because of how many words they cram into two hours and 40 minutes.[00:01:51] Yeah. It's very[00:01:53] Angela: Wow.[00:01:54] That's very cool.[00:01:55]We Launched The Podcast[00:01:55] Jonathan: We launched the podcast too, that has come out. Um, I've listened to it. I've listened to it a bunch of times. Cause I edited it edited. I listened to it a bunch of times because I edited it and then I listened to it when it came out and I've since listened to episode five, which we recorded last week with our new mics.[00:02:16] And I hate, I hate the first four episodes. I don't like that. Uh, I don't like the way they[00:02:22] Angela: of course not. Well, of course not,[00:02:23] Jonathan: but we have four, I think four five star reviews. Yeah. There's well, one from your husband.[00:02:32] Angela: I was like beyond my husband.[00:02:34] Jonathan: Yeah, I think there's, I think there's some other ones, because if I look at the average yeah, we've got an average of four stars and then that one, one star review that they didn't leave.[00:02:45] Yeah. They didn't leave a comment, your husbands and then some other five star reviews. Um, but have you heard any, have you got any, any feedback from people.[00:02:51] Angela: Um, yeah, so I, I. Put it on my Facebook, like, just like, Hey, we're we're doing this. Wow. I, so heartwarmed by everybody. And people I haven't talked to in years, like sometimes decades that, um, have gone, like have saw the post gone and listened to it and then come back to the post to write me something.[00:03:19] Jonathan: That's[00:03:19] Angela: so lovely and[00:03:22] Jonathan: creeping on your Facebook a little bit. I was a little jealous of how many people were commenting on your, on your post about it. Cause no, one's no, one's commented on mine at all. Uh, that's fine.[00:03:34] Angela: it is like, honestly, there's a lot of my mom's friends that are going.[00:03:38] Jonathan: Oh,[00:03:41] Angela: Yay. Thank you. Friends of mum.[00:03:44] Jonathan: that's great. Everyone's everyone's dream is for their, uh, for their friend's daughter to become a podcast host. I think[00:03:52] Angela: Yeah, right.[00:03:53] Jonathan: it's just a proud, just a moment of pride. That's so great. I love it.[00:03:57] Angela: It's been really cool. And then like just the engagement factor around that has been really, really fun. Um, so it's, I mean, mostly the people that are listening, um, as of today are really just friends and family.[00:04:10] Jonathan: Yeah. It's not a lot of, not a huge audience at the[00:04:13] moment. Um,[00:04:15] Angela: so, thank you. If you're listening to this and you've made it to episode, whatever this is six[00:04:20] Jonathan: Episode six, if you're just joining us though now, because he couldn't deal with the poor audio quality. Uh, we get it.[00:04:30] Angela: I'm glad you rejoined us. Ah, yes. So we we've launched the podcast. We've got some reviews, some listens more, probably more downloads than I thought we would have.[00:04:43] Jonathan: Um,[00:04:45] Angela: Or did you, or[00:04:46] Jonathan: I was kind of hoping for a bit more. We have a, I went in this morning, we have a hundred total downloads across both the team, the teaser, and the first episode, I think there's, uh, like 30 or 40 downloads for episode two. And, um, yes, 60 or 70 downloads for the teaser. Um, but it's, it's interesting.[00:05:04] The pattern is different. The, the pattern is more stable for episode two, whereas a big spike on day one for the, for the teaser, and then it quickly, quickly dropped off. So, but it's only been out a couple of days, so we'll see. We'll see what today[00:05:18] Angela: And it's so much easier to listen to a three minute a teaser than it is to commit to a half an hour.[00:05:24]Design SprintsJonathan: uh, so we were thinking about talking today about, um, some design stuff.[00:05:29]Angela:  before we started working with you, I had no idea what the design sprint was and I think that's, uh, it's super fun thing that we did. And I think we should talk about what that was and how we did it and why maybe what it was like from your perspective, my perspective and things like that.[00:05:51]do you want to talk about what the design sprint is to get us started?[00:05:57] Jonathan: Yeah. So a design well a sprint. There's this, there's this term that comes from agile product development and agile methods in, uh, software, but also other aspects of, of building things and this idea of a sprint. And it's this like short time window, sometimes two weeks, sometimes a week, sometimes a month.[00:06:19] It sort of depends on the project where you focus on a thing. And I don't love the term sprint. I think it, I think it connotes this idea that you are like constantly running the entire time. And then in, in the agile world, you sort of divide up your, your iteration cycles into sprints And so sprint one for focus on essence sprint two, we're focused on this and I've talked with people who kind of get the wrong idea and they think like, Oh, like, why isn't everyone just sprinting the entire time? All the time and I think, well, that's not sustainable. You can't, you can't, sprint every single day.[00:06:54]even sprinters, don't train by sprinting all the time.[00:06:56] Angela: exactly. Yeah, no, you're[00:06:58] Jonathan: So, um, anyway, so it's, it's a way of dividing up time. Um, and you kind of call it a sprint, but it's meant to be really focused on. You know, one thing or if there's a goal in mind. And so a design sprint, which I do like the term sprint for a design sprint, because it is it's short.[00:07:16]Um, it's a, it's a predefined time window. We don't do it like over and over and over again. We do one of them, maybe two of them. So our, our design sprint is. Basically three mornings. So usually Monday, Tuesday, and Wednesday morning. It's very, very intense. It's very structured. We have a script that we follow and it leads us through a bunch of exercises. Um, some of which is just to like get the creative juices flowing. So we've got some sketching exercises that we do. Um, this fun thing called crazy eights, where you take a piece of paper and fold it in[00:07:53] Angela: I remember that.[00:07:54] Jonathan: Until you get eight pages and then every minute you have to draw something new on each one of those panels. Um, we don't share that stuff, but it's, uh, it's just to like get the creative juices flowing, but the goal is to, um, bring together, you know, the I'm the product expert. So yourself, um, the people that would be responsible for building, building the product, uh, like, uh, our team on Two Story Robot and it cramp them in together into this quote unquote room. Cause we don't do it in a room. We do it remotely and forces, through very short time windows, to like be creative and come up with things. And it's a really good way of getting information exchange happening, back and forth. Um, so we, we can quickly learn a lot about the domain in three days, we've become, um, we don't, we don't become like your level of understanding at it, but we get really close.[00:08:49] And then as an. And as an output to this entire process, as we collect collaboratively design, a bunch of features and screens that we think are the most priority, highest priority things to work on. Um, and then, and then at the end, we have a design that we can kind of start implementing with, which is, which is really cool.[00:09:07] Angela: From a Clinnect perspective. Um, when we started out with the design sprint, um, what we had was simply an idea. We knew the features that we wanted to add in, but we had no idea what this would, this product would look like. Um, Jackie and I had kind of sketched out some ideas cause we're super visual.[00:09:29] The both of us, um, just to kind of get on paper, what we thought we might want to see. And then we headed into this design sprint, which I knew nothing about. I w uh, I was like, okay. Yeah. And I think you sent me an email and you're like, Hey, do you want to try this? I'm like, sure. Let's, let's try this. And it was like, you know, three full mornings.[00:09:52] And, and so from what I would say is from where we were on the Monday at say eight or nine o'clock to where we got by end of day, Wednesday was mindblowing. The amount of work that we were able to push out in that sprint and get our heads around was unreal. It was super high value from our perspective.[00:10:21] So that was really, really cool.[00:10:24] Jonathan: Yeah, we've had, we've had that feedback, uh, cause we've run them a few times now and the feedback has always been yeah um, surprise at the end of how, how much, how much value came out of it and just how much understanding and how much tangible, like tangible design came out of it. I mean, it doesn't come out with fully fleshed out really high quality designs they're, they're pretty rough, but the, the, um, like they're really good bones on the skeleton, and then we can, then we can take that and start adding, adding all the flesh to it and it's um, but it's yeah, it's in three days, um, a lot gets done[00:11:01] in three days.[00:11:02] Angela: So when coming into it in February, we had like ideas and little sketches and it was cute to nice. And then by the end, I was like, Oh my gosh, we have all of this, which helped us push for the next thing too.[00:11:16] Because we were able to do that so quickly. And then we're kind of a bit on a roll that I was like, okay, like, let's get this going. So that outside of just getting the tangible designs and things like that done, it also helped just fuel the, the builds for the, the product too, which I found super valuable also.[00:11:34] Jonathan: I mean, another thing that it helps do is it, it really ruthlessly prioritizes what needs to get done because you can't, you can't, he can't address everything in three mornings. So there's a bunch of things that we really want it to do. But, um, you need to focus on the things that are most important or have maybe the most uncertainty.[00:11:52] Angela: I think, and I think the other thing I wanted to mention too, is it is. It's exhausting. Like, I was really tired after all that. Love it. I mean, I also being like the quote unquote customer in this, um, my brain was tapped a lot, like, okay, Angela, what do you think about this? Does this make sense? That, and so it was making like really, really quick decisions, which for anybody.[00:12:19] Can be really exhausting. And so I know, I remember after the three days, it was really, really tiring, um, highly valuable, but it goes back to what you said about a sprint. Shouldn't be like, you know, it's not sustainable. And it was like, mentally, it wasn't sustainable for me at all.[00:12:37] Jonathan: It's exhausting. It's exhausting. There, it's a lot of demand on you as the, as the expert. Um, because we, you have to download a bunch of information. You have to think and respond quickly to questions because you kind of facing a squad of everyone else on the, on the sprint. I think there was six of[00:12:56] Angela: Yes, there was[00:12:57] Jonathan: Um, and so everyone has questions. You say something and it triggers thoughts in other people's minds. And so they have questions now. So you've got to respond to that. So there's a lot on you. Um, there's a lot on, uh, so myself and my Maja a facilitated it it's, it's really it's. It has to be a tag team in order to facilitate the thing.[00:13:15]Um, cause there's a lot of this, a lot of stuff happening all at once. One of us is writing notes. One of us is sort of leading and facilitating the discussion and leading through some of the exercises. We, you know, it's a bit of a production too, is we've got music that we're playing and,[00:13:28]Angela: Oh my goodness. The music.[00:13:30]There was so many, there was so much commentary on the music. So Jonathan decided he was going to be the DJ. I don't know. And, uh, there was, you got so much flack for the, for the music that you were choosing.[00:13:44] I think it was mostly from Chris and I, but.[00:13:46] Jonathan: Yeah, we have some playlists that we use and I think one of them doesn't resonate very well with, uh, with everyone.[00:13:53] Angela: I was one of those people. It didn't resonate. Well,[00:13:55] Jonathan: It's it, but interestingly, so it's, that process has spurred me to, um, change, the experience I'm trying to create in all of my Zoom calls now. So having, having facilitated a few, a few design sprints, um, and getting some really good feedback about the experience, obviously I'm not going to put that much energy into , every zoom call that I'm on, but I've got a new camera now.[00:14:18] I've got a good sound. I've got to figure it out how I can, how I can quickly add music to the call. Um, so, um, I'm not a DJ by any means. No, I just like go hit, play on Spotify, but sometimes I can, I can find a song that actually reflects the meeting well, and then I play it. I play it out. I play us out and I've gotten some good feedback on that.[00:14:38]Uh, it's been fun.[00:14:40] Angela: Is that going to be like a job in the future[00:14:42] Jonathan: I think it could be a job now, I think.[00:14:45] Angela: But yeah, what I mean, I guess future being now, because we're all can, you know, meeting via virtually is that that becomes a new, a new skillset.[00:14:57] Jonathan: Yeah, at our all hands meetings, we have like a question that we ask. And it's just a fun question to just think about and discuss and just create something else to talk about. Um, One of them was what, what's a thing you'd like to learn. And mine, I decided was improv. Yeah, because I mean, I had just finished watching a, that long format improv on Netflix, uh Middleditch and Schwartz, which I highly recommend. It's really funny. I've always enjoyed improv. And so I was reflecting a little bit on what the design sprint is and sort of running, running, engaging meetings.[00:15:34] And I was like, this is it's improv. Like, how can I, how can I be, how can I, how could I improve that? I could be an improvization person, an improv comedian, or[00:15:45] like an[00:15:45] Angela: improv artist.[00:15:47] Jonathan: An improv artist. Right. I could be an improv artist. I haven't taken any efforts to like go and do that because I don't have any time, but it's something that I think about a lot.[00:15:55] And I w I really wish there was a maybe like a podcast I could listen to, to like, help me become a better at improv.[00:16:04] Angela: I love it. So anyone listening that has suggestions on how Jonathan can become an improv artist, please message us.[00:16:15] Jonathan: I think it would be a cool skill to have. It would be great for interviews on the podcast for, yeah. Anyways, I I'm, I'm excited about the idea of it. I don't know what I'm going to find time to go and do it.[00:16:26] Angela: Oh my goodness. I love that.[00:16:30] Jonathan: the other thing that I wanted to like share about the design sprint process that we have is that it, it kind of only works remotely.[00:16:38] Angela: You know what I would agree at first I was very, and this is pre COVID, so we could have met in a room and thought nothing of it. And we all. Mostly, except for Maja who was in Poland at the time, we all actually worked in the same building. So it would have been very easy to do this. And, and, um, the old school part of me that like, you know, has spent years in healthcare where meetings are, um, at first it was a bit like, Oh, No.[00:17:07] I want to, like, let's all get in a room and let's do this together. And you're like, no Angela, this is all virtual. And at first I was like a little bit disappointed, but then once we got into it, I probably didn't tell you that at the time. Um, but once we got into it, I totally got why we were doing it virtually and it made a lot of sense and it worked out really well.[00:17:34] Jonathan: Yeah, there's, there's so many things that you can do when you don't have the constraints of a physical world. Um, we use, we use some tools that allow us to very, very rapidly work on the same thing at the same time. And it gets really messy. Like we do this, um, we do this organization process where you're. You know, you're putting virtual sticky notes on a whiteboard and then somebody grabs it and moves it on you to somewhere else. And you're like, okay, whatever. And it's really fast. And so we can take seven minutes and, and categorize and organize a hundred sticky[00:18:08] notes and, and surface some meaning out of that.[00:18:11] Angela: And there was, um, there was a lot of getting used to that.[00:18:17] Jonathan: Oh, yeah. Yeah. The tool, the tool is we're used to the tool, um, others, uh, when people use it for the first time, uh, it, it, it can be a bit overwhelming and it[00:18:27] Angela: It was a bit. Yeah, but it was quick to learn. So it was overwhelming at first, but quick to learn, but I think it was more like my, my own control issues where I'm like, Nope, I put that sticky note there. Why is it moving? Somebody is moving it. And, but as soon as I kind of lost that need for understanding everything, because you can't during this design sprint, especially as a newcomer to it, as soon as I kind of lost that need to.[00:18:56] Understand and control, then it worked really well, but it was hard for me at first, but it didn't take, like, I like you adapt really quickly. I guess.[00:19:07] Jonathan: Yeah. Yeah. Yeah. It's, it's a, it's a really messy. It's a very messy process. It makes people feel uncomfortable, especially. I think, I think you sort of hinted that you were a bit of a controlling, um,[00:19:22] Angela: Oh,[00:19:22] Jonathan: freak. You're just someone who likes to have control over things. And I remember thinking, I don't think she's going to like this very much.[00:19:32] Um, but like it's, it has to work this way. Like you can't control it because it's so it's, it's quite organic. Um, and it, it needs to be[00:19:39] Angela: And I think it's that, um, you know, we're talking a lot about this these days about leaning into uncomfortableness and that's where, um, beautiful, messy, creative things come from. And that's exactly what this design sprint was at first. It was, it was, it was a bit. Um, chaotic messy, but from it, if you just allow yourself to be uncomfortable and okay with being uncomfortable in that moment, you can create some really beautiful things.[00:20:06] And, um, that's where I think we were able to get. And I was probably one of the bigger barriers at the beginning to doing that. If I'm going to be perfectly honest with myself, but it was good.[00:20:20] Yeah.[00:20:20] highly recommended design sprint. Um, like I say, didn't know what it was, went into it unknowing definitely, you know, was, was pushing back at first and then so proud of what we came up with out of it.[00:20:35] Jonathan: Would you say it was fun,[00:20:36] Angela: Yeah. some of the best things are, you know, like they just. They tire you right out, but there's, there's fun. Um, yes, it was fun.[00:20:45] Jonathan: Yeah, I really enjoy them. They're they're so exhausting, but there's so much fun.[00:20:51]Angela: Um, so our software, uh, developer, Jackie, that, uh, works at Clinnect. Um, I remember at first she had a real hard time with it because she is the kind of person that loves things to be beautiful and nice and organized. And you can see it from, you know, she's a photographer and her pictures are gorgeous. Um, you should see your notebook.[00:21:16] It's.[00:21:16] Jonathan: Our notebook is[00:21:17] Angela: It's amazing.[00:21:19] And so then when you're doing this design sprint, like, and you talked about this, like the eight square, is that, what am I calling it? The crazy eights or something? Yep. Uh, Oh, Jackie hated that. I remember. She was so frustrated because you have to draw something in a minute and then you flip it over and draw something else in a minute and you kind of keep iterating on what you had drawn last and you get, you know, and it's, it's just, as Jonathan said, an exercise to start opening up your mind.[00:21:46] Well, I remember the grumbles so funny. Yeah. But because she's also this person who thinks about things and it's very particular. I also feel like she, once we kinda zoned in on what we were, what we were looking at a little bit more, she was able to take it to like a next level, because then she was able to focus in on those details and things like that.[00:22:10] And that's why it's so great to have a super diverse team when doing it and allow everybody to go through their grumbles and bumps and. It'll come out the other side better for it. . I had actually liked to do it again with something[00:22:28] Jonathan: What we had planned on, we have plans to do another one. Um, we had discussed it.[00:22:33] Angela: Oh, right. I forgot about it.[00:22:38] Jonathan: I don't remember what about, but we had identified something that we thought needed some additional,[00:22:43] Angela: Well, it's probably our premium features. No.[00:22:47] Jonathan: and I thought there was something else.[00:22:49]We are always looking for other opportunities to do design sprints, because they are so effective. They're really hard to describe though. Like they're almost impossible to describe to someone cause we say like, Oh, it's really, it's really weird.[00:23:02] It's really uncomfortable. It's very messy. And it's, it works really well.[00:23:07] Angela: Yeah. And people like myself are like, no, thank you. But I trusted you. That's actually, maybe the, maybe the piece that we haven't talked about is that trust piece is I trusted you to guide us through that. And I think you need to find a team that you, that you ha you have to have that trust there, or else that does not work.[00:23:28] I don't know. Have you ever had a, have you ever had a client where. It's like it went a little bit sideways.[00:23:35] Oh, that's nice. You must be so trustworthy. Everybody's just like, okay, Jonathan.[00:23:41] Jonathan: it's, it's always produced very good results and, and it's always, it's always. Kind of the same experience. So maybe that's just, we've like we have really great customers, um, which, which is true, but, uh, yeah, I don't know how much of it is because it just works or that we have customers that are sort of willing to work, willing to take that chance a little bit.[00:24:02] Angela: Probably a mix of all of it. Um, what we'll likely do in the show notes is link to maybe a little bit more information about design sprints.[00:24:12] Jonathan: Yeah, so we're doing, um, we're going to do a blog post on design sprints that this can, this can relate to, . Anyway, so, so hopefully we get to do another design sprint, um, on Clinnect, on whatever, whatever feature we think[00:24:24] Angela: Oh Lord.[00:24:25] Jonathan: What else is, what else is coming up? What else is next?[00:24:28] Angela: what's coming up. Uh,[00:24:32] Jonathan: Hopefully, well, hopefully, hopefully on the next recording, we're going to have Chris come in guest and explain to us how all this encryption stuff[00:24:44] Angela: Yes. Chris is wildly smart.[00:24:49] Jonathan: I'm very excited to hear you describe it as well, because I've, I've given you a, um, a metaphor or an analogy or a way of describing it, which you took, and I think you change to give to someone else. So I'm, I'm curious to hear all of it, all of it, and then do it in front of Chris for him to shake his head at and say no, no,[00:25:11] Angela: you have it all wrong. Yeah. That is a hundred percent what is going to happen? And I'm[00:25:16] Jonathan: Yeah. So you've been listening to Fixing Faxes, building a digital health startup. I'm Jonathan Bowers. My cohost is Angela Hapke. Music by Andrew Codeman. Follow us on Twitter @fixingfaxes. You can find us wherever you listen to podcasts. And please do us a favor. Tell a friend. Thanks for listening.[00:25:33]Camping with the Family[00:25:33] Angela: I'm taking my children camping in our new trailer for the first[00:25:38] Jonathan: You[00:25:39] Angela: weekend we bought a popup trailer, like[00:25:42] a, a tent trailer.[00:25:44] Jonathan: yeah.[00:25:45] Can you fit a family of four in that?[00:25:48] Angela: yes, apparently we bought a very large one. Yeah. I didn't have a clue. We really, we didn't know what we were doing when we bought it, but we bought it and our children are so happy.[00:26:01] Um, but they're so excited to take it. So we're going to take it four on Friday night for the first time. Wish us luck.[00:26:07] Jonathan: Uh, good luck.[00:26:11]

Show NotesIn this episode we talk about different grants, contributions, tax incentives, and non-equity financing that there is available in Canada, specifically British Columbia and how it has helped our businesses. Here is a list of the grants/programs/incentives that we discuss and links to find out more information:NRC-IRAP - Industrial Research Assistance ProgramYouth employment grants through IRAP- Youth Employment, Venture for Canada, & New Ventures BC & Innovate BC.SRED (Scientific Research and Experimental Development) Tax program The company Angela mentions in the episode which specializes in SRED claims is Infinity SREDThere are many contests & competitions to apply for, if you are interested in more information we suggest starting to take a look at organizations that support the type of contest/competition you might be interested in.Incentives and contributions are great, we have used them along the way when they fit with work we were already undertaking. Just remember, it is better to focus on your product and less on distractions.Fact CheckJonathan mentions he is into a new marble league, if you are interested in checking it out it is in fact called Jelle's Marble Runs and can be found on YouTube.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)TranscriptJonathan: When you move, when you move the arm, it makes this like sound like, check this out. Like when you hear that, Oh, whoops.[00:00:10] Angela: Totally.[00:00:10] IntroductionYou are listening to Fixing Faxes, a podcast on the journey of building a digital health startup with your hosts, myself. Angela Hapke[00:00:22] Jonathan: And I'm Jonathan Bowers and we have been infatuated with Marble League.[00:00:30] Angela: I don't know what this[00:00:30]Jonathan: it is the best sports to watch while there is no sports. Although the risk sports now, I actually discovered it last year, but I didn't watch it until, COVID times.[00:00:38] Cause I didn't think Julie would enjoy it, but she really likes it. So imagine, imagine, imagine the Olympics, but if if the athletes were marbles. Yeah. So they, they like set up these, these courses and they put marbles at the top and the marbles just there's a machine that like releases them at the same time and the marbles go racing down the track.[00:01:00] Angela: Okay.[00:01:01]Jonathan:  but, but they have teams, so they have teams that are named.[00:01:04] So I'm a fan of the O'Rangers. They're the orange team. And Julie likes the Misty maniacs because they look like, or know the minty. minty maniacs. They're minty colored. Cause she likes mint and it is phenomenally exciting to watch and you get very emotionally involved in it.[00:01:22] If you pick a team it's so much fun. Yeah. And there's like there's drama[00:01:29] Angela: I'm so confused about like, given, okay. So, Oh, there's so many questions I have. Where do I start? Given the race? Like the track or the course?[00:01:44] Does a team pick a certain marble.[00:01:48] Jonathan: Yes. So some of them, some of them are, like there's some, some events that require the whole team. Like there's, um, there's a, a push event. Like it's a strength event and they all raced down and they have to push this thing along the track. And the further it goes the higher your rankings are.[00:02:03] Um, but then there's ones that are just, Like you're competing with all the other teams. And so there's just one marble and all the marbles have names. Yeah, they do. my favorite team names is team Momo and I don't understand marbles at all, but there's a team called team Momo.[00:02:16] And one of the, the team captain, his name is Momo. but then there's Mo Momo. There's another marble on team. Momo. It's super fun.[00:02:25] Angela: so captains are real people?[00:02:29]Jonathan: No everyone is marbles. they're all marbles. The referees are marbles. There's a whole like stadium of marbles, I that cheer and they hold up a little marble signs[00:02:36]Angela: And what, sorry, what is it called again?[00:02:40]Jonathan: It's it's called, Jelle Marble League. I think it's the name of the person who created Jelle's Marble League.[00:02:51] Angela: I want to say that I'm going to go check this out, but I'm really not sure that I'm going to[00:02:55] go check this out. Do you think my daughter would think this is funny too?[00:02:59] Jonathan: I think so. I think if you watched it with her[00:03:01] Angela: Like there's no bad words in it.[00:03:03] Jonathan: no, it's[00:03:04] Angela: Okay.[00:03:05] Jonathan: Um, You need to pick a team though, like go from the opening ceremonies. There's an opening ceremonies. Pick it. Yeah. There's an opening ceremonies. Pick a team, like decide on just some random team and that's the team you're going to[00:03:17] Angela: You got to stick with[00:03:18] Jonathan: It's awesome. Like, there'll be a, there'll be a moment where your team like comes back from the, from the back of the pack and overtakes, and you're going to cheer. I promise you you're going to cheer. So I think, I didn't think Julie would think this was funny or fun or anything, but she really likes it.[00:03:32] And, uh, we've been watching John Oliver and he he's sponsored the whole season. Yeah. So it's, it's a marble league presented by the, uh, Yeah, John Oliver, and every, every episode, a $5,000 donation gets made to a food bank in the name of one of the marble teams that wins[00:03:54] Angela: I love it. That's actually quite cute.[00:03:56]Grants and Goverment Funding[00:03:56] Jonathan: Yeah. It's super fun. Love to see how we transition out of marbles into something.[00:04:00] Angela: Oh, Lordy.[00:04:01] Well, so today's episode might put you to sleep. We're going to talk about grants, not equity, funding, and taxes incentives.[00:04:13] Jonathan: I mean it's okay. So it's not that[00:04:19] bad.[00:04:19] Angela: It's not[00:04:20] Jonathan: it's super boring, but it's an interesting, it's an interesting thing to talk about because, Canada, and in some ways, particularly BC is a very, is a really great place to start a technology company because of all of the government incentives.[00:04:36] Angela: exactly it. There's a lot of people saying that, Canada is going to be like the up and coming leader in tech, a lot of it has to do with the way that we welcome the way that we welcome tech firms, but also the way that we welcome tech talent too. Probably more importantly.[00:04:57] So that's, that's kind of cool. And I know for us, there's a there's, there was a couple of grants that we got that. It really got us over some super important bumps along the road. Like the only reason that Jackie's with us is because of the grant that helped, right from the get go[00:05:16]Jonathan: Tell me a little bit about the, about the grants that you received.[00:05:19]Angela: Backing up to about a year and a half ago now I was in contact with our local IRAP representative. So IRAP is the Industrial Research Assistance Program put on by the national research council in Canada here. And they have different types of pots of money. And maybe actually you should probably talk about, you know, kind of like more of the IRAP grant program, but what we accessed through them was a youth unemployment grant.[00:05:51]They had some certain qualifications that they had, and it was to be, like a relative recent grad from a post secondary institution. Um, so, and, and youth, so under 30, and I'm sure there was a couple other things like unemployed or underemployed. And right at the same time that I was talking to Kevin about that, I was also talking to Jackie who was still in university at the time about her honors thesis that she was doing, which was aligning beautifully with what we were doing. And then I was, I was thinking at the time, man, if I could afford to hire this young woman coming out of university, that would be great.[00:06:33] And right at that, But I think within that week or the next week, Kevin informed me that there was some, some money available around youth employment. And I was like, Oh, well, I have the perfect person and, uh, that's how we hired Jackie right away.[00:06:47] And I think they covered. I want to say it was 80% of her salary for like six months. And that was the only way I could have hired somebody. And I don't know what I would do without her. So thank goodness.[00:06:58]Jonathan: I don't think they're called grants.[00:07:01] Angela: am I calling it something wrong?[00:07:03] Jonathan: Well, I think, no, I think they call it a contribution. So[00:07:09] Angela: You're right. They did use that language a lot. Sorry,[00:07:15] Jonathan: yeah. There's a lot of, there's a lot of restrictions on[00:07:18] Angela: what we can call it. Yes. Thank you for, for clarifying that for me,[00:07:24] Jonathan: a lot of these funding opportunities, these government funding opportunities exist to help de-risk some of these investments, particularly that small companies might be making, like, you know, making a hire[00:07:37] Angela: is such a huge cost to, um, startups.[00:07:42] Jonathan: Well, it's the biggest cost usually. Yeah.[00:07:45]Angela:  and in our case It would have been a harder road. Had I not. we found a perfect fit and, we had more momentum with that hire than we would have otherwise.[00:07:57] Jonathan: Yeah.[00:07:59] Yeah. And it, it, I liked those ones. They also incentivize you to hire, you know, take that chance on someone relatively new. So it's, it's also de-risking that, right? Like, you don't really know if a new graduate is going to perform at the level that you need them to, or want them to, or be able to grow into that.[00:08:18] But if, if, if you're taking some of that risk off the table and, you know, giving them a little bit more opportunity to grow into that role, that's I get, like, I really liked the grants for that.[00:08:29] Um, just, you know, just let's de-risk this opportunity, hire someone, hire someone new, give them their first job. and I think that aligns really well with, our, our culture a bit too. Like both of us, both you as CRS and us as Two Story Robot.[00:08:46]Angela: because you're more familiar with IRAP's other programs. Did you want to talk about that at all? Or.[00:08:53]Jonathan: So the one, the one contribution that we receive from IRAP was a, was a small project. So it's under $50,000 and same, same kind of deal. Like they cover 80% of salary costs. but it allows us to explore a product that we wanted to build, with very little risk and we still had to, we still had to sell it to show the ability to actually pay for the entire project without the grant, or sorry, without the contribution. Uh, but once you got the contribution, then you're just kind of on the hook for the 20% plus whatever overhead you'd have to pay to keep that, you know, keep the lights on and then you get to you just kind of just get to explore this product and try and build this product, without, without a lot of that risk and it may not have ever happened.[00:09:41]downside is we, you know, we ended up. It just didn't work. We didn't have market traction for that, for that product.[00:09:47] Angela: but it allowed you to try.[00:09:49] Jonathan: yeah. And yeah, it allowed us to try and we learned a ton about just the process of building, building products, which led to getting hired Fresh Grade and some other things.[00:10:01] Angela: I think the, the whole idea of, de-risking projects to allow the creative freedom, to really explore and research and, and develop new things, is the idea behind it. But I know for us it's, it has been exactly that. We should say that also the, the process to accessing these types of contribution is a bit as a competitive process. There's limited, contribution availability out there and that, uh, like we've, we've asked a couple times for projects to be considered and we haven't been approved.[00:10:39]But anybody that I've spoken to that has access to IRAP money has said very, very good things about it and what it's done for them.[00:10:48] Jonathan: It's a great, it's a great program. It's, it's not overly burdensome to[00:10:53] Angela: No.[00:10:54] Jonathan: it's actually pretty, it's pretty easy. Um, we, when we had our agreement, it was right at the right during the time that, NRC got hacked,[00:11:05] um, and then we had to do everything by mail or by fax and it was, Oh, it was, it was, it was unpleasant. Yeah. I remember at one point yeah. Fax. I remember, I remember cause we didn't have a fax machine cause why,[00:11:23] Angela: Well, no. Why would you,[00:11:25] Jonathan: and it took me all day to figure out how to send a fax.[00:11:29]Angela: so you should have just gone to your local doctor office.[00:11:33]Jonathan: Yeah. I tried like our copier, the copier in the building had the ability to fax that didn't work. I w went up to Staples and said, Hey, can I fax this? And they said, uh, yeah that's going to cost you a hundred and some odd dollars. So why? Cause we charge by the page differently for a long distance fax.[00:11:52] And this is, that doesn't make any sense, like[00:11:54] Angela: Oh my goodness. Yeah.[00:11:57] Jonathan: so. Ridiculous. and then I came back and like explored all these things. But by the time it was all said and done, I had spent an entire, I wasted the whole day.[00:12:06] Angela: day[00:12:07] Oh, my word. Oh, my word,[00:12:10] Jonathan: machines[00:12:11] Angela: fax machines. No.[00:12:14] Jonathan: know. So silly.[00:12:16]Tax Credits[00:12:16]Angela: the other thing I did want to talk about was recently we received, like SR&ED tax credits. And so it's our, our first year, because 2019 was our first tax year where we were, we would have had activities that would have qualified for SR&ED. And I wanted to talk about that a little bit because.[00:12:38]number one, I was so impressed with the whole, uh, like I, we had a company that helped us out and they were amazing. I hardly did anything and yes, I paid them to, you know, a commission to do this, but, um, I didn't even think we would have qualified until a friend of mine she owns a tech company and Regina had told me about how[00:13:03] she also did the same thing and she's like, how's it just, just contact this guy and see if, if, uh, you know, maybe, maybe CRS has some activities for, for last year in blah, blah, blah. And it was amazing. He was just like, got me started and filled out the application for me, submitted everything for me. And I was just like, I w I was amazed at how slick the process was and, um, what a great tax incentive.[00:13:31] So SR&ED is Scientific Research and Exploration and Development[00:13:36] Jonathan: Scientific Research and Experimental Development.[00:13:39] Angela: development, um, tax credit. So anybody that's doing, um, Just new, new specifically. It can be in the resource sector too. Right. So like mining and, and, you know, like engineering and things like that. But also for tech back it's, it's building something new, uh, which what we're, which is exactly what we're doing and as a majority of our time and effort.[00:14:01] And so, yeah, we did that through them and I mean, you have to. So when you have contributions through IRAP and then tax credits top of it, it just like, I was, I'm just so impressed with how, um, how well that all came together for us. And a couple of them were surprises too. And I was like, Oh, thank goodness.[00:14:21] Cause this year was. tight year, so it continues to be a tight year. So very like, and these are the kinds of things that help us go through these first few years as a tech company. I mean, you're really not profitable until typically year three. And so it makes it, uh, it makes the tough times a little easier.[00:14:41] So that[00:14:42][00:14:42]Jonathan: so one of the really interesting things about SR&ED is there. They're trying to incentivize technical uncertainty. And they, they don't care if it succeeds or not. Like that's not, that's not on the metric. So you don't have to do something that is successful. You just have to try to solve a problem that has never been solved before.[00:15:00] Angela: I think this is why I'm so impressed with these types of, incentives. Let's just call them incentives and blanketed. That way is so much of what we're trying to do. Has a low success rate. Yet there's so many spinoff benefits of it. Even if it does fail, we learn things. We can try new things. Um, like all, all of those, all of those spinoffs are amazing.[00:15:29] And we have, um, Um, incentive programs and, and either government or non-governmental bodies that are supportive of that, that at least trying, even if you fail, we know that there's going to be learnings from it. We know X, Y, and Z will come out of it. Um, and they love that. I love that because, so I'm such a big proponent of systemic change and how hard systemic change is and can be that the failure rate is so high when it comes to trying new things and trying to change things, um, that it's. So it's so nice to feel a bit supported in a way that is meaningful around that, like financially[00:16:17] Jonathan: Yeah. Yeah.[00:16:19] We did our own SR&ED claim in the first couple of years that don't rec I don't recommend doing that[00:16:24] at all. Um, But I, I did it. I sent it off and the, the person from Canada Revenue phoned me up and said, okay, you've done this kind of wrong in some spots.[00:16:36] Here's what you need to do. You need to fix this part here. And I need some other documentation here and send it to me whenever you can send it to me, send it to me here. And I sent it and they come back to me like, yep, this looks good. Um, I need you to change this piece here.[00:16:49] And I would change that and send it back. It took, it took a long time and it was really complicated and I was really frustrated with it because I waited too long. but they were so helpful[00:16:59] Angela: They were cold. They were collaborative.[00:17:01] Jonathan: Yeah. Yeah. I mean, he wasn't like, he wasn't helping me game it in any way. He would just like pointed out the fact that I probably filled this out wrong and I needed to clarify that, but gave me the opportunity to fix it. And didn't say like, why you did this wrong? That[00:17:14] Angela: wrong. Send it back[00:17:15] without help.[00:17:17] Jonathan: just reject it.[00:17:17] They just, like, I recognize that there was a problem[00:17:20] Angela: That's so lovely. So my first SR&ED claim was done and I'm going to plug this guy cause I think he's amazing. His name's Daniah and it's Infinity SR&ED. And, um, so he helped my friend Kristy. So Kristy connected me to him and literally with, I think. I don't know, three phone calls, quite a few emails, like, you know, a few emails back and forth.[00:17:43] She got all the information that he needed. He made our first shred claim. And, and literally like then Daniah emails me and he's like, okay, Angela.[00:17:53] So they've processed it. Um, you're expecting this much back. And then he like connected like my accountant, um, directly. And I was like, it did honestly very little and then just like money in my bank account. The company's been counting on mine[00:18:12] Jonathan: Yeah. Yeah. And it comes as a check. Like it's not like a rebate on future tax[00:18:19] Angela: Yeah. This is not, uh, a tax. Yeah. Uh, re is that what it's called a rebate or whatever? Yeah. Like it's not like a tax credit. Oh no. It's[00:18:27] called[00:18:28] Jonathan: is a tax credit, but you just get it as a[00:18:30] Angela: It's a check.[00:18:32] Jonathan: It's not deducted from your tax filing later on in the year. You just get it back right now and you can, you can like, there's no stipulations on what you spend it on. You're probably going to spend it on salaries, but, um,[00:18:43]Angela: yeah, I just, I thought that was really, really slick. It was a bit of a surprise to me that we were even going to be SR&ED-able last year. Um, now that we look back on it and I'm like, Oh, well of course we were, but just at the time, I had no idea. So it's always worth looking into, even if you don't think that you might qualify for it yet, because we didn't even have a product at that point.[00:19:02] Right. We were in the midst of building one[00:19:04] Jonathan: that's, that's good. Right? And There's some great programs like the Venture for Canada, which is a new program that I didn't know about. Um, they will back 50% of a, of, uh, uh, co-op student. So they have to be enrolled in co-op. Um, And they will pay for 50% of their salary up to like $5,000.[00:19:27] I think it is. Um, that's a super, super great program.[00:19:31] Um, but you can also stack that against another grant that BC has as in the, so Innovate BC has a, has their ISI grant. And then they have this other thing called co-op they're funny.[00:19:41] One is you must be corrupt students. The other is you[00:19:44] Angela: You must not be a CO-OP. Exactly. Yeah, we'll be hiring an intern for the fall semester with the, she is not a co op[00:19:54] Jonathan: The ISI that's the innovative innovation skills initiative[00:19:58] Angela: exactly. And it's a, it's a collaborative program between Innovate BC and New Ventures BC[00:20:04] Jonathan: Yeah. Yep.[00:20:06] Um, have you hired the person yet? Have you identified the[00:20:08] Angela: Yeah, we have, yeah, September 8th or ninth.[00:20:13] Just part time. So they, because, because they are in school right now also, so they're going to be going to school while they do this.[00:20:20] Jonathan: local or? Sweet, that's exciting.[00:20:24]Are Incentives All They Are Cracked Up To Be[00:20:24] I actually have a, kind of a, also like an opposite view to grants and tax incentives. Um, and it's, it's something that, a bit of a mentor of mine had sort of pointed out was that it may actually disincentivize companies to do the thing that they're supposed to do, which is get revenue from customers.[00:20:45] Angela: Oh, okay. I can see how that can be distracting.[00:20:50] Jonathan: you can get, yeah, you can get really distracted with pursuing grants and because there's all of these available incentives, it becomes a bit of a distraction to pursue them all and, um, you know, to go and, you know, try and get your IRAP grant.[00:21:03] And if you can't get it, then, well, you know, don't try. But really like if you just, if you took it, the approach to building your product a little differently, you might not need the grant in the first place. I still think there's lots of room for, for grants in certain applications. And obviously if they're there, you're going to go and try and take advantage of them.[00:21:19] But I think it creates a, a weird, um, I don't want to say like a lack of hustle, but like a little bit of a lack of a hustle in companies, because they just think that the government will just support them[00:21:31] Angela: Oh, that's and you know what? That is a, that is a totally fair perspective. As a company that has emerged from a government funded project, we could have gone down that rabbit hole or real easily. What I think helped us is focusing on the product that you want to build, focusing on what the users want.[00:21:55] And in our case, you know, the other stakeholders being the patients, what makes the most sense for that? And. Pairing that with, I have a bit of a background in grants and funding and kind of knowing what's out there. So that was more organic for me is that the focus was build this and then[00:22:15] is there anybody out there that has some incentives to help us build this? And if not, we're building it anyway. But anything and maybe that's the way I've approached it is everything is a bonus to me. The SR&ED was a total bonus. I mean, didn't, didn't expect that one at all.[00:22:33] The youth employment grant was probably more pivotal. Um, because I knew I did want her, I, I, I don't, I don't think I could have hired her without it. So that was huge. But when you're talking about IRAP money, that is an interesting one because you have to be very, very specific on what you're doing. So here's a really good example of we've been in talks with IRAP about potential projects and things like that.[00:23:01] Just as, as advisors through IRAP are supposed to have conversations with companies like us, about. And, um, there's been a couple of times where we've moved ahead quickly enough that the program wouldn't have caught up with us. Like we would have had to apply for a program, but by the time the money had come up, we would have already built it.[00:23:22] It would have already been done. Like we're like now we're beyond that. We're going on to the next thing. but that could have been a spot where we could have delayed it. Cause it was like, Oh, we'll just wait for that IRAP money. Yeah. Wait for the grant, wait for the incentive to come out and then yada, yada.[00:23:37] So I think you're absolutely right. As, um, specifically someone in like my seat, you can get so distracted and that was actually leading into the other thing I wanted to talk about too, was these contests. And these, um, purses and pockets of money were like these pitch contests[00:23:57] and I will tell you, especially as a female founder, there are so many that are targeted at me. Like in any given week, I am getting probably five to six emails about something that somebody would like us to apply for and be part of, and I'm that, that can be[00:24:22] Jonathan: Oh, yeah. Cause I mean the, yeah, it's the point of every business is to enter pitch competitions and.[00:24:29] Angela: I can't I can't I'm so, um, and last year he got caught up in that a little bit. I will say, like, there was a couple, I probably entered four or five, um, unsuccessfully in most cases, but. This year it was one thing I told myself. I was like, you're not doing that this year. You're not entering these competitions.[00:24:49] You're not entering these contests. Um, you're focusing on the work that you need to do. I believe that the success will naturally come if it's meant to be. Um, but by distracting me getting up on stage and giving pitches and trying to sell me and the company to a bunch of people is just.[00:25:09] Who are not, let's be very clear. These people are not my customers at all. Like not even close, um, just there was no value in it for me, or very little value, I should say, because there, there is, there is monetary value to it, but, and the chances of success are so low.[00:25:26] Jonathan: Yeah.[00:25:27] Angela: Yeah. So anyway, 2020 is the year where we focus on a product and we do not focus on contests.[00:25:34]The Oppression of Pants[00:25:35] Nora. my youngest went horseback riding for the first time when she was out in Saskatchewan[00:25:41] Nora doesn't like to wear pants a lot and she's potty training.[00:25:44] So she's in panties all the time. And so she, so she rode a horse for the very first time. Bear back in panties. It was so cute.[00:25:59] Jonathan: why should we have to live under the oppression of pants,[00:26:02]Angela: Nora's words,[00:26:05] I no like pants

Show NotesWe talk about being a social enterprise, how long the journey can take for start-ups, and Angela reports back on the pricing exercise that she undertook to find the "right" price for Clinnect. Starting out initially as a government funded project, this company had a few roadblocks to overcome in becoming an incorporated for profit business; along with the typical issues to overcome like sustainability, scalability, and revenue.Healthcare issues are complex and Clinnect had to learn to focus on issues, we delve into the pros and cons of trying to find a niche product to address a narrow, but important, issue.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)TranscriptJonathan: Wait, I want to get one of those. Um, I think, do you think in the audio world they use those, those clacker things like in the movies, those, um,[00:00:07] Angela: It's called the castanet.[00:00:09] Jonathan: it's called a castanet? You know the word for that?[00:00:12] Angela: Like the clackers like that.[00:00:14] Jonathan: No, no, no, no. The thing at the beginning of a movie where they go, you know, act one or scene four, take three.[00:00:19] And they[00:00:20] Angela: Oh, I don't know what those are.[00:00:21] Jonathan: Uh, I think[00:00:22] Angela: Sorry. I couldn't see you when you were, when you were saying it. And that's[00:00:27] Jonathan: a castanet are those tiny little symbols on your fingers, or that we should get one of those cat little castanets[00:00:35] Angela: I have. I have some, because my, um, my daughter uses them for music class.[00:00:42]Introduction[00:00:46] Hi, I'm Angela Hapke.[00:00:47]Jonathan: and I'm Jonathan Bowers and you're listening to Fixing Faxes, building a digital health startup[00:00:53] Angela: and we just got some new mics.[00:00:55] Jonathan: New Mics! Uh, This is episode five. We've recorded the first four episodes on our headphones. No, what are these called?[00:01:05] Angela: headphones[00:01:06] Jonathan: No, these aren't, these aren't[00:01:07] headphones.[00:01:08] Angela: like the standard headphones that you get with your Apple iPhone.[00:01:12]Jonathan: Right?[00:01:12]but now we've got these great new, uh, very cheap, the cheapest ones. We could find Audio-Technica 2005USBs as recommended by basically every podcast blog I could find. Um, but they were sold out.[00:01:27] Angela: Well, and I didn't do any research. You did all the research and you, I just said, tell me which ones to buy.[00:01:33] Jonathan: Yes, but you found where to buy them because they're sold out everywhere.[00:01:38] Angela: I know, I know the weird places to buy things.[00:01:43] Jonathan: So that was helpful because I was starting to panic that we were going to have to buy $300 microphones instead of a hundred dollar microphones.[00:01:50] Angela: well, the package was $200.[00:01:53] Jonathan: Yeah. Yeah. Well, it comes with the, it comes with the boom arm and the monitoring headphones. Um, the Princess Lea headphones. They, they hurt my, hurt my ears just a little bit. Cause I like, do you notice[00:02:07] Angela: The glasses. yeah, they dig into your head.[00:02:10]Jonathan:  I've been wearing them a lot the[00:02:12] Angela: Oh, have you,[00:02:13] Jonathan: doing all my Zoom meetings like this with the microphone.[00:02:16] Angela: Is everybody commenting on the quality?[00:02:18] Jonathan: loves it. Uh, Yeah, everyone is saying Wow it sounds so good. And now Chris wants to get a microphone. He's he's got microphone envy.[00:02:27] Angela: That's definitely a thing in, in, and Zoom COVID days. Microphone and camera envy.[00:02:35] Jonathan: I, uh, we had a client meeting this morning and, uh, cause you can see the boom and the mic in the video call. And he says, Hey, what's that? I told them about the podcast and he holds up his really expensive microphone and say, well, let's. Let's compare. This is not, that's not[00:02:51] Angela: You're like, no. How about not?[00:02:54] Jonathan: he's got one of those pop filters and I think it's like a really cool condenser mic.[00:02:58] It is just sitting on his desk though. So he doesn't have the arm,[00:03:02] Angela: see, I don't know. This arm is like I'm that's most of what I love about this.[00:03:09] Pricing RevisitedJonathan: Uh, you know, what we need to talk about so speaking of the prices of things, so this being $200 and us thinking about, um, wanting to buy cheap. So this felt like the right amount of money to spend for where we are at in terms of our journey as podcasters. Um, but in the, in, uh, I think episode three,[00:03:29] Angela: I think it's episode three.[00:03:30] Jonathan: gave you some homework to go and use the Van Westendorp.[00:03:35] Pricing meter or price, price, sensitivity,[00:03:39] Angela: Price sensitivity meter.[00:03:41]Jonathan: Which is basically four questions that help you understand the pricing of a product. What are the results?[00:03:48] Angela: Okay. Uh, so, so we made the survey and I put it in linked it in an email, and then I just use my, my personal contact list and sent it out to a bunch of primary care providers and specialists that I know that I would hope that I could kind of ask a personal favor to[00:04:04] um, I sent it out to about 30 people, uh, nine or 10 of them got back to us. And there was some big trends showing up. So what you, what you have to understand is the four questions really kind of give you an idea of like the absolute basement. I wouldn't buy this because it's, it would be so cheap that it doesn't have any value all the way up to ,this is way too expensive for what I think the product is. So those are two questions and then the other two questions help kind of narrow in the, the, the sweet spot. So, um, just, , like what would you pay that's I, I think they use the word bargain and then what would you pay? And the, they use the word expensive.[00:04:44]And so what we did is we took all the responses, we plotted them on the sensitivity meter and before I say what the, it came out to be, I think last time, I guess, that it would be around $25.[00:05:02] Jonathan: Yes. I don't remember if that's recorded, but you guessed that it was going to be $25.[00:05:07] Angela: Well, and I I just figured it would be cheap enough that I could like, and I think maybe I was thinking that would be pretty, a pretty cheap price. So the price sensitivity meter put us in a large enough range of people, like on a, like a distribution graph. That would pay for Clinnect on a monthly subscription based model, between $50 and $75.[00:05:35] Jonathan: more than what you had thought.[00:05:37] Angela: A little bit more than what I thought now let's back that up. I think the original guesstimate that I gave, um, didn't have all the features that we were going to include in the basic model anyway. So we've upped the basic model to be kind of a basic plus model. And then what we did is we gave a really quick video on what we have in the product right now, and what features are coming within that basic model.[00:06:04]Then ask them to do, to answer the four questions. So we gave them a really good idea of what they're going to get for, for their money.[00:06:10] Jonathan: I love that you went out and talked with people[00:06:12] Angela: yeah,[00:06:13] Jonathan: feedback that was, uh, w would you say it was more encouraging to get those answers back the way you did?[00:06:20] Angela: I think when you build a product, your scared to price it, I think that's a scary thing to price it because now you're building a product, but now you're actually asking a very specific amount of money for it and asking people to take that out to their pocket and give it to you. So it was, it was a very, very vulnerable exercise for me.[00:06:42] And, um, yeah, I was nervous to do it. So happy I did though. Like, yeah, just so yeah, really, really good feedback really. And actually. Even since then it's caused a couple of people to come back at me and ask me like further questions and things like that, which is really great. Yeah. Like one of them was asking about, um, and not to get into the nitty gritty of it, but, well, how many users are you going to have per account?[00:07:09] And are you going to charge per users? Are you going to cut charge per account and with so many users and yada yada yada. So she had already started to get it into her head and was asking really good questions. And I said that I was like, Ooh, you've zeroed in on something that we've been talking about a lot.[00:07:23] And so I used that interaction then to ask her, I said, well, we're thinking about this. What do you think? And she was like, Oh yeah, that makes a lot of sense. And so just like stealing more information out of, out of everyone was yeah,[00:07:37] Jonathan: It's not stealing information.[00:07:39] Angela: not. It's it's asking your customer what they want. Yes.[00:07:44] Jonathan: Yeah. No, that's that's that's so cool. I think it's exciting that you have gone out talk to some folks, got some real feedback and got some additional feedback.[00:07:53] Angela: Yeah, highly recommend that anybody who's thinking and being scared about the pricing process, just ask.[00:08:00] Jonathan: I like that the, that price sensitivity model a van Westendorp is, is those questions. Cause you can just take it kind of copy and paste it, put it in there, remove some of the emotion a little bit, because it's not like you're on the phone talking with someone. You can just send this out somewhat anonymously.[00:08:15] It's not really anonymous, but you kind of send it out and it just removes that awkwardness and weirdness. And that anxiety, anxiety that you might feel.[00:08:23] Angela: Yeah. And I think that's exactly what I was feeling. So when I put it into a survey and I just, I think I threw it into Google forms or something like that and sent it out and just said, and I didn't ask for any identifying information. So, and actually said that right away, like, I'm not asking for your name.[00:08:38] Will you, you know that I know you were like participant number one, you can kind of anonymous anonymously do it. And I think that felt good for both myself and who I was asking to do it because these were for my personal contact list. So they know me quite well.[00:08:55]3 Years in the Making[00:08:55] Jonathan: what you want us to talk about today was the product development journey of Clinnect.[00:09:03] Angela: I want to talk about that today because. Up to this point, we've been talking a lot about like either current state or, um, like what we're doing right now. Hence the pricing thing and things like that. But I wanted to give a little bit of background about how we got to where we've got to and how long that journey took and how we've navigated along the way.[00:09:28] Um, just so maybe people listening can understand what that journey typically looks like, because so often we read, you know, success stories and you kind of get the story from the success on and not so much the really nitty gritty crap that led you up to that. And I'm not saying that our journey has had a lot of crap in it, but it's been a lot of, a lot of bumps along the way.[00:09:52] And I think talking about that, um, is hopefully good for people to hear. And, and maybe if they're in the middle of that keeps them, keeps them motivated to keep going.[00:10:05]Jonathan: how long of a journey has it been?[00:10:06] Angela: It has been three and a half years to now.[00:10:13] Jonathan: Till now, and we've[00:10:14] Angela: And we've just launched.[00:10:15] Jonathan: launched.[00:10:16] Angela: Yeah.[00:10:17] Jonathan: And we've only, we've only really been building, building the product, uh, for three[00:10:23] Angela: Three months. Yeah. Two or three months. Yup. Yup. Yeah. And we just launched three weeks ago.[00:10:30] Jonathan: you didn't have the goal of creating Clinnect[00:10:34] Angela: Nope. Nope, absolutely[00:10:36] Jonathan: w What was step one?[00:10:38] Angela: Uh, at the time I was working, um, at the hospital here in Kamloops as a project manager. And there was a, there was some government funding coming out for innovative projects that were led by physicians. And so there was a group of physicians in Kamloops, uh, the general surgeons that wanted to apply for this money.[00:11:01] But they needed to have a project manager attached to it. And at the time I was working four days a week, um, and was recommended to them too, that maybe I could take this project on for the fifth day.[00:11:15]Jonathan: This was a side hustle.[00:11:16]Angela: Total side hustle. And so what it started off as. Was the general surgeons in town really just wanted a place to centralize all of the referrals and pool them.[00:11:29] So equally distribute, distribute them or unequally distribute them purposefully, uh, among each of them. And so I thought, Ooh, that's kind of a cool project. I would love to try something like that. So that's where we started out. We got funding, um, in the beginning just to kind of do. Like analysis stuff, like typical government funding, you know, go out and do your, your SWOT analysis and your needs analysis and understand, you know, current state, blah, blah, blah.[00:11:58]We already kind of knew what we wanted and it seemed to fit with the analysis. So then we started to build a very manual process for centralizing referrals from primary care providers in the Kamloops catchment area, um, for general surgery. So we started that in August of 2017.[00:12:20] So that's coming up on three years ago. It was by December that year that we realized that we were, we might be onto something. The process that we were building along with the data that we were grabbing was becoming talked about a lot, not necessarily our data, but, um, in the, in the way of like wait time, data and referrals and centralized processes and things like that.[00:12:44]We also thought that maybe it would get absorbed by like a health authority or ministry or something like that. So we built it in that way that we thought, well, somebody else will take this on in the end.[00:12:55]Jonathan: As in, like, just take over, take over whatever process you've defined?[00:12:59] Angela: And there was a lot of advisors even advising us down that road was that if you build a good enough process, the, the health authority of the ministry will, will likely, um, grab that and integrate it into some kind of workflow that they already have. So we got pushed back on that.[00:13:18]Jonathan: From the health authorities?[00:13:21] Angela: So what ended up happening in about the same time that we were doing all of this, we incorporated Central Referral Solutions. So when a government funded project gets incorporated, some eyebrows get raised sometimes, and it wasn't an overly popular thing to do. Um, but we needed to do it for ourselves.[00:13:45] Like we were, there was a lot of us that were, that were, you know, shareholders in it or like stakeholders at the time and shareholders now. And we, yeah, we just kind of thought that we were onto something. So we incorporated, and so then we were seen as this, like this corporate entity that, you know, and there was just this push pull.[00:14:06] We were also starting to talk about wait times in a way that wasn't overly palatable at the time, because we wanted to talk about the whole wait time journey. And I think we'll probably do we'll deep dive into that at another time. Yeah. Yeah, because there's, that's a whole episode in and of itself, I think right[00:14:28] Jonathan: Well then we'll save that for another[00:14:30] Angela: Yeah. and then at the end, you know, when we started to bump into things, people weren't really overly welcoming to take this on from a health authority or a ministry, um, perspective. Uh, we decided to monetize it because that made the most sense. Um, and in a way that we knew we were a social enterprise, uh, we still incorporated and things like that.[00:14:52]A For Profit Social Enterprise[00:14:52]Jonathan: So you're a for profit[00:14:54] Angela: Yup.[00:14:55] Jonathan: company, right. Your company. So that by definition is for profit, but a social enterprise[00:15:00] Angela: but a social enterprise. So a social enterprise has not investors and making money at its core ethos, but rather, um, a social good at its core ethos and its core philosophy. And for us that we're not out to make a ton of money to make a change in a system.[00:15:22] And so that's why we call ourselves a social enterprise, but we are for profit. And I think that's another reason that it's been so hard to try and explain who we are and what we are. And especially in the beginning, because we weren't maybe even comfortable in her own skin in saying that. And I'm, now that I'm like saying it, I'm like, I don't even know if I still am.[00:15:41]Um, but. We knew that we knew that we were onto something, but we also knew that we could make a lot of good with it and do a lot of good with it.[00:15:48] Jonathan: Um, I mean, I, I agree with you, like I've, I've, I, I've done a bit of mentoring with social enterprises, mostly in the non profit side of things. And one of the things that they often struggle with is how to be sustainable, how to, how to do what they're doing. And, um, yeah, I guess scale that up. Right? So there's, so they're often so dependent on grants and they spend so much time just applying for grant money and not revenue from some product or service that they're offering that can, that can sustain the growth of this social thing that they're trying to do. Some, some organizations are very, very good at this. Most struggle. So you're describing, uh, an organization that is almost engineered in a way too, to be sustainable. There's the profit side, which sustains itself and sustains its growth activities. And then the the impact of the, um, of the activities you do have, have a social good. But you do have to monetize that, which you talked about, uh, just a second ago, you said you're trying to monetize it.[00:16:55] walk me through that a little bit. at a basic level, I think people can understand, like we're charging for the service,[00:17:00] Angela: Yes. So maybe what I'll do is I'll talk about a little bit about how we got there and I, what you just summed up doesn't happen easily and quickly, um, it's not as, as, as pretty as the summary that you just gave. Uh, it's usually ugly and bumpy along the way. And it has been a little bit ugly and bumpy for us along the way.[00:17:22] So what we started with was general surgery in town and I call it kind of like our R & D department is, um, we've created the central intake and the central referrals, um, to go and then be pooled among the groups of surgeons. And so in doing this, we were able to trial like a whole bunch of different types of workflows.[00:17:41] We were able to even trial, like the way we say things, which in healthcare can be the, be all and end all of things. Yeah.[00:17:48] Jonathan: Say things to, to patients or[00:17:50] Angela: okay. Well even just like literally the wording that would be on a referral form. Yeah. The impression that that word gives when you read it versus what you, the intended meaning versus what maybe the reader means.[00:18:04] And we've actually had a couple bumps along that way. Also the development of categories, referral categories. And we've talked a little bit about this in the past, but like Clinnect itself has started to create the idea that we should have a very strict set of categories that referrals come in. And like, even that we trialed with general surgery. Just really help in helping us understand what does a wait time mean? And then we've also done a little bit of consulting to help us gain even further insight. And we always say that. You know that this further insight will just help us develop the product even more. So in doing all of this with general surgery, kind of being our R & D department, we were able to go, okay, we have this, we were able to get a really nice workflow going, except.[00:18:53] It wasn't scalable. It wasn't sustainable. We were hitting we're bumping into exactly what you're talking about with, you know, the social enterprises and not being able to maybe get over that hump. We were able to get over that hump with Clinnect. And so that's where we were able to say, you know what, now we are, we are an incorporated company.[00:19:12] We are a social enterprise and we are going to be charging for a product. And that is Clinnect. And we were able to kind of take all of the learnings. Through doing this with general surgery over the past three years and finally build something.[00:19:25]Jonathan: When you say it was not scalable. I imagine that means, uh, it's very dependent on manual labor?[00:19:32] Angela: Yeah. Almost entirely dependent on manual labor. So when the workflows were, um, disjointed, so it required somebody to do one thing in this one software, take it over here and do another thing in this other software and then take it over here and do X, Y, and Z with it from there. nothing was automated, nothing was overly efficient.[00:19:55] There's room for error when you have a human doing all of this. So, it was way too expensive to have somebody doing this. So learning all of that is why we built Clinnect. Because we knew we were onto something and then just taking all those learnings and then automating them.[00:20:10] And it took a long, took really long time to figure that out and what that should look like.[00:20:15] Jonathan: I think, I mean, I think it's interesting to tie that back to the pricing a little bit like the, um, what Clinnect can do for 50 or $75 a month, how much work would that take a person to do?[00:20:27]Angela: So we priced that out because we were looking at doing exactly that and it sits around the 400 to $450 a month.[00:20:34] Jonathan: Right. So, so the, I mean, ultimately the value that's being created here is around $300 a month.[00:20:45] Angela: Which is pretty neat.[00:20:46]Jonathan: okay. Think back to my economics. What does that piece, when you draw the, when you draw the diagram and in that difference there that's the[00:20:55] Angela: I know exactly what you're talking about, but I cannot remember[00:20:59] Jonathan: We've forgotten so much of our MBA,[00:21:01]Angela: I think you learn about that in first year, business degrees.[00:21:06] Jonathan: I know my MBA was a lot of first year business stuff cause I didn't take business.[00:21:11] Angela: neither. Oh, my goodness. I love it.[00:21:15]Lessons Learned in 3 Years[00:21:15]Jonathan: So this has been a three year journey. We've we've really just started it's. Um, but it has been three years. So what, what are some of the other, um, some of the other lessons that you maybe have picked up in those three years, besides, you know, besides some of the domain specific stuff around the problem that you're solving.[00:21:37]Angela: I think what we learned big time as there's no quick fixes in healthcare. I was a little bit naive and we first did the project that I was like, Oh, we're going to do this and we'll fix this right away.[00:21:48] And there's just, yeah, there's just no quick fixes. good fixes take a long time in healthcare. They require a lot of thought and a lot of understanding because the, the problems can be so complex. Um, and it's hard to narrow in on problems because. In healthcare, there's so many other problems gleaming around that problem.[00:22:13]So that was kind of another thing that we learned is, you know, laser focus on the one thing that you want to change and go for it. And there was a few times, even you, would I be sitting in a meeting with you and I would have another idea for something else. And you would say, okay, you need to be laser-focused, Angela. I was like, right, right. I need to do that. So that was, that was.[00:22:36]Jonathan: Clinnect does feel very focused. even in some of the, planning meetings, it, we start talking about some features and some things that start to start to lose some of the focus, but yeah, it starts to broaden, broaden that scope of it. But at its core, it's a very focused product.[00:22:51] Angela: And I like that. And I think that that's a really hard thing when you're getting into healthcare solutions. It is really hard not to go for a bunch of things at the same time, but I think you're going to have a better success rate. If you really laser focus on, on kind of one solution, one problem, one solution, and then go from there and you can always build out afterwards, but, you know, try and try and focus on that first.[00:23:17]Um, there's also this thing around solving problems in healthcare that can be really distracting. And especially when you're maybe working with government bodies and things like that is solutions tend to be. Um, system centric versus versus like a patient or provider centric. And you can go down kind of rabbit holes.[00:23:41] Um, That maybe at the time seemed like you're solving a solution, but you might be talking to the wrong people about what that solution should be looking like. And I think this, once again, goes back to talking to your users and talking to the real stakeholders in this meaning, patients, providers, people that are going to actually be using this stuff.[00:24:03]For us at Clinnect we definitely had the opportunity to go down that system centric solution road. It would not have felt nearly as good as what this does, because what we're doing right now is we're really working with a solution that's going to benefit, um, the broader, good, not just the system.[00:24:25] So, so there's that.[00:24:27]Ruffling Feathers in Healthcare[00:24:27] Jonathan: does that ruffle some feathers a bit?[00:24:30] Angela: Of course it does. Yes. Yeah. Um, it can be hard because healthcare is so riddled with what we've always done it that way, which can be a real big barrier to systemic change. But then it's also layered on what I found a little bit with. Um, not just, we've always done it that way, but a pride in that way that maybe they've done it.[00:24:58] And so when you're asking people to start changing workflows and changing the way that they look at it, it's a, it feels personal when it's really, it's not it's, it is systemic change, not personal change, but, um, in something like healthcare, Right. I just feel like there's so much passion in their jobs and their work and their, and, and things like that, that people can get really defensive very quickly.[00:25:24] Um, when you're suggesting maybe bigger changes. Yeah. I think also for me, it has been surrounding myself with people that know way more than me.[00:25:38] In multiple facets. I think of, you know, even my, my, so my cofounders are general surgeons and, obviously they know way more than me when it comes to medical stuff. Then, , I partnered with, uh, with you guys at Two Story Robot and you guys know way more than me when it comes to tech stuff and yeah, just surrounding yourself with people that, that are amazing experts in their different domains really helps.[00:26:07] And it also like it doesn't put the pressure on, you know, the founder or the CEO to come up with all the solutions, but rather just, if you surround yourself with people who know better than you, then it, it helps also surrounding yourself with really good people because you will get beat up and you will fail and you will have to get yourself back up and you might sometimes need a need, a hand to get back up and[00:26:30] Jonathan: Yeah, I need a little reminder that, uh, why you're in this in the first place.[00:26:34] Angela: Yeah, yeah, for sure.[00:26:38]We Have Great Reviews![00:26:38]Thanks for listening to Fixing Faxes, building a digital health startup. I'm Angela Hapke. And my cohost is Jonathan Bowers. Music by Andrew Codeman. Follow us on Twitter at @FixingFaxes. You can find us wherever you like to listen to podcasts. And please do us a favor tell a friend. Thanks for listening.[00:26:55]Jonathan: Did you see the other review that we have?[00:26:58] Angela: My husband.[00:26:59] Jonathan: it came up.[00:27:06] Angela: He is, he's like her biggest fan .[00:27:08] Jonathan: I'm going to steal a joke from Bronwyn, uh, he's such a fan, he married one of the hosts.

Show NotesThis episode finally delves into who Jonathan and Angela are, a bit of our backgrounds and how we both took very different paths to get to where we are. We give shout outs to our team, mentors, friends, and family.We talk in this episode about non-medical fabric masks and we wanted to give a shout out to Sew the Curve Kamloops. We also mention a local company Desert Lily Clothing that made the custom masks for Two Story Robot.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)Transcript[00:00:00] Angela: Just buy a mic.[00:00:00] Jonathan: You're just going to buy a mic anyways.[00:00:03] Angela: Why not?[00:00:03] Jonathan: Okay. Well tell me if you do, and then I will also buy the mic and[00:00:06] Angela: Well, okay. I don't want to make you buy a mic,[00:00:09] Jonathan: Well, no, no, no. Cause I, I will, um, I kind of want to[00:00:12] Angela: Let's just buy my mics then[00:00:15]Intro[00:00:15] Jonathan: Hi, I'm Jonathan Bowers. I'm the CEO of Two Story Robot and we're helping Angela build a digital health startup. And we had a bunch of masks, custom made masks that I delivered to my team yesterday. Yeah, it was super fun.[00:00:34] Angela: do people like them.[00:00:35] Jonathan: Yes. Uh, Lindsey posted a picture of her wearing our branded mask, the branded hat, some chainmail, and a sword to vanquish COVID[00:00:50]Angela:  that's awesome.[00:00:52] Jonathan: I'm excited We made a, I think there's like 35 or so. Um, so we're distributing everyone on the team gets one, it's the Olsen[00:01:01] Angela: The Olsen mask[00:01:02] Jonathan: got. Uh, I had her use some scrap fabric, whatever scraps she had for[00:01:07] Angela: well, that one has hello,[00:01:08] Jonathan: This one is Hello Kitty.[00:01:10] Angela: That's cute. That's perfect.[00:01:12] That's super fun.[00:01:13] Jonathan: Yeah, it's super fun. We're going to sell them, sell the extras, mark them up a whole bunch and give a, give the profits to charity.[00:01:21] Angela: That's great. Awesome.[00:01:23] Hi, my name is Angela Hapke and I am the CEO of Central Referral Solutions. The company that has launched Clinnect the digital health product, um, that Two Story Robot is helping us with. And speaking of masks I made masks for. Sew the Curve Kamloops, which is a grassroots organization that made over 10,000 masks for, our geographic area around Kamloops and, um, not just mass, they made scrub caps and, um, bags.[00:01:58] So like healthcare workers could put their, their scrubs in their clothes, in a bag that had like a drawstring. So they could just dump them in the washer when they got home and things like that. But it was really, really cool in the beginning of COVID to be part of something that was, um, that was really.[00:02:14] Making an impact like that. So I think I ended up making about, I want to say about 40 scrub caps and about 25 masks.[00:02:26] Jonathan: Yeah, the, uh, we hired a business out of the Sew the Curve to make our masks, somebody new who is just starting a business for the first time. Um, and she, you know, she wanted a Desert Lily Clothing.[00:02:39]She is going to make children's clothing, but then became really active on the Sew The Curve. And so we reached out to her and she was super excited about it. So yeah. Yeah, that's fine.[00:02:49] Angela: Hence the Hello Kitty uh, scrap fabric[00:02:51]yup. There we go. Somebody we can talk about today.[00:02:57]Getting to Know Each Other[00:02:57] Jonathan: Well, I wanted to, I wanted to get to know Angela. I already know Angela.[00:03:03] Angela: But do we like, so this is an interesting part is so we've known each other for a few years now. and I feel like, um, we know each other from like the last five years of our career, but I don't actually know the Jonathan pre.[00:03:20] Pre age 30 or something like that.[00:03:23] Jonathan: How old do you think I am?[00:03:24] Angela: I know exactly how old you are, because you're the same age as me.[00:03:27] Jonathan: Oh, am I?[00:03:28] Angela: Well, you're a few months older[00:03:30] Jonathan: Oh, okay. When's your birthday? What? In December. Oh, so you haven't,[00:03:35] Angela: I[00:03:36] Jonathan: you haven't[00:03:36] Angela: the big four. Oh[00:03:38] yeah, but I mean, you turned 40 during COVID.[00:03:43] Jonathan: Yeah, it was, uh, not the birthday I wanted, but it was still, it was still enjoyable. It was still fun.[00:03:49]Angela: Brad and I will be married 10 years. This December, I will turn 40 this December Yeah, we had plans to go to France. I really lovely trip. And none of that's going to happen now. So no I'm adjusting expectations as is everyone right now with life.[00:04:11] So, yeah. So, so how do we segue into the, who are we?[00:04:17] Jonathan: talk about it. Who, who, who is Angela?[00:04:20] Angela: how far do you want me to go back?[00:04:21]Jonathan: well, I was thinking about this. We met, um, when I was working at FreshGrade. Um, I was, one of the first employees and I can't remember how big the team was at that point, but you, knew one of the founders, Steve, Steve Wandler, or you knew Steve from some other thing and you were doing some kind of project through your MBA.[00:04:44] And I remember that, but I don't remember much about it. I just remember that. That's what you were there doing. And then, I dunno, you went and finished the MBA. I went and did some stuff. And then, and then you were back in Kamloops and you came, I think you came through, um, the innovation center. And I think that's how we got reintroduced.[00:05:04] Angela: I think that was I actually, I think it was Steve again. So Clinnect is, is a long journey. Forget about overnight successes. Long journey has been about three years in the making. We started off as a government project. Um, and we thought we kind of landed on something really interesting.[00:05:24] And I wondered if we couldn't make it some kind of digital health product of some kind. And so I sought out Steve, um, Just because previously I lived in Kelowna, I worked for what at the time was the Okanagan Science and Technology Council, which is now morphed and grown up into Accelerate Okanagan and I, so I knew Steve through that and we remained in contact.[00:05:51]Uh, I helped him, um, with his very first Metabridge events. Metabridge is at its root , um, uh, a series of events that would connect, um, BC and the Okanagan to the Silicon Valley. So I was helping him with that. Uh, we moved to Kamloops, um, because Brad got offered a job up here in Kamloops. It was a great one. We need, we were looking at a transition at the time. Anyway. I started working at the hospital as a project manager at Royal Inland hospital, first in the emergency department and then for the hospital itself.[00:06:25] And that's how I got introduced to a group of surgeons that wanted to do a pooled referral. Um, what we soon found to be unscalable and unsustainable way? And we thought, you know, I think there's a better way to do this.[00:06:38] Hence Clinnect was born. And at that point I reached out to Steve to say, I need a technical team um to do this and I actually I actually bounced the idea that we were bouncing around the ideas of whether I build it in house or um find someone[00:06:58] Jonathan: to do that and right away he mentioned you he said um[00:06:59] oh really? Oh, that's cool. I don't, I don't recall that, but, okay. Yeah.[00:07:03] Angela: And so, and I think that's how we met. And then it just kind of morphed organically from there is I realized like, Oh my gosh, trying as a nontechnical founder to build a technical team would be a little unruly.[00:07:19] And so then you came along and we're like, perfect. You guys can build it. And then I hired a software developer anyway, because she's brilliant.[00:07:28] And,[00:07:28] Jonathan: Oh, she's awesome. Jackie's the, Jackie's the best?[00:07:31]Angela: yeah, so she's been working with you guys straight out, straight out of university.[00:07:36]MBAs[00:07:36]Jonathan:  you did the MBA at both the university of British Columbia and Thompson Rivers University[00:07:41] Angela: Correct. So I did my core MBA through UBC Sauder School of Business.[00:07:46] And so you had to, like, I was flying in every other weekend for three days. And it was just getting too much on my relationship with Brad and I just, I couldn't do your number two right away. And then they changed it so that you couldn't take off, you had to start all over again. And I was like, Oh, that's not going to happen.[00:08:06] And the price had gone up in the time that I had started to when I wanted to go back and do my second year. So we went to TRU or Thompson Rivers University, and they were like, Oh yeah, Come well, we'll give you all these credits for your core MBA classes and you can finish here.[00:08:24] Jonathan: Yeah, I did. So I did the same. I did the same MBA program at UBC a few years before you, I think, um, and we had the reason why I chose it was because they had a, they had one that had a part time program.[00:08:39] And then, and they said, Oh, and you can, you can do this from Kelowna. I was like, Oh, that's, that's an easier drive. But when you get into it, it was just, no, you've got to come down for pretty much everything. But I remember those, those, it was like every other weekend I would, you know, leave, leave work at lunchtime ish on Friday[00:08:59] Angela: and wouldn't get home until,[00:09:01] Jonathan: Yeah, like a late Sunday night and just the whole, the whole weekend in that basement. Just[00:09:08] Angela: in the basement. No, I don't think I even remember windows in that[00:09:11] Jonathan: no, but I remember I enjoyed it. I loved it. I[00:09:14] Angela: to say the programming was unreal. It was very, very good.[00:09:20] Jonathan: And my, yeah, the classmates, like I still am in touch with, uh, not as in touch as I should be or wants to be, but I'm still, still in touch with a lot of my cohort. Um, Just, yeah, I had a much better experience in my MBA program than I did in my undergraduate, um, computing science program. It was just so much better just could have done with the driving and, um, yeah, it was also a pretty heavy strain on the relationship.[00:09:46]Undergraduate Degrees[00:09:46] Angela: Um, where did you do your undergrad?[00:09:47]Jonathan: I went to SFU, Simon Fraser University in Burnaby. So I did my undergraduate in computing science.[00:09:53] Angela: Did you go straight from high school to university or did you take some time off?[00:09:57] Jonathan: No. Well, I went, I, not exactly. Like I there's a university college in Salmon Arm. So I did my first year there. Cause it was cheap and they actually had a very, very good science program and, and computing science instructors,[00:10:11] the physics, the math and the computing science instructors at Salmon Arm were just very, very good. Like I remember, I remember in one of our first year computing science programs, doing stuff that. We never even came close to doing in the four years at, at SFU.[00:10:28] Angela: Wow.[00:10:29] Jonathan: Uh, I really liked it. And then yeah, I went to SFU for the remaining six years, six years of my degree.[00:10:38] Angela: Sorry.[00:10:39] Jonathan: six Yeah. I took like seven years to do my undergraduate degree. Yeah. Yeah. I took a year off, not quite a year off. I took basically a year off. I took her a couple of semesters where I only took three or four courses.[00:10:53]Working Through University[00:10:53]Um, I also worked through through university. I had a, I had a very, it wasn't a, it wasn't a hard job, but it was, um, it was very relevant.[00:11:02]Somebody referred me to this, to this person in Hawaii who, uh, was like, who needed help doing, doing some work on websites and stuff?[00:11:11] I was like, okay, well, I'll sure and, uh, he just employed me through through university and it was. No, not a lot of work. It was maybe maybe 10 or 20 hours of work a week if that, but it was in US dollars and pretty good, pretty good wage.[00:11:27] So yeah, I was, and the stuff that I got to do was kind of, um, wouldn't say over my head, but the clients were not the clients I should have been interacting with.[00:11:38] Angela: Right. You're a little bit out of your[00:11:41] Jonathan: they were big.[00:11:43] Angela: That's awesome.[00:11:44] Jonathan: I worked on a pharmaceutical for a large pharmaceutical company helping with some of their, some of their website.[00:11:50] I worked, uh, at one point we had a client that was, um, going to be featured on Oprah. And so they said, yeah, we're going to get an onslaught of orders to our eCommerce site. So we just want to make sure that things are like tickety, boo. And so.[00:12:09] Yeah, he phones me. He's like, Hey, can you, can you spend the next couple of weeks getting ready?[00:12:13] I'm like, okay, sure. And I go in there, I'm like, Oh man, there's a whole bunch of stuff that needs fixing. And I would fix a bunch of things and report back. And then, uh, yeah, it was, it was a neat, it was a neat, like, very, very odd job for me to have as a university student. But, um,[00:12:28] Angela: That sounds like a perfect odd job to have.[00:12:31] Jonathan: it was, it was, uh, I could one work remotely, which in 2000 whatever. um, was a strange thing, right. Working, remote and working on the types of things that I was doing, which I was very excited about. Um, yeah, it was a good, it was a good job.[00:12:47] Angela: Did you, so, okay. So like 15 year old, Jonathan. Did he know what he wanted? Like, did he know that he was going to be doing what 40 year old Jonathan is doing right now?[00:13:01]Jonathan: Um, maybe not exactly, but, uh, pretty close. I think I was doing lots of programming classes and I was doing stuff like that on my own time. Um, it wasn't really though, until I got into maybe grade 12 that I was really doing, like taking it more seriously. And I had, I mean, I, I had basically started this, not this company, but this version of version of this, when I was in grade 12, I had made friends with this, um, with someone in a game who lived in New York, who happened to be a really good graphics designer. Uh, and then one of my other friends from high school and we started building, management information systems for people, for other companies.[00:13:41] They were like, it was really, really small potatoes. Like they were, we built the theaters, um, the, uh, like a system for the theater to update their what's what's playing.[00:13:50] Um, and so we built that and we like learned all sorts of technology and ideas. And then, so yeah, it was, it was great.[00:13:56] Uh,[00:13:57] Angela: is so cool.[00:13:59]Linear paths vs Z-shaped paths[00:13:59] I like your linear process.[00:14:03]Uh, well, if you want to, I have what we call it, like the, the, the Zed. Uh, path[00:14:08] Jonathan: Okay. Your, Oh your Oh, my path was linear. Oh yeah.[00:14:11] No, my path was very,[00:14:13] Angela: Yes. Yes. Sorry. I meant your path. Not your, yeah. Your path. Like, I feel like 15 year old Jonathan, you could potentially see, okay. Where[00:14:23] Jonathan: Oh, yeah. Yeah, it was, it was pretty clear from when I was fairly young and that, I mean, that comes from some pretty significant privilege, right? Like I've got a computer when I was quite young and then never, um, I didn't feel like I was missing anything.[00:14:39] I mean, I also, I also had to like save up and buy some, buy some things, but I, you know, I had some jobs, which again was some privileged cause my dad helped me get those.[00:14:49] and uh, yeah, and then I just got like a lot of experience, very, very young and very relevant experience. But yours was a Z yours wasn't straight like an arrow like mine was?[00:15:02] Angela: Oh, Oh boy, uh, grew up on a ranch in Saskatchewan. Um, and then I left for university when I was 17,[00:15:12] Jonathan: Oh,[00:15:12] Angela: because, well, because I'm a December baby. So I was actually, uh, 17, my whole first semester of university. I moved four or five hours away. Um, Lived in an apartment with two friends and had just way too much fun, um, applied to university, got in, uh, for a kinesiology degree.[00:15:31] actually, sorry, I applied and got in under a business degree. So a marketing degree is what I was going for. And then I went to one economics class and one statistics class and hated it. And so I went down to the student counselor and said, I don't think this is for me.[00:15:51] Like, I don't even like where was my resiliency? No idea. Um, went down to that basement. Said to her. I can't like I can't do this. And she goes, well, what are your interests? And it was like, I really liked sports when I was in like in high school. Like, that was my thing. I loved sports. And she goes, well, have you looked at her kinesiology program?[00:16:10] I looked at it and it involved a lot of, a lot of classes that were like, I took fencing,[00:16:18] Jonathan: Yeah. As a class.[00:16:24] Angela: Oh, Tai Chi. Ooh. I took Tai Chi, like just random. And I looked at this and 17 year old[00:16:30] Jonathan: You went through the like parks and recreation catalog and thought that,[00:16:35] Angela: Yeah. She could have handed me the parks and recreation catalog. I was like, yep.[00:16:39] That's for me. Um, yeah. Seventeen-year-old Angela was, was. Going to do that and pair it with an education degree. So now I went from marketing and I was going to, because Lethbridge was the university of Lethbridge was well known for its education degree. And you could get a dual degree in five years.[00:16:58] And I thought, well, that just makes a lot of sense. And so I was on the path to be a phys ed teacher[00:17:06] Jonathan: I don't imagine you being a phys ed[00:17:08] teacher at[00:17:08] Angela: no, I would have been an awful teacher period. so third year I've now decided I just want to go do something different for the summer. So I decided to move up to Lake Louise and worked for whitewater rafting company, which I did. four months turned it into eight months and then they decided that I had to go back and finish.[00:17:29] I had 15 classes to finish and I had a goal of finishing the by September. So January to September, I was going to finish 15 classes.[00:17:39] Jonathan: that's that's ambitious.[00:17:40] Angela: So I went and I told somebody this, and she goes, Angela, you can do this.[00:17:46] but you cannot go below B in any of your classes. Well, 21 year old Angela was up for the challenge and I did it. So I finished by September and they phoned me and they were like, Angela, we're really impressed with your work ethic and how you came back and you really upped your grades and you kept the up blah, blah, blah. We'd like to invite you to do your master's program with us. And then all of this, I'd never got into the education program because I didn't have a 4.0 GPA.[00:18:19] And like four kinesiology students get into the ed program, they forgot to mention that to me when I was like, this is what I want to do. Uh, so then, uh, I got this phone call and I said, thank you very much. Um, but I have a job in Banff and I'm just going to go be a, like a, uh, gonna go be a ski bum for the winter.[00:18:39] And she just laughed and she goes, okay, have fun? So that's what I did. And what was only supposed to be eight months in Banff, turned into four years.[00:18:47] Jonathan: Cool. You ski bummed for four years.[00:18:53] Angela: In a way. Yeah, but I actually got like a pretty grownup job at a pretty young age there. So I was, I was a project coordinator for a destination management company. So it was managing these big corporate events and vacations and things like that. That's where I learned, like everything I kind of needed to learn for project management in the future, because I worked for this amazing woman named Laurie who had this really cool company, but she was like, she was really tough on , on, um, internal workflows and what must be done so that you could hand over projects really easily.[00:19:30] So she kind of trained us all to, and that set the stage for, so for me, kind of in the future. So then we met, I met Brad, we moved to Kelowna. I started working for the Okanagan Science and Technology Council, as I mentioned. Um, got into tech, which I like, then I was like, Ooh, this is fun. Um, in all of this, I've like, I've done wedding planning.[00:19:52] I've I've, I've worked like you talk about what you worked during university. I worked at the Nikka Yuka Japanese gardens. Like as a tour guide wearing a, um, a yukata. So it's not a con kimono, but it's a yukata. And like, it was just like Zed path. And then, um, moved to Kamloops, got into health care. And then I blended those two passions of healthcare and technology.[00:20:20] And here we are,[00:20:23] Jonathan: That's so funny. It is a Zed path, but I like that, like I like.[00:20:27] Angela: the ridiculous it's Zed path.[00:20:29] Jonathan: No, I feel, I feel like my path is a little restrictive. Like it's, it's good. It's focused, but I don't have a ton of breadth of experience.[00:20:40] I mean, I have, I have different experiences, obviously. I'm not totally, uni-dimensional, but where you, you know, you've got these other things that you can draw on that are okay.[00:20:52] Roll your eyes.[00:20:53] Angela: I rolled my eyes because it's like, yeah, I guess I can, you know, you're, you're right there at different experiences. That's for sure. But, Oh man, I also feel like I delayed. My career by at least four years by sidetracking and going to, you know. Like Brad always jokes that my time in Banff was my never, like, it was never, never land.[00:21:17] So it didn't age or gain[00:21:20] Jonathan: Gain anything. You're stunted by four years,[00:21:24] Angela: I'm stunted by four years. So we would joke about when, how old I'm turning. We minus four, because[00:21:29] Jonathan: you have the emotional maturity of a 30 something year old, not a, not a nearly40 year old.What Do You Want To Do When You Grow Up?[00:21:38] Angela: Yeah. And Brad, so Brad has a similar path to you and I just find it so fascinating when I meet these people that are like, okay, they were in high school and they could see themselves doing what they do now.[00:21:50] Jonathan: Yeah, I don't, I don't see that a lot. Like I've I talked with not a lot of high school students, but a fair number of high school students and, and they, you know, some, some of them are like just clearly like, yep, I want to program.[00:22:03] I want to be, I want to do this, but most, most just have no clue.[00:22:09] And it's hard, like, and the pressure to the pressure to have made all those decisions in grade nine, you know, what do you want to do when you're in your late twenties? When you're in grade nine? I don't[00:22:20] Angela: I don't have a clue. Why should I know that?[00:22:24] Jonathan: it seems unfair[00:22:26] Angela: I think I, I even think like at 17 or 18, when you're heading into university, even then, like the 30 year old Angela was dreaming of what I'm doing now, but it wasn't ever really sure if that's even like, and that was just a decade ago.[00:22:44] Jonathan: yeah. I think, I think my, I was fortunate in that I I understood what I wanted to do, maybe. Well, not, not specifically, but I understood the direction that I wanted to go in. And always, I mean, I always felt this desire to, to start a company or to start and start a business. Um, and eventually got there.[00:23:07] I had rose colored glasses though, when I was 18 or 19 thinking, thinking it would be a lot easier and a lot, like a lot more financially successful than I would that I am.[00:23:20]It's Mostly Luck[00:23:20] Um, but I think we both, and I think we both need to check that for a minute though, because you and I graduated, maybe you less. So just, it took a little bit longer to graduate from university. But when I graduated from university, it was, um, so it was 2002 and I was in Alberta. Everything the world was my freaking oyster.[00:23:43] Angela: I could, I could have got a job in five minutes there, anything, and, and, and now, so I look at, you know, the environment and the work environment that we graduated into versus these kids that better. I shouldn't call them kids. These young, young people are graduating into right now. And I'm, I, I can't even[00:24:04] Jonathan: So, yeah, I can't, I mean, yeah, like I did, I did school right when the tech crash happened and, um, it was a great time to be in school and, uh, a very, very fortunate time to have a job that was. I'm paying for it. Like, I, I came out of, came out of university with very little debt.[00:24:26] Angela: awesome.[00:24:28] Jonathan: like, yeah. And then, and then also managed to get, uh, get a job in public sector, um, which paid quite well.[00:24:35] Uh, yeah, as my first job, I, as my first job out of university, I, within three months was a manager of an IT department. I mean, I had, like, I had nobody to actually manage. It was just a title. I didn't have any, I didn't have any experience managing anyone, but they needed to put me in excluded staff.[00:24:55] Angela: This is what us as we, because we sit on the cusp of gen X and millennial. Um, wow. What an amazing time to be born.[00:25:04] Jonathan: Yeah. Yep. Super lucky. I think I it's, I've reflected on this a little bit and I mean, there's, there's a ton of luck that is unearned completely, you know? My dad introduces me to some folks and says, Hey, you should hire my son and go and do the, you know, go and hire it. Do a good job. Like I'm not, I'm not saying like I didn't deserve to work there, but I probably didn't deserve the introduction.[00:25:32] Um, I didn't earn that, but earned my keep once I got there. And then, and, but everything, everything up until up until now feels like it's just luck. Like, I've just, I've just been lucky. Right? Like meeting, meeting Steve at FreshGrade was pure luck. It it, you know, there wasn't there wasn't, I didn't go off looking for it.[00:25:53] I just happened to be in the right place at the right time and was doing, doing the right kind of thing. And he said, Hey, we should, we should chat. Uh, okay, sure. Let's let's chat. And then, um, you know, everything's, everything's like all the clients that we have is luck. It's just people, people show up and we happened to be there and.[00:26:14] It happens. I think the skill is maybe recognize not, not squandering that luck, not, not,[00:26:20] um, not letting that opportunity pass because I do see that happen a lot where people, people, people are in the right place at the right time. And, you know, I've taught with mentored these people and. And they just don't have the, they don't, they don't, they don't see it either.[00:26:34] They don't see the opportunity or they're missing some, some skill to actually, uh, be able to take advantage of that opportunity and then they miss it. And so I think that's some, one of the skills that I've managed to figure out is that I can recognize that luck is happening. Try to increase my surface area of luck and, uh, hopefully, um, hopefully turn that into, into[00:27:00] Angela: I like that. Um, I also love where we're at right now in the fact that we're now at the experience level and the age and the, um, just time in life where we can start handing the opportunities down like to, to others that are like, you know. When I take a look at, um, hiring Jackie was pure luck, I found Jackie by pure luck, that being said.[00:27:28] when I, you know, kind of got to meet her and understand, you know, where her passion was and, and her interests and things like that, I was like, Oh my gosh. Like if you got to come work for us, like, I can't afford somebody to be hired yet, but like, I gotta, I gotta find a way to get you on board. And just being able to give that.[00:27:47] You know, to be able to give her her first job out of university, what it felt so amazing. And, and those kinds of things, where we get to give the opportunity now to those that are exiting and graduating at a time, that is just crap. And now we're in the positions where we can give those, you know, um, help them out in, in some ways just feels.[00:28:11] So amazing.[00:28:12] Our Families are Our Best Fans!Alex and I were listening to Spotify. And I don't pay for the premium. and of course the ads pop up it was an ad for a podcast that was, that was being released on Spotify.[00:28:27] Comes running into my room and she's like, Mama, somebody else is releasing a podcast too. She's like you, I thought that was pretty cute.[00:28:43] Jonathan: Oh, she's so proud of her mom. That's so cool.[00:28:48] Angela: like, Aw, warms my heart. She was so excited for me

Show NotesPricing a new product is hard to do and requires that you step outside your comfort zone. We talk about freemium and why we don't want to build a free product. How we might figure out a good price. And the 4 Ps of marketing.Warning. We say "pee" and "poop".Fact CheckWe discuss the"P's of Marketing", despite both having an MBA we cannot remember which they are. The term we are discussing is Marketing Mix, which is the 4 P's of marketing: Product, Price, Place, and Promotion. Developed by E. Jerome McCarthy in the 1960's, and has been a staple of any University Marketing class.The term "Freemium" is used a lot in this episode, a good introductory read on the topic done by the Harvard Business Review. It is a concept introduced in the 1980's but gained popularity around 2010. Clinnect briefly considered this route with the product until we realized the product was too valuable with the minimum feature set to be a free product.In this episode we delve into definitions around patient referral intakes, such as central intake vs pooled referrals vs directories, etc. The Canadian Medical Association uses a policy statement to define the use, however it does not take into account the use of algorithms, which Clinnect has now introduced this into landscape.The pricing strategy exercise that we discuss at the end is the Van Westendorp Pricing Model. The exercise includes surveying potential customers to see where the "sweet spot" for pricing is, the questions are worded well to incite the right responses, yet you have the flexibility to tailor to your product. The final results are in as of the time this episode airs, but you will have to wait a couple episodes to find out!Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)Transcript[00:00:00] Jonathan: So I'm wearing, um, Hokas. I don't know if you're familiar with the brand of shoe.[00:00:05] Angela: Nope, but they look very nice Jonathan.[00:00:07] Jonathan: They have, they have these really thick, thick sole, I just don't wear them running very much. So they're just kind of sitting around and I thought, Oh, these shoes are good. Like they're good shoes.[00:00:17] Angela: are good podcasting shoes.[00:00:18] Jonathan: Yeah. So they're my podcasting shoes, I put them on before we record a podcast in case I need to stand. Hi, my name is Jonathan Bowers. I am the CEO of Two Story Robot, a software development company, helping Angela and CRS built a product. And my son just pooped in a potty for the first time.[00:00:37] Angela: That's amazing.[00:00:40] Jonathan: willingly. Well, so not willingly.[00:00:43] He. Just before bath uh bath time is like my routine with him. So we go in the tub and he's bathing and he's kind of squatting in the tub playing around and he's pooped in the tub, three or four times. And I try not to make a big deal out of it, but when I do, I often like just kind of yell and it scares them a bit. So I tried not to do that when he started to grunt, as he was squatting down in the toilet, like, Oh, okay, let's get out, do a quick, dry off.[00:01:10] And then we put him, put him on the potty and he sits there and plays with his toes and plays with the handle and and out comes, a poop.[00:01:17] Angela: And Jonathan, how old is Zack?[00:01:19] Jonathan: He's 17 months old now.[00:01:22]it's pretty fun.[00:01:22] Angela: so happy for you.[00:01:27] I am.[00:01:27]Hi, I'm Angela Hapke and I am the CEO of Central Referral Solutions. The company that has launched Clinnect and I cleaned poop out of my almost three year olds pants, five times in the last few days.[00:01:46] Jonathan: Oh my goodness. Is this a regression? Is this some kind of anxiety induced thing because of some change in school or is it[00:01:55] Angela: yeah, you don't, you don't know my daughter is pure, "I don't give an F. I am way too busy. Digging for worms and playing and in the sandbox to worry about the poop I've just had in my pants. " But then she's upset with herself afterwards. So we do have progress. The shame is there. Oh yeah. So we just want her to not feel that and just go poo on the potty[00:02:31] Jonathan: So tell me, tell me, uh, how can I, how can I segue[00:02:36] Angela: are we segueing from peeing[00:02:38] Jonathan: and pooing pants?[00:02:40] Into pricing. the three P's pee, poo, and pricing.[00:02:45] Angela: I'm very sure I learned that in my MBA.[00:02:47]Jonathan:  I think it's product, um, product pricing and position no, position pricing and p-p-p-p . So tell me about pricing. So you originally originally Clinnect, maybe not originally, but one of the ideas was that Clinnect was going to, there was going to be some free aspect of, of Clinnect[00:03:09]Pricing[00:03:09] Angela: Definitely! We were about, um, just over a year ago. We were discussing this. And at that time, the whole freemium idea was, um, I don't want to say it was hot because it was a little bit old by then, but it was definitely something that was well understood and well used in the, in the, in the tech industry was the whole freemium idea.[00:03:35] So we wanted to take that idea and shifted over to, um, healthcare software, which isn't really done except in more like the, the consumer, um, models.[00:03:46]Then I had a few conversations with a few people about this. And while, you know, we had floated it by the, the users, the future potential users and they were all for it. but I had like a conversation with a, a bit of a mentor of mine and he had very strong opinions about freemium products and, um, he kind of just said to me, Angela, Why would you ever give anything away for free?[00:04:13] Like, could you at least just charge 30 bucks a month for it? Why would you ever just give it away for free? I just think that model's so ridiculous. I kind of hit me a little hard because I was like, wow. Geez, everybody's doing it. That's what I thought we would do too. But it got me thinking in and about the users that I, that I have. And, um, it did make a lot of sense. I was like, yeah, honestly, to my customers, what is 20 bucks a month to them? You know, it's a few Starbucks coffees.[00:04:46] Jonathan: Well, and I think, I think also if they're not, if they don't see the value in it enough to give up the 20 bucks. Or 30 bucks or whatever it is, then either the value isn't enough or, you know, maybe it's, you know, maybe the customers are just not great customers[00:05:03] for us. and[00:05:04] we don't, you know, we don't want those.[00:05:06] We don't want the people that don't recognize that it's valuable.[00:05:09] Angela: exactly. Exactly. And, and it was. I don't want to say it was a bit insulting to our customer to give it away for free, and then just give them like the bare, bare, bare minimum. Um, but I felt like it kind of was because we do have a bit of a sophisticated customer. So, uh, so that's when I decided that I would launch with a free trial period.[00:05:37] And especially for our first users, because they're just there, they're our beta customers that were there working with us and figuring a lot of this out.[00:05:45] Jonathan: The value in that first, those first few customers is heavily slanted towards us and less so towards them[00:05:52] because we're[00:05:52] Angela: why, that's why the original groups are getting along free trial period with us. And then, um, that'll shorten as we get, uh, kind of just different tweaks and things smoothed out. so I figured when we launched, we would go with a, like a, a low cost model basic model first and then have premium, uh, features that we would add on for an additional premium price.[00:06:18] And so that's actually how I went out and sold it to groups is I said, I said to them, we're going to give you, , like six months a free. Free for you guys to use for six months. , and then, you know, right away through like, well, how much is it going to cost us when the free trial is over?[00:06:36] And I haven't never given, a stuck price on it. I haven't given a firm price on it at all. I've said it'll be anywhere between kind of that 10 to $25 a month, which nobody has batted an eye at. 10 to $25 a month for the basic product.[00:06:54][00:06:54] Jonathan: The market size for this at the moment doesn't appear to be super huge. So, you know, to have, uh, Even a hundred dollars a month as the base plan. That's not that doesn't, that doesn't make a very sustainable business.[00:07:08] Angela: No, I mean, it's one, it's one product and it's um, yeah, it's not going to make us millions and millions of dollars, I think that's when it gets interesting as to, yeah, it might, it might, it might anchor us to low. I'm willing to take that risk at this point right now, given, the forward momentum by a lot of companies to do the type of thing that we're doing.[00:07:37]Central Intake[00:07:37] Everybody's running towards central intakes, but not really knowing how to do them or how to create a sustainable model around them. What we're doing is central intake in a really easy to use fashion. Um, While others are trying to figure out how to be, how to do it, how to do a central intake and how to be sustainable.[00:08:01] Jonathan: Who were you talking about as the others? Like, do you mean like competitors or,[00:08:05] Angela: some competitors. So like some EMRs are looking at to creating what they call a central intake. But when you do a deep dive into what they're calling a central intake, it's not really a central intake and it certainly isn't a pooled referral.[00:08:21] Jonathan: Right. Yeah. what would be the differentiator between Clinnect and some of these other attempts at central intake? So you mentioned, you mentioned like, um, pooled referral. Yes. But like in what other ways are they not really central intake?[00:08:37] Angela: Okay, so let's back up and we'll talk about define these. So central, what is the central intake? It's one place for patient referrals to a particular specialty to go.[00:08:50]If you need to send your patient for a knee like a knee consult, you would send it to a central intake would be considered one fax number that all the ortho surgeons use to get all their, um, referrals in one spot. That's a central intake.[00:09:11] So that's handy-ish for a lot of groups. Who are just trying to track some wait time data, understand what the referral demand is, blah, blah, blah.[00:09:22] A pooled referral is typically paired with a central intake. So it's kind of like central intake's, like baseline and pooled referral's like the next step that you take. And that's where I, as a primary care provider want to send him my patient referral for a knee. I can send it in on typically a standardized form.[00:09:44] That has like a choose for me button or box that I check off where I don't have to choose the surgeon. I don't have to know all the surgeons in the region. And it goes into a pooled referral of which somebody assigns, um, a surgeon to that referral. So Clinnects differentiator, is it as both a central intake, a pooled referral.[00:10:11] But we do not rely on someone and their potential biases and things like that to assign it, or even just like kind of a picking like next, next, next. But we have a specific algorithm that runs in the background that can be, um, controlled by like tweaks of the dial to ensure that that referral goes to the right surgeon.[00:10:42] And has a way to balance or purposefully imbalance those referrals to each surgeon. The the other, the other one is the confirmation that the primary care provider receives. Some competitors or are starting to do that a little bit, that kind of that back and forth.[00:11:00] Um, but with ours, it's central intake, pooled referrals, and confirmations back. And then plus hopefully a whole set of other features in the future.[00:11:12]Jonathan: So the, on the topic of pricing though,[00:11:14] Angela: The basic plan includes the ability to send a referral to a specialist in a pooled way. So you have a choose for me option. So you don't have to know who's who So we're doing a Clinnect is sending referrals in, um, a far more secure way than we've seen in the past.[00:11:36] Um, certainly over fax machines, but even more so over some, um, the way that, uh, some competitors are using it. so it's a secure way to send a referral. You don't have to choose a specific surgeon and you receive a confirmation back with the surgeon's name or a specialist's name.[00:11:55]and then on the specialists end they have the ability actually, sorry, on both ends, you have the ability to historically track those referrals as to when it was sent, who it was sent to. And all that data is incredibly important when you're looking at wait times and things like that, because it captures that go date and that go time.[00:12:16] And then on the surgeon is, um, specialist's end you have a dashboard that shows you all your referrals that you have received. They're categorized their urgency coded. Um, and in our basic product, we are allowing the ability to re categorize and re urgency code or switch urgency codes on those referrals to ensure once again, because we have an algorithm running in the background that everything is copacetic on the, on, on the backend too.[00:12:52]Meaning if a a primary care provider sent through a whole bunch of hernias and only like two of them were hernias, they're going to initially get allocated as hernias in a balanced way. Um, but they weren't hernias. So when we recategorized, then it can, can change that.[00:13:10] Jonathan: And that I know, I know we try not to use the word triage, but is, is that what you would have considered triage, where they're coming in and, and you're sort of re categorizing things that were mistakenly categorized and, and adjusting the urgency.[00:13:27]It's not Triage[00:13:27] Angela: So , we are careful with using the word triage because triage assumes that there's been medical eyes on it. So meaning that the, the surgeon has taken a look at it, or the specialist has taken a look at it and actually done their categorization and their urgency. So we don't know for sure that that's being done so we don't call it triaging. We call it categorization.[00:13:46] Um, so the baseline product includes your, um, your login to our secure system that has dashboards with historical referral tracking an algorithm that runs in the background and ability to choose a surgeon or have the, the, um, system choose for you. And on the specialist end the ability to accept or reject that referral. So, that's huge because in the past, Uh, in kind of like old workflows is that acceptance or rejection of referrals was a long antiquated process of either getting something, on your computer or your fax machine.[00:14:29] And you're looking at it and you're like, Oh, this doesn't apply to us. We need to send it back and having a phone call and that re faxing and yada, yada, yada. So[00:14:39]Jonathan: So what's the plan for some of the things that we know will be in the premium? Cause I think, I think a lot of the premium features are yet to be discovered because people aren't using a system like this yet, which is exciting.[00:14:50] Right. We get to, we get to be at the front of this and see, you know, you know, moving to a more digital process. Um, A more secure process and a lot of, you know, a lot more efficient process. We get to understand what some of the, some of the new pains that, uh, MOAs and specialists will start to encounter and primary care providers.[00:15:10] But what are some of the things that we know are going to be part of that more premium[00:15:17] Premium Feature SetAngela: I think number one is, is, um, a communication method or a messaging system back and forth because of the, the reason that I just exp or the example that I just gave to you about, maybe you receive a referral. And it's inappropriate or it's missing pieces, or it's not a complete referral and you're, you're trying to put it together and you just need to do a quick message back to the primary care provider.[00:15:43] So instead of picking up the phone wasting, you know, maybe a few more minutes of your time interrupting the very busy person on the other end of the line, you can just send a quick message within the system back and forth. And, uh, potentially allowing attachments with that messaging system. We haven't talked about that as to whether that'll be included in this, in the next premium release or not, but doing something along that line.[00:16:12] Um, and then, so that's a big one. That's huge. That would be, um, I think something that people would find incredibly valuable[00:16:22]Jonathan: and at one point we were talking about the, pooled referral and being able to be deliberate in balancing or imbalancing, those referrals is that and giving the specialists the ability to tweak the dial, so to speak.[00:16:36]Angela: And that's the one that I'm waiting to hear feedback from the specialists on after using our product for a little bit is what does that exactly look like? So I can think of lots of examples where you'd want to tweak the dials. Um, I'm going to go off on mat leave. I am, slowing down my practice. I'm on the verge of retirement. we have, we have a specialist right now that goes away for a few months, um, per year on, he does like doctors without borders for.[00:17:07] I think it's three months, every year. And so he wants to turn off all urgents and then turn them back on. Um, there's just a whole bunch of examples. And then, and then once we get into being able to tweak the dials, then we get into some interesting conversations around wait times and how groups can work together.[00:17:30] To start balancing their wait times based on the categories that they've already defined. And those referrals are already coming in at. So they have that tracked data and they know their demand for each category of referrals and starting to get some balance around wait times they can't do that right now because number one, it's, um, referrals don't come in categorized. When a referral comes into a specialist office, it's not given a category,[00:18:00]Jonathan: the category comes in with the referral. That's something that the primary care provider needs to specify[00:18:06] Angela: correct. There would be, um, a reason for referral.[00:18:13]So a lot of EMRs, would kind of autofill a, um, an initial diagnosis for them. But EMRs, are different. Doctors are different and sometimes you wouldn't put the same wording in as your counterpart.[00:18:31]And so it's kind of all over the map. It helps the specialists because they, they understand it, they see it and they go, Oh, okay. Then, you know, that looks like it's urgent, we should get them in right away. Or, ah, you know, I think that's a bit of something that could wait a few weeks and, and whatnot, but there was no standardized categories for referrals.[00:18:52] This is, what's what we're starting.[00:18:55] Jonathan: So we've got a standardized list that the primary care provider picks from, but it's still, it's still on them to make that initial categorization, which they could get wrong.[00:19:04] Angela: Oh yeah. That's why this is why it's important for us to have the feature in for the specialist to re category something, categorize something. So something comes in. this, um, kind of all encompassing category that because they're not really a hundred percent sure. So they're going to put it as, you know, abdominal pain. Um, whereas, you know, specialist's going to look at it and be able to even quickly look at what's happening in the history and go, Oh, that's, we're specifically this, um, which is important because then that helps define their journey and.[00:19:42] You know, helps us get better with, predictions and wait times down the road. it's actually something that I kind of, I guess, now that you've, you've brought it to light, I kind of took it for granted that we were doing this referral categorization.[00:19:57] Jonathan: I just assumed that was happening. Like the way, the way we built it, I assumed that was just mimicking an existing practice,[00:20:04] Angela: No. The first beta users that we have coming on from specialty groups are building their own.[00:20:11]There are Two Customer Groups[00:20:11]Jonathan:  Um, I want to, so one of the things that we've talked about, which I think might be important to highlight is, is we have two customer groups on, in this product. And so there's the, there's the specialists where that premium feature set makes sense for right. We're charging the specialists to have access to these features.[00:20:33] there's another user. There's the primary care providers who are primarily sending, sending referrals to the specialists. How does it work for them?[00:20:42]do they pay for it?[00:20:43] Angela: Yup. Um, and this is why I've been wavering on what the price is and that's kind of why I've given it a range. Is it, may, it may happen. Likely happened that the primary care providers are a different cost than the specialist. So if you look at it from a primary care provider perspective, they get great value right off the get go.[00:21:09] They don't have to know all the surgeons in town and who's who they just have that choose for me option. They know that their, their patient referrals getting through it's confirmed. Yay. It's kind of done after that. From a referral perspective, which is the piece that we're focused on. Specialists get a little bit longer term value from that, the ability to look back at the historical, um, the algorithm that we talked extensively about, the category, the urgency, the, just the ability to almost wait list manager referral , is a longer term value. So there might be a higher cost for the, uh, specialists versus the primary care providers. We'll see. I haven't figured that out yet.[00:22:00]Jonathan: Yeah, it will be. I'm excited to, I'm excited to gather some feedback from both sides of that from both sides of that exchange. And just see, you know, see how valuable it is to have that list just there. So you don't have to think about it or look it up. Yeah. I'm hoping that there's some value in it being easier as well.[00:22:25] And it's not, I mean, I think sending a fax is probably pretty easy[00:22:29]and the confirmation, the confirmation is, that feels like an obvious value,[00:22:33] Angela: Exactly. The way that fax machines work typically with EMR right now is a lot of it is e-faxing. So there isn't a ton of, you know, the physical paper paper shuffling around and it is, they have you EMRs have made it very easy to fax it. Let's really just kind of hit the fax button.[00:22:54]I think, and that's why from a primary care provider perspective, it is very patient centric because yes, it's maybe easy to send to the general surgeon that you send to every single time, every single patient and hope that they do all the things that you're sending them, because you don't, you have built a relationship with them and you don't really know who else is in town.[00:23:18]But that could mean a very long wait list. Whereas this takes away all that guessing[00:23:26] and all that, um, kind of pigeonholing and, and things that have happened in the past around that. So it is very patient centric from the primary care provider perspective. Uh, the confirmation back is huge because then that's like time not wasted. In the future so that there is, there is the value proposition there for them.[00:23:50] Jonathan: We talked a lot about pricing.[00:23:51] Angela: we talked a lot about pricing.[00:23:53]Jonathan:  I'm excited that you have decided to not do a freemium model.[00:23:58] Uh, I just, I think it's, I think your mentor friend is correct.[00:24:04] Is it Steve? Okay. I think this is more valuable than to just give it away. We can give other stuff away. We can give away the podcast we can give away, you know, things that, that are valuable, but the day to day value that you would get out of using the software is significant.[00:24:25] And so that. You know why we need to be able to keep the lights on . We need to be able to be motivated, to continue to provide that value and to innovate on innovate even more on the value that's being provided.[00:24:41] If it's free, then what's the reason like. What's the reason to keep it's just a cost. Like it's not, it's not, it's maybe free to them, but it's not free to us.[00:24:48] Angela: Exactly. What's the motivation for us to make it better.[00:24:51] Jonathan: Yeah. It's just costing time and money or time and resources to continue. Mmm. To continue supporting free users. So I'm, I'm excited by that. I think, I think that's a much more sustainable way of building a business. I mean, there's, I think, I think one of the, one of the interesting things to come out of COVID is a bit of a rejection of that old way of doing things, which is growth at all costs[00:25:19] Angela: Oh, are we seeing that? Isn't that interesting? The shift in forget about unicorns[00:25:27] Jonathan: yeah,[00:25:28] Angela: enough. Yeah.[00:25:31][00:25:31] And so then when we did finally launch and I was doing, you know, demos, one of the first thing people ask is how much is it going to be? And to be honest, we haven't priced it yet. So come up with a guesstimate at the moment. Not that I hadn't thought about it before, because they certainly had, but I hadn't come up with anything firm.[00:25:56] Pricing ExerciseJonathan: So there's this, there's this pricing exercise that I really like[00:26:00] Angela: I don't think I like anything with a word exercise in it, but[00:26:03] Jonathan: it's not an exercise, it's just like a method.[00:26:06] Angela: You're just rebranding it.[00:26:09]Jonathan: I don't know how to pronounce this person's name, Van Westendorp's price sensitivity meter.[00:26:15] And it's it's, um, four questions that you can ask that kind of help you gauge what the price might be. So you ask at what price would you consider the product to be so expensive that you would not consider buying it? So that's the, that's the high side. That's too expensive. At what price would you consider the product to be so low that you would feel the quality could not be very good. So that's the too cheap price. and then at what price would you consider the product starting to get expensive so that it's not out of the question, but you'd have to give it some thought before buying it.[00:26:54] And that's the, uh, on the expensive for the high side. And then at what price would you consider to be the product, to be a bargain, a great buy for the money? And that's the, the sort of cheaper or the good, the good value, the good value side. And I think if you ask those questions and we've done it, we've done it on a couple of, uh, on a couple of projects and have been surprised by the results in a good way.[00:27:17] Like surprised that the, the pricing that we had maybe come up with in our minds was a little low.[00:27:25]Angela: should I try it? Should I like try a few customers and then report back?[00:27:30] Jonathan: I would love to hear that[00:27:31] Angela: okay. I'll report back.[00:27:34]3 Ps Jonathan: wait, just wait. I'm going to look up the three Ps. Is it three Ps,[00:27:38]Angela: I'm going to go product placement and price.[00:27:40] Jonathan: you think product placement and price?[00:27:41] I think. I don't know. Uh, it is, uh, product place, price and promotion. There's four Ps. So the four Ps pee and poo was not one of the four Ps of marketing, so, Oh, MBA.[00:28:00] Sorry.

Show NotesIn the intro Jonathan discusses the fall detection used in his Apple watch, if you are interested in learning more about this feature or how to turn it on then check out this link:https://support.apple.com/en-ca/guide/watch/apd34c409704/watchosSince recording this episode Angela has actually achieved the 10,000 step mark many times according to her Suunto 3 watch. She is still trying to get evening walks in.Fact CheckSurprisingly Angela does not spew random statistics this episode, so there was not much to fact check.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)Transcript[00:00:00] Angela: This is fun.[00:00:03] Jonathan: That's how you that's. I think that's, um, like journalist broadcaster thing. Like you just put your face right in the mic and just click your tongue.[00:00:14] Angela: You have no idea.[00:00:16]Jonathan: I honestly have no idea.[00:00:17] Angela: Yeah, I know. You can tell[00:00:20]Introduction[00:00:20]Jonathan: Hi, I'm Jonathan Bowers. I am a software developer and uh, Oh, I, uh, I fell down the stairs.[00:00:28]I had Zach in my hand and it scared me[00:00:30] Angela: He's okay?[00:00:31] Jonathan: He's okay. Everyone's okay. I have a little bit of rug burn on my, uh, on my elbow, but I'm fine. Just a little bit of a bruised ego. And I don't understand how I've slipped down the stairs. Like I'm pretty cautious, not cautious, but like I don't, I don't fall down the stairs ever.[00:00:46] Like the first time I've done that.[00:00:48] Angela: That's why it's called an accident.[00:00:50] Jonathan: Yeah, I guess. So anyways, I was impressed with the Apple Watch's ability to detect the fall and it suggested that I call 911[00:00:57] Angela: I love that. why don't we have Apple watches on all our old people?[00:01:01] Jonathan: I don't know.[00:01:02] Super cool.[00:01:03] Angela: That is cool.[00:01:05]So my name is Angela Hapke, and I am the CEO of Central Referral Solutions and speaking about smartwatches, I got Suunto Watch for Mother's Day and I am yet to hit 10,000 steps a day[00:01:24]You have to go for walks in the evening. You have to deliberately go and get steps.[00:01:29] Jonathan, I do. I go for freaking walks in the evening. It just, it adds about like three or 4,000 steps, but I'm just still not getting enough.[00:01:44]Jonathan:  I had one day when I was legitimately less than 500 steps for the entire day. I think I was sick.[00:01:53] Angela: I was going to say, were you in bed all day?[00:01:55] Jonathan: I was in bed all day.[00:01:56] Angela: Yeah. That's why he was sick.[00:01:59] Jonathan: I thought, for sure, just casual, like just ambient walking. I would have picked up some extras more than 500 steps, but Nope.[00:02:08] Angela: that's. That's amazing.[00:02:11] Jonathan: Ambient walking.[00:02:12] Angela: Ambient walking.[00:02:14]Clinnect is launched[00:02:14] Jonathan: Okay so we've launched Clinnect uh how do you spell how do you spell that how do you spell Clinnect ?[00:02:21] Angela: C L I nope[00:02:25] Jonathan: That's right.[00:02:26] Angela: it is sorry. I'm like my brain somewhere else. And I thought, uh,[00:02:31] C L I N N E C T[00:02:35] Jonathan: Clinnect it's like clinic and connect smushed together.[00:02:39] Angela: You got it.[00:02:40]We launched it last week.[00:02:43] Jonathan: Not a full launch, a soft launch.[00:02:46] Angela: Sure a product like ours, I'm not sure launches largely easily. It's it is more of a, it is more of an iterative launch. So we just, we brought on her first umm users on Friday so many, many years ago, I I've, I've dreamed about this.[00:03:09] Like I have dreamed about this for many years. I've dreamt about being the CEO of a startup, launching a product. And when I dreamed about this, the images that were in my mind were. We, you know, we would, I would be in an office with a team and there would be high fives that day champagne, and we would be celebrating.[00:03:40] And I launched on Friday sitting alone in my basement.[00:03:49] And there was nobody, but we need high five because way too early in the day to drink shopping by myself. So,[00:04:00] Jonathan: That sounds like that makes me sad.[00:04:04] Angela: but it's actually, so. It didn't make me sad because at the end of the day is still like, the dream is still there. Like the idea, we still did something incredible and amazing, but I think it's also indicative of many things I've been reflecting on recently. Around this, this dream and what I thought that it looked like 10 years ago and what it actually looks like in reality now is I always thought I would have time to lean into these amazing pieces of the business, uh, and take my time and be thoughtful and meaningful around all these decisions and put effort and just all this additional time.[00:04:54] Leading up to the launch. I had my kids home 24 seven. There was no additional extra time or energy because I was exhausted to lean into these things. Like I was sure I was going to have this beautiful marketing website up to showcase the product and launch it. And I thought, Oh, I'm going to be so meaningful.[00:05:20] And the people that I reach out to and talk about this with, and it just, there was, there's just no time. And, and COVID like, talk about a time to launch a product. This is crazy. And so all those things. And so as soon as I let go of that ridiculous dream that I had 10 years ago and went well, that was nice.[00:05:42] That was cute. That you had that dream and that was a fun thing to focus on and it allowed you to get here. Reality looks very different and that's okay because at the end of the day, we're still doing what we said that we would do. And it's still important.[00:05:57]What does Clinnect Actually Do?[00:05:57]Jonathan: What's the thing that we're doing. What does Clinnect do? It's in healthcare, but what is ultimately boil it down to a couple of sentences or a short paragraph? What is Clinnect?[00:06:12]Angela:  Clinnect was built out of a need for patient referrals from your family doctor through to a specialist to be tracked and confirmed in a way that they hadn't been before.[00:06:31] Because far too often, we rely on fax machines to do those referrals, sending and receiving. And we figured that we could create, uh, an easy, simple solution that was far more secure that allowed, um, that patient referral to be sent to the most appropriate provider. Oh, while in the background building meaningful data for your community and in demand around a specific specialties and things like that. But at it's very bare bones. It is a very simple, easy way to send a referral from a primary care provider through to a specialist for patients needing to see any type of specialist that is not sent through a fax machine.[00:07:31] Jonathan: And so how so? How has the lunch gone? So it's, it's a soft, I wouldn't even say it's a soft launch. It's a private launch.[00:07:39] Angela: Yeah, actually, that's a good way of putting it because we only allowed the users on that we wanted to start with.[00:07:46] Jonathan: But we did launch like we did, we do have, we do have users in they're using, are they using the software or have they just created accounts?[00:07:56] Angela: They've just created accounts and are taking a poke around right now. Today, I'm connecting with, uh, the first person that will be creating referrals to be sent through and received. So that's exciting.[00:08:11] Jonathan: That is exciting. And how has it gone? so? It wasn't as, uh, as exciting or as, high fives and Champaign, as you might've thought we didn't have a, we didn't have a chocolate fountain.[00:08:22] Angela: I can do those are so weird and gross.[00:08:26] Jonathan: Especially now, could you imagine having a chocolate fountain.[00:08:29] Angela: Everybody there would be caution tape around it now.[00:08:33] Because it was a private launch, it went, it went pretty good. We were able to handle the users. There was a couple of bugs that came up, but we were able to, and your team was able to address them pretty quickly. We did have a couple, uh, things happen that we thought. Well, that probably won't happen. And we kind of pushed in design and development till later that we've now had to say, Oh, wait a minute.[00:09:00] We got to put a priority around that, which has been, which was just kind of humbling in the hilarious,[00:09:07] Jonathan: It's always, it always goes that way. We plan for the things we think, okay, these are the errors that users are going to encounter. Like, these are the kinds of things that users are gonna stumble on. So we need to fix those things and then they never do. But then the things that we think, Oh, no, one's going to do this, and if they do, there's only 10 users so far, so it's not going to be that bad. But then the first user, the first time hits the one thing or the two things that we deliberately pushed to the bottom of the pile.[00:09:33]Launching with a Few Small Bugs[00:09:33] Angela: That's exactly what happened. It was our first user and she, she, she, uh, yeah, she did something that we were like, it probably won't happen. Oops. It did.[00:09:45] We can, I mean, we can talk about what that was like. We.[00:09:48] can we,[00:09:49] okay.[00:09:49] Jonathan: sure. I mean, there's nothing as long as we're not disclosing who it is. I think that's[00:09:53] Angela: so our first user, we thought, well, they won't go into the same web page and register themselves more than once. So, and correct, correct my language around this, Jonathan, but, uh, what we, what we did, what we didn't do was like a system check to see if that user already exists in the system, because we just thought they would go in once register once and then, and then just log in after that was the very first use that we got on registered herself four[00:10:24] Jonathan: Oh, I know. And it's an easy, it's such an easy thing. It's such an easy thing to fix. I don't even sure why we didn't fix it to be honest.[00:10:33] Angela: Well, isn't that the hilarious part is, yeah. Like as soon as I talked to your team about it, they were like, Oh, okay. So let's just fix that. And then it was fixed right away. But our poor first user was like, I don't see everything that I'm supposed to be seeing. And I'm like, huh, well, let's take a look into that.[00:10:51] And then we discovered it was like, well, she's actually registered four times.[00:10:54] Yeah, so that was kind of a funny one. And then we, and then, yeah, we had some funny things around, um, case sensitivity for emails and which is one of those things that we probably should have.[00:11:07] Jonathan: Yup. Yup. Often all things that should have been done, because they're really easy to do.[00:11:14] Angela: Yeah. Yeah. So.[00:11:16] Jonathan: But, it's, it's a little bit of, uh, of competing priorities. Like there's, there's so much other things to do that are just so important, right? Like we need to have encryption working. We need to have all of these features that the people need to be able to use.[00:11:32] Um, and so. These things are up there. Easy. We can just do that last minute, but then we never get to them and they creep their way in. And then we think, okay, well we didn't fix those things. It's live. No one's going to hit those. We'll fix them in a bit. Um, but[00:11:47] Angela: they did my first users, the, Oh well, and I think, and I am not sure how to, how to say this, but Clinnect is an easy platform to use. What we've created is a digital health application that is so easily, integrated into their, their systems.[00:12:11] Like you literally take two minutes to sign up, whereas like most doctor's offices in MOAs are used to software that takes like massive, like many days to onboard. Like, so for example, like your, your EMR or your emergency, your electronic medical records, there's a team that comes out.[00:12:34] Jonathan: Oh, wow.[00:12:35] Angela: I mean, okay. Maybe, maybe just one person, but there's a person that comes out that is like an implementation specialist usually.[00:12:43] And they will onboard your office, like in person. And they'll be there testing things for usually like a day or two.[00:12:52] Jonathan: Oh, wow.[00:12:53] Angela: Yeah. And I mean, EMR is, are big and heavy and, um, but any kind of software that I think about that, you know, a doctor's office uses is typically pretty robust with a complicated ish sign-on process or registration process.[00:13:16] So it's a lot more handholding Clinnect is like, I sent you a link you signed on in two minutes and then you can send a referral. Like it's that simple. And because it's that simple, I think we were just like, well, it's that simple? what I love about clinic is, um, I'm able to say because literally just two minutes to sign on and you can send a referral it's that easy. And that is a very cool value that we offer.[00:13:50] Jonathan: It's the, the, the value is that it takes two minutes to sign off.[00:13:56]Angela: No, it's, it's a, what is it? A lack of barrier, I guess.[00:14:03] Jonathan: so, okay. So we've launched, we've launched, we've had a few users sign up, um, some, some, uh, a few, a few bumps, a few stumbling blocks. and then soon I think today, some of the users are going to start. You're going to walk a user through sending, sending the first referral[00:14:22] Angela: Yeah. I'm hoping it's today, if not tomorrow. Yeah. Yeah. It's exciting. I think,[00:14:30]Jonathan: Why is it exciting? I mean, I get, I get why it's exciting for you,[00:14:33] Angela: yeah,[00:14:34] Jonathan: it's, it's, it's the dream realized, right? There's no champagne, there's no fountain of chocolate, but there's still, there's still software that's out there that a real human customer is using. There is, is going to use today. Um, why is that exciting beyond, beyond just the fact that that, you know, exists.[00:14:57] Angela: So if I take off my founder hat and I put on my like Joe public hat, is that what you[00:15:01]Digital Health is Pretty Boring[00:15:01] Jonathan: I guess, so, I mean, why, like, I mean, there's, there's all sorts of reasons why you got into this and wanted to build this. Um, and it's. It's not finished, but, but something is built and that's exciting for sure. That's, that's always exciting when it's full of anxiety of, you know, things going wrong and things have gone wrong, uh, small bumps, but, but it works, um, it's out there.[00:15:25] So, but what's the, like, what's the, what's the exciting bit now? What are you excited about now? And maybe this is from the point of view of the public.[00:15:34][00:15:34] Angela: It's so hard to answer. I think because healthcare isn't, especially digital health stuff really isn't that exciting.[00:15:46] Um, typically healthcare, digital health applications, aren't super exciting. They're not really sexy stuff that comes out and it's not, like rock your world stuff. It's usually fixing something, a systemic issue that we've had for a long time in a really obvious way. And I think that's what this is. The fact that, you know, as a, as a patient, I would go into my doctor and have a, have a referral faxed over to my specialist's office and never hear back as to where I was on a wait list if they ever received it.[00:16:26] Or if, if, if, if all of these variables Mmm we're fixing all of those, it seems obvious. And I've had this interaction with people. When I tell them about connecting what we're doing, the reaction I get almost all the time is, well, why doesn't this exist yet? So maybe it's not that exciting for the general public.[00:16:54] And rather it is more well about time[00:16:59] Cause I'm not sure that I could. I am not sure. I could go out and explain to people what Clinnect is and they'd be like, yes, that is so exciting. It is not exciting for people. It is more of a statement of, well, that just makes a lot of sense. Why the hell haven't we been doing this for a really long time?[00:17:19]Jonathan: It's a strange, um, that's a strange feeling. I experienced that every now and again, where I think back, like, how do I, how do I excite, um, 16 year old me about the kinds of things that I do now. And I don't, I'm not sure that I could, like, I'm not sure that I could say, Oh, you're going to be spending hours.[00:17:37] Um, leading a team that is building software to replace fax machines and it's going to be so awesome. 16 year old me is that sounds so[00:17:49] Angela: So boring.[00:17:50] Jonathan: boring, but it's, it is exciting because, every day, people are doing, you know, doing their job, trying to go about their day, get, get the things that they need to get done, done, and are stuck using whatever antiquated system or antiquated piece of software that they've inherited through, you know, whatever chain of decision making that led to that. And they're stuck with it and they're just trying to do the best they can. And I'm excited that, even if there's a little bit of joy, even if it's just once, even if it's just, Oh, this is, nice. And then that's it. But now, now they just go about their job.[00:18:29] Um, much, much more efficiently being able to focus on the things that matter. Um, you know, not spending their time sorting piles of paper.[00:18:39] Angela: The way that I describe it sometimes too, which some helps people a little bit. And let's be very clear that some of these features do not exist yet in Clinnect, but they are in the pipeline. Um, imagine going to your family physician with an issue he or she says, I think you need to see a specialist. And upon walking out of that office, you receive a text or an email that says.[00:19:07] Your referral to specialist so, and so has been received. The estimated waiting time is four weeks. We will be in touch with you. Um, and just, just that, just that simple, at least I know I am being taken care of because right now, when we walk out of our physician's offices with our kids that have just been referred to a specialist, We have no idea if that referral was ever received or not.[00:19:41] And I know a lot of people are terrified to pick up the phone to find out for fear of bothering someone or maybe being put at the bottom of an arbitrary list for bothering someone. Um, but this is like real time trackable referrals. Which yes, we maybe should have been doing for a long time, but haven't, so now, now it's time to, uh, but that's usually when people go, Oh, that would be really cool.[00:20:10] So maybe, so maybe if we could just insight that little bit of joy once in a while, where you literally get the text that says, Hey, and maybe even further to that, it's now been accepted by specialists. So, and so here it, you know, or even better click here to book an appointment, Things like that. Like, this is not, this is not undoable.[00:20:35] This is totally doable. I guess what I'm saying.[00:20:38] Jonathan: and it's not, um, it's not rocket surgery.[00:20:42]Angela: It's not, it really isn't, but we've been very complacent with, um, the lack of technology and in the healthcare space for a very long time. And that's what that's. I mean, I go back to why I'm excited about this is at the end of the day, we are, we are providing a service that didn't, it didn't exist in this way before I finally get to make an impact for far too long when I was in the system, um, I would be.[00:21:21] You know, writing, writing decision briefs, um, that were really exciting ideas and projects, and that would just get shelved for years. And there was no sense of change. There was no sense of making that impact. I finally decided that I couldn't sit around and do that anymore.[00:21:45] And when a group of surgeons came to me and said, we have this really cool idea, I saw a much bigger application for it. Whereas they were just like, this is how it all started. General surgeons and Kamloops just, just wanted one place where all their referrals could come into and they could pull it. This is how this all started.[00:22:06] That's all they wanted. Could you help us do that? Yeah, I can definitely help you do that. And my guess is you're not the only ones that need that.[00:22:13]What is Coming Next with Clinnect?[00:22:13]Jonathan:  What are the next steps? Like, what are we, what are we working on next? So you're going to get some referrals happening. What else is happening?[00:22:19] Angela: So we're going to test the system for referrals just to make sure that everything works. Um, and then we start onboarding, referring providers. So meaning your, primary care providers that refer patients through, that's going to be, that's going to be a, Oh, that's a long process. Um, but we're gonna focus on, um, kind of blasting to them that we're up for functional.[00:22:48] We're going, please sign up once again. Low barrier to use two minute sign up and you can send your first referral. That's the exciting part. And then we have other specialty groups that are interested in joining two already, which is awesome. So I'm actually thinking we might even have to queue them, which I.[00:23:12] Never thought that we were actually going to have to have a queue. I always thought we would be like going to them and saying, okay, I think you guys need to get on and then like trying to sell it. But I think we already have . Enough that are interested and it's just, it's the snowball effect. As soon as you get a few on, then everybody sees, how about hopefully how well it's working and we've designed it to scale.[00:23:35]Because this is based off of a workflow that we've been doing with general surgery. That was not scalable. So we learned, I think we've learned a ton there. And so that's exciting to see.[00:23:50]Growing the Waitlist[00:23:50]Jonathan:  I'm looking forward to seeing that waitlist grow[00:23:52] Angela: be careful about calling it a weightless grow because we're in surgery.[00:23:55] Jonathan: Oh, right. Yeah, no, we don't want our waitlist to grow. we have this really long wait list to get into our software, but it, the goal of our software is to[00:24:03] Angela: Does it reduce the wait list?[00:24:05]Jonathan:  Can, can Clinnect Clinnect itself?[00:24:08] Can we use Clinnect to manage our own wait list?[00:24:12] Angela: Oh, no maybe. In a way that's the way it works though.[00:24:21] Jonathan: So, okay. Yeah. So our wait list is growing. Your wait-lists are shrinking.

In this excerpt from the 13th Chapter of the Bhagavad Gita, in the Light of Kashmir Shaivism Swami Lakshmanjoo explains what is puruṣa and what is prakṛti and what are these guṇas by which we are played by. (In Kashmir Shaivism prakṛti and puruṣa are very different from their meaning in Vedanta.) Swamiji says, "Anyone who fortunately understands what is puruṣa and what is prakṛti and what are these guṇas by which I was kicked by, played by prakṛti, sarvathā, if he knows, if he comes to this understanding, then he remains away, he remains aloof from prakṛti. He does not allow prakṛti to touch him!" ~Swami Lakshmanjoo     https://www.lakshmanjooacademy.org/wp/wp-content/uploads/PurushaPrakriti.mp3   पुरुषः प्रकृतिस्थो हि भुङ्क्ते प्रकृतिजान्गुणान्  । कारणं गुणसङ्गोऽस्य सदसद्योनिजन्मसु  ॥२२॥ puruṣaḥ prakṛtistho hi bhuṅkte prakṛtijānguṇān  / kāraṇaṁ guṇasaṅgo’sya sadasadyonijanmasu  // 22// Puruṣa, actually puruṣa is dependent on prakṛti, and bhuṅkte prakṛti jānguṇān, he enjoys the three guṇas (three guṇas means just that worldly creation*) and he just goes on enjoying the worldly creation. Sometimes with sattva guṇa, sometimes with raja guṇa, and sometimes [with tama guṇa], and he is sometimes happy, sometimes painful, sometimes . . . DENISE: Unconscious. SWAMIJI: . . . unconscious. Sukha, duḥkha, and moha, these are the three guṇas: sukha is from sāttvic, duḥkha is from rajas, moha is from tamas. Moha means, “zzzzzz [snoring].” This is moha. Duḥkha is activity, e.g., going to the cinema, going to play ball, baseball, whatever ball he plays, that is rajas. And sukha is sāttvic, e.g., when he is seated and prays to God, at that time it is sāttvic. And as long as puruṣa is attached to the guṇas, the three guṇas, it conducts for him sadasad yoni janmasu, aneke (aneke means numberless births and deaths), numberless births and deaths are produced for him because he deserves that. And he never gets away from this, this grabbing [i.e., attachment by which] he is caught.408 Upadraṣṭānumantāca, and in the long run, there is another being, that is Parabhairava . . .   उपद्रष्टानुमन्ता च भर्ता भोक्ता महेश्वरः  । परमात्मेति चाप्युक्तो देहेऽस्मिन्पुरुषः परः  ॥२३॥ upadraṣṭānumantā ca bhartā bhoktā maheśvaraḥ  / paramātmeti cāpyukto dehe’sminpuruṣaḥ paraḥ  // 23// Upadraṣṭā, [the one] who is witnessing, what is going on, what is this damn thing going on, [i.e. happening] to puruṣa, and he is tossed [around] with prakṛti, upadraṣṭā, He sees, He observes, He witnesses, anumantā ca, and He thinks how far he [puruṣa] is entangled by prakṛti, and He is Himself Maheśvara, Parabhairava, paramātma. Paramātma means supreme being. Deha asmin puruṣaḥ, and He is also existing in deha (body) and observing what is happening to that [puruṣa]. Both are [there]; one is above that and one is entangled in prakṛti. Now, there are some, a few, who are, who have been graced by the śaktipāta of Parabhairava.   य एवं वेत्ति पुरुषं प्रकृतिं च गुणैः सह  । सर्वथा वर्तमानोऽपि न स भूयोऽभिजायते  ॥१४॥ ya evaṁ vetti puruṣaṁ prakṛtiṁ ca guṇaiḥ saha  / sarvathā vartamāno’pi na sa bhūyo’bhijāyate  // 24// Anyone who fortunately understands what is puruṣa and what is prakṛti and what are these guṇas by which I was kicked by, played by prakṛti, sarvathā, if he knows, if he comes to this understanding, then he remains away, he remains aloof from prakṛti. He does not allow prakṛti to touch him! Sarvathā vartamāno’pi na sa bhūyo’bhijāyate, he is established in the state of Parabhairava and he is mukta. JONATHAN: So he can only become aware of that in samādhi though? SWAMIJI: Yes. So there are such people . . . it is not meant that only by/in samādhi they will understand Him. Next... _________________________ *"The guṇas are the agitated formation of prakṛti." Swami Lakshmanjoo, Tantrāloka 9:230, USF archive. 408.  “Kāraṇaṁ guṇa saṇgo’sya, the cause of enjoyment, enjoying the three dishes [i.e.,

Show NotesOur first full episode of "Fixing Faxes".There is a backlog of surgeries due to COVID-19, how is Canada going to deal with those. How do referrals work in the first place and how will Clinnect help? Do we need faxes?Fact ChecksIn the opening Angela mentions being at home with her children for 73 days, that was incorrect it was actually 74 days according to her calendar.Here is the CMAJ article that Angela refers to.The "large" number Angela refers to is around 100,000 surgeries across Canada canceled or postponed due to COVID as of April 25, 2020.To really hit home on the fact that our reliance on fax machines in Canadian healthcare is antiquated and not secure; here is an opinion piece published by the College of Physicians and Surgeons of Alberta that we could not stop saying "exactly" throughout. The physician, Dr. Sandy J. Murray (twitter: @Diver_Doc) also talks about the theatrics of Canadian healthcare and how we pride ourselves on innovation yet rely on a foundation of fax machines. We think Dr. Sandy J. Murray needs to take a look at Clinnect ;) and we agree: "Axe the fax. Let's make this change together."Resources on the issues of patient referrals:https://policybase.cma.ca/documents/policypdf/PD15-01.pdfhttps://www.aafp.org/news/practice-professional-issues/20180130ehrreferrals.htmlhttp://www.ihi.org/resources/Pages/Publications/Closing-the-Loop-A-Guide-to-Safer-Ambulatory-Referrals.aspxThere is a lot of information for physicians and care providers to sift through when managing referrals, at Clinnect we believe that physicians and care providers should do what they do best and we make it easy for them to follow best practices and policy by ingraining it into the product. Simple. Central. Secure.Find Us OnlineAngela Hapke - @angelahapke - https://www.clinnect.caJonathan Bowers - @thejonotron - https://www.twostoryrobot.comCreditsProduced and Hosted by Jonathan Bowers and Angela HapkeMusic by Andrew Codeman (CC BY 3.0)TranscriptAngela:  Can I say the f word on.[00:00:02]Jonathan: You can, but then we have to beep it out or we get flagged as explicit in Apple.[00:00:06] Angela: Yes. Can we go for the explicit in Apple flag?[00:00:10] Jonathan: This is an explicit podcast, not for children. I think. I don't know how it works. I have to, I have to explore that a little bit. I've just, I'm just figuring out the recording and production piece. Uh,[00:00:21] Angela: I love it.[00:00:22]Introduction[00:00:22]Jonathan: Hi, I'm Jonathan Bowers. I am a software entrepreneur from Kamloops, and I haven't slept much this week because Zach is experiencing a sleep regression.[00:00:40]Angela:  Hi. I'm Agela Hapke. I am the CEO of Clinnect a digital health startup in Kamloops, and I sent my children to daycare for the first time in 73 days.[00:00:56] Jonathan: Oh my goodness.[00:00:57]How do you feel about that?[00:01:02] Angela: Um, Jonathan, I have never felt like deeply felt bitter sweet like this week.[00:01:12] I have spent 73 days seeing them every single day,[00:01:19]kissing their smushy little faces,[00:01:22]watching them grow, and I have to now give them away for eight hours a day again.[00:01:27]Jonathan: Wow.[00:01:28]Angela: And on the other hand, mama gets to do, whatever mom wants to do for eight hours a day again.[00:01:38] Jonathan: That's so exciting. I'm so jealous and so scared for you at the same time.[00:01:42] Angela: That's, this is what I mean by bittersweet. I've never felt the deep visceralness of bittersweet in my life before.[00:01:49]The Backlog of Surgeries[00:01:49]Jonathan:  well, this is a podcast about healthcare and healthcare technology. So let's, let's talk about, uh, what's going on in your world right now.[00:02:02]Angela:[00:02:02] so interesting things happening right now in the world of surgery. Um, the CMAJ, which is a Canadian Medical Association Journal, just published, um, a article around how they believe that the backlog of surgeries will be not solved. But part one, part of, of a large solution would be central intake for referrals.[00:02:28] Jonathan: Oh, interesting.[00:02:30]Angela:  It's being echoed everywhere. And as myself and one of my colleagues talked about, he says, I don't think anybody understands how hard it is. And I was like, I would, uh, I would agree. Um, And it's, it's not the software around it, but it is the cohesiveness of groups to agree to a central intake. And especially especially in the case where there is the perception of surgeries being divvied up.[00:03:01] Like let's just each take, uh, our equal pieces of the pie and do it that way. And the other person is maybe arguing in the fact that. Well, I can get done way more gallbladders than you can, so maybe I should just take more to them[00:03:20] It's an interesting one because when we talk about a divvying up just strictly referrals, what you're divvying up there is, um, consultations and potentially procedures down the road. But when we're talking about divvying up procedures.[00:03:35] There's a much higher price tag attached to those, right? Um, it's also short term thinking,[00:03:41] Jonathan: In what way?[00:03:42]Angela: So if you think about the way that connect is built is we're built, um, with the longterm in mind. We are building it so that groups can get to on the same platform, divvy up those referrals in a way that is equitable or purpose, purposefully inequitable. With the idea that you're going to get good data from this, you're going to get accurate go times with your wait times, right? You're going to, um, get a baseline of where you're at when you do equally, based on constraints if you want to equally, level load those referrals, and then maybe six months time, start to taking a look at wait times and going, Oh, well, you know, if we tweaked this here, tweaked this here, then we could do, uh, then we could maybe shorten wait times for everyone for category A or B.[00:04:38] It's that longer term view that gets you sophisticated data, accurate wait times, um, reports and data to go to governing bodies or sit at tables with and go, Hey, this is, this is the actual stuff. And that takes time. That takes a long time. Whereas what we're talking about with, um, this backlog of surgeries that are waiting, um, due to COVID, you're just looking at like, how many can we get through as quickly as possible in the most equitable way? now, not two years from now, but now.[00:05:17] Jonathan: But isn't that the same thing that like, if there's a backlog and you're trying to get through them as quickly as possible, is it a different solution than when we're not faced with this, , however many months backlog of, of surgeries.[00:05:30] Angela: Arguably it is the same solution. The, the difference I think is, um, Clinnect is built in a way that we can do a central intake that also allows patient continuity of care. So meaning I have my surgery done by the same surgeon that I saw in my initial consult.[00:05:48]This messes all of that up. And that was the differentiator with Clinnect is we actually like for so long, we talk about the fact that, um, in order to have a central intake and do surgeries effectively, um, everybody needs to kind of be put into, to pooled piles along each part of the journey and Clinnect.[00:06:07] Um, and our philosophy said, we'll hold, hold, hold up a minute. Couldn't we maybe have both.[00:06:13] Jonathan: Right,[00:06:14]Angela: and still serve the public in a way that is, um, is appropriate, but you also get to have that continuity of care with the surgeon that you've, started to get to know. And that that's never been really considered.[00:06:31] The thing is always been that, um. In order to get me through as quickly as possible, I just get to see the next available person, whether that be for a consult or a procedure or et cetera, et cetera. Whereas we said, you know, timeout. If you take a look at the big picture, I think we could do both of those things.[00:06:47]Jonathan: but right now it seems like the focuses is not so much that continuity of care. It's, it's we'd like, we really need to get through this backlog of, surgeries and you don't, you don't really get to decide. You just like, it needs to get done.[00:07:03] Angela: That's exactly it. That's, that's the thinking right now is that it? And there is, there is definitely research that says, um, that patients prefer to get their surgeries done quicker. If it. It means that even if it means that they have to see somebody that's different[00:07:23]Jonathan:  I'd rather have my surgery now than 10 years from now,[00:07:26]Angela: and I think, you know, the, what we were trying to say is the question's phrased incorrectly. Um, if, if the question is. Um, would you take a different surgeon than you had your initial consult with to do your surgery? If it meant you could have it faster? Well, that just incites a yes. Right.[00:07:45] Whereas if the other question, if the two questions were, if you could have your surgery done at the same time, um, would you prefer the surgeon that you've already met and built a relationship with or a new surgeon that's like, that's the question that Clinnect is asking. Which incites a different response, but it takes time to do that. it takes time to understand your baseline data and wait times and then tweak, with good data, making informed decisions versus, the short term thinking where it's like, okay, we just got to get through these surgeries now , I would like to see a bit of both. I'd like to see a mix where, maybe we do that for the short term is we just try and make the most efficient, meaningful, safe way to do this as possible right now. But down the road, don't forget about the long, the longterm[00:08:41]What is a Referral?[00:08:41]Jonathan: You've talked a lot about what Clinnect and referrals and all of these things. there's some context that I think people won't have. can you describe what the, like how do referrals work at a really basic level?[00:08:56] what is a referral? What, what happens[00:08:58] Angela: Um, I think it's a referral is something that most people are familiar with, whether they kind of know it or not. So every time you go to your primary care provider, um, so that includes general practitioners, family practitioners, nurse practitioners, um, all, all of these, health care providers that can make referrals to specialists.[00:09:20]So let's say it's a family doctor. You go to your family doctor and you have abdominal pain and your family doctor says, okay. it's bad enough that he's concerned that it might be a gallbladder or something like that.[00:09:35] So I'm going to send you off to a general surgeon. So at this point, your family doctor is , okay, who's the general surgeons in town? Who does gallbladders. are they all working full time right now? is any of them away on holiday and and and. So all of these questions, so then your, uh, family doctor sends, builds a referral, sends it off in their, um, typically their they make a referral in their EMR,[00:10:06] Jonathan: What's an EMR.[00:10:07] Angela: So it's a software that they use to manage your medical records. So an EMR is electronic medical record system. They type up a letter, they put any pertinent information, maybe your medical histories of medications that you're on, things like that.[00:10:21]They put together a little package that either gets printed off and faxed to this. General surgeon that they've guessed is around and guessed that does, um, gallbladders at this point, your family doctor is hoping that they received it.[00:10:37] You're not a hundred percent sure because they don't get a confirmation. They also don't know how long the wait time is. They have no idea. the receiving surgeons end either receives this on a fax machine, like a physical copy on a fax machine or their virtual fax machine, which is hopefully linked to their EMR where they receive it, they put it, they put it into their EMR.[00:10:58] So now you have a patient record on their end. Um, they typically don't send a confirmation back. You are now waiting. You don't have a clue how long you're supposed to be waiting because nobody's given you an estimated waiting time and you have no idea if they actually received it or not. That's typically how a referral goes.[00:11:17] Jonathan: So in a worst case, you go see your family physician for some concern, and he guesses at who to send it to faxes it, doesn't know if it actually was received on that end. Um, and you never have any insight into that entire process. Possibly never get seen because it was not actually delivered to anyone.[00:11:38] Angela: Worst case scenario. Yeah. Yeah. And there's many, many scenarios that go along with that. Um, meaning the referral could've gone to a specialist that doesn't practice anymore. The referral could've gone to a specialist that doesn't do, uh, gallbladders and maybe didn't, didn't send it back to that primary care provider.[00:11:57] Um, best case scenario, they send it off to the specialist. The specialist receives it. Um, maybe their MOA gives the primary care providers MOA, a quick call to say, Hey, we got this, uh, we got this referral. Um, my guess is, you know, it'll be about a two month wait time. Um, but, uh, we'll, we'll contact the patient directly and in two months you're contacted.[00:12:23] Usually by phone. So hopefully you have to your phone because they're phoning with an appointment for you. And if you didn't answer, then that, then they're going to the next one on the list and they're getting[00:12:34] that appointment. And then they get you, they get you on the phone and they say, Jonathan, can you come in at two o'clock on Tuesday?[00:12:40] And you actually can go in and two o'clock on Tuesday and you get seen.[00:12:43] So Clinnect now is an attempt to try and fix some of those pains.[00:12:50] Yeah. We are taking on the army of fax machines that are in all the physician offices all over. That's who we're taking on.[00:13:00]Jonathan: Oh, fax machines. , I worked. For an organization that was kind of old in their ways. . Uh, it frustrated me to no end that the thing that we would do as a practice to put information on, on the web, in a digital form was, so we started by typing it up in a word document. digitally,[00:13:20] Angela: Okay.[00:13:22] Jonathan: print it, scan it, and then put the PDF of the scan up on the website.[00:13:30] That's how information was communicated, started digital. It was converted into something analog, then back into digital, but a much worse version, the original and put it up on the, on the web, and it was, it just, it just boggled my mind that this was, this was something that people thought was the right thing to do.[00:13:54]What is Clinnect[00:13:54] So tell me about Clinnect. What is Clinnect now?[00:13:57] Angela: Clinnect is a drastically different way of making a referral. It's all online. It is tracked. There's an audit log around it so everybody knows when that referral was sent, everybody knows when it was received, accepted.[00:14:14]It's encrypted in a way that is, forward thinking and exciting. It's not a, not a fax machine or a piece of paper sitting on a fax machine, that's for sure. And it allows the really exciting part for physicians on both the referring and receiving end. Is that the primary care provider doesn't need to make all those guesses that I talked about.[00:14:39] They can just say, Hey, Jonathan has what I think is a gallbladder issue. I think it's urgent. And it automatically lets that doctor know who is available and who can take gallbladders.[00:14:53] And then from the specialist perspective, they get appropriate referrals, uh, timely. They're tracked, And, it allows the specialists to share those referrals and when the group of, uh, specialists in that area, so it's pretty exciting.[00:15:10] Jonathan: It is exciting. Lindsay shared Oh, a Maclean's article about how we rely on fax machines to send all this data around and how it's just, it's just not working. So it seems like, it seems like COVID has come in and the light has been shown and how broken the fax machine is for this kind of thing. For anything like fax machines, we don't meet them anymore.[00:15:35]We Don't Need Faxes Anymore[00:15:35] Angela: We don't need them anymore. Um, healthcare in Canada is built on. Foundations of things like fax machines I recently heard somebody say that healthcare in Canada is theatrical in the fact that we do showcase people doing remote surgeries with VR goggles and this amazing, high tech approach to all these, you know, sophisticated, um, methods and things like that.[00:16:08] Whereas at the end of the day, we still send referrals by fax machines. What we're doing with Clinnect is the really UN-sexy work of healthcare. We are not creating virtual goggles for somebody to do surgeries in remote parts of Canada because that's great, but we need to fix the foundation of even the way that we send referrals first.[00:16:39][00:16:39] Jonathan: I was talking with, my brother in law is a, uh, family physician and he, he had a quote unquote walk in phone call. And he said, if he had come into the clinic, um, he would have spent like two hours waiting around in the, in the waiting room until he got to see him. you didn't have to take time off work. And then, um. My brother and I just phoned them up and said, yeah, you know, saw him it took them, you know, less than 10 minutes, and it was just such a better experience for everyone.[00:17:05] Angela: We have, we actually have a lot of our, like our surgeons are just doing phone consults right now and that's surgeons. With an initial consult, right. They're getting the information that they do need. So, yeah, so you're right, it can, it can be just a phone call sometimes too.[00:17:21] Jonathan: take me back to your, the first thing you said, so, so Canadian medical association journal published an article that is advocating for a central intake.[00:17:33] Angela: That is, well, I mean, as a journal article, I don't think they're advocating per se, but what they are doing was, showing the benefit of a central intake on the access of surgery post COVID?[00:17:50] Yeah.[00:17:51] because, um, during COVID we have just, we, we stopped elective surgeries, almost altogether.[00:17:57] And there are some big numbers being, um, used around how many surgeries were canceled and how many surgeries, have been, missed during this time.[00:18:09]Jonathan: so those surgeries were scheduled, right? So they, that referral has already happened.[00:18:14] Um, this, the specialist already has that. So what, what happens now? Like what's the, what's the process does that, does that get, like, does it have to be referred or does the,[00:18:25] Angela: Yeah. So this is where, and this is where I'm trying to figure out, like is there a reshuffle of them? Right? So this and when they talk about Clinnect being long term, that's where this comes in. Clinnect is longterm because it starts from the need of a referral first through to the referral actually being sent.[00:18:44] Whereas these are typically referrals that have already been sent and potentially already been initial consulted on, um, maybe multiple times. Um, they're already at the place where we know they need a procedure. So is there a way to, in the short term, reshuffled these through a central intake that takes into account necessary items to reshuffle, not items, but constraints to reshuffle. Let's call them surgical referrals. In a way that, you know, reshuffles them based on their category, their urgency and the availability of the surgeons themselves because that may have changed.[00:19:28]And you can imagine to some of these people like they, like we didn't, we didn't hit pause on their symptoms.[00:19:34] So some of these people may have been like kind of in the semi-urgent category, have now bumped up to urgent, bumped up in urgency because their symptoms are now worse.[00:19:44]So they do they do need a very quick, efficient, uh, system to take a look at those changes and then reallocate them. Potentially reallocate them. Meaning it could go back to the same, same surgeon that was supposed to do it, or it could go to another one now.[00:20:08] Jonathan: Do you think you would see some of those referrals start to move around the province and like is that, whose job is that? Like whose job is that to review what has changed? Is that the surgeons or the specialist's job is that the family physician's job? It certainly is not the patient's job. I don't think.[00:20:26] Angela: I don't think so. I mean, that's all part of it too. Uh, whose job is it right now? So the patient is in the care still of the surgeon or the specialist. And in this case, we're talking surgery, so I can use the word surgeon. Um, and so it really is on them to kind of monitor as to where, where they're at.[00:20:49] But as you can imagine, there's no pause on this. It just keeps coming. So now we've put almost the unattainable expectations upon these surgeons to, um, sorry you won't be, doing procedures anymore and yes, your waitlist is building and building and building, but not, you still got to keep it, keep track of all these patients and where they're at.[00:21:11] I mean, that's insurmountable. So is there, is there a way that we can, quickly and efficiently. Do that as part of the reshuffle.[00:21:23] I don't know, but it seems plausible.[00:21:27]Could We Work with Specialist Groups to Address the Backlog[00:21:27] I would love to work with a group that is so inundated then so up to, they're like eyeballs that they like. They're like, I don't, I don't even know how we're going to restart our surgeries, but are willing to work as a group to do it and have an idea of how they might do, like how they could manually do it, but that would just take too much time and resources.[00:21:54] I would love to go in with them and say, let's try it. Let's try something and can we build it? Like, could we build something for you? I think that'd be cool.[00:22:06] Jonathan: I think it'd be cool. I'm so excited about all of the potential that, that this product has, not just for. Like, selfishly, you know, everyone has experienced the, the problem of, of getting a referral to some specialist somewhere and, and just sort of not having any idea of what's going on. Um, so I'm looking forward to just having my problem solved, but, um, it's, it's, it's cool to think that, you know, there's, there's some impact that we can have.[00:22:37] On, on healthcare on access to healthcare. The thing that everyone points to about Canada, like you have this wonderful healthcare system and it is, it's great in a lot of ways and not so great in, in many other ways. Um, it's just, it feels, it's really exciting to be part of this.[00:22:58] Angela: You're right in saying that, you know, Canada is often looked at as and held up in the way that our healthcare works and the access, And I'm hesitant to say this, but I think it makes us a bit complacent when we do talk about the forward thinking that we could do around further accessibility and further furthering that, that, um, the health care that we do have is because we do a lot of bat like back back of patting, um, of ourselves.[00:23:28] That's the word, um, to say like, look at us. We, we do, we do so well.[00:23:34] Mmm. And it makes us a bit complacent. And I think we could do a hell of a lot better. for not a lot of, massive shifts, but literally just doing what we do 10 times better. yeah, it makes, I'm excited too.[00:23:50] I think the timing is wild.[00:23:54] Jonathan: Oh my goodness. you look back to where we were, you know, last year when we were just sort of starting to talk about some of this stuff. And I mean, smart people have predicted that the pandemic is coming, but no one listened to them. But I mean, we certainly did not have any clue that this was going to happen.[00:24:11]trying not to feel like opportunistic. Um, I mean, I don't feel like we are being opportunistic at all, cause we started this journey a long time ago. Um, but it is, you know, there's a problem and we can help with it.[00:24:24] And we've got, you know, we've got a kick ass team to, to, to solve this.[00:24:29] Angela: That's exactly the way I feel about it too. And we're, and here's the best part about it. We're nimble enough to keep, um. Not re not reacting to anything but nimble enough to allow us to do some deep thinking around it and shift. And that's like, that's what I love about, um, where we're at too, is. Is, we're not just this big company that takes forever to maybe like steer the ship slightly one degree to the left, but instead we're like, Oh wow, look at that.[00:25:05] Let's like, let's, let's incorporate that piece. Or users are saying, please, please, please do this. Okay, let's do it. Let's like, let's make that better. And I think for me, because. The ethos of the company. You have always been grounded in the fact that we are building this for the, for, for the people, for the physicians to use, for, um, not for ourselves.[00:25:28] Um, but I've never really felt opportunistic about it at all because, um, I am so comfortable in the, the, um, philosophy that we built this on that I, that I feel it's desperately needed. It was needed years ago.[00:25:48] Jonathan: And, we're being very thoughtful about the approach to things, you know, thinking about, thinking about the privacy, thinking about, um, you know, thinking about it from not just the point of view of the physicians or the specialists or the, medical office assistant, who, who's using the software, but also, you know, what does that look like for the patient longterm?[00:26:11] Angela: Having worked in healthcare and having been like, just bound, um, from. Making big impacts due to, um, just simply lack of good data, lack of sophisticated data, lack of any type of meaningful information to make decisions on. Um, that's why I'm so excited to move out of the system to a place where I could influence that. In a row, like once again in a really, like, this is unsexy work, but at the end of the day, when I see the impact that, the potential impact, it's, it's overwhelmingly positive. So, and so many different areas for the patient, for the physician, for the, like the, the use of population data for, you know, et cetera, et cetera.[00:27:06] I just feel like it's not like we, you know, hit really hard in one area, but rather we, we, I think we're gonna hit a few home runs in a few, in a few different arenas here, so that's exciting,[00:27:20]Outro[00:27:20] Jonathan: Home runs in arenas. That's how sports works.[00:27:23] Angela: Think that's an awful, we're going to take that one out.[00:27:28] Jonathan: No, I'm going to leave that in. I like, I like mixing metaphors. I'm a big fan[00:27:33] Angela: so bad As soon as I said it, I was like, Nope, let's rewind that part.

There is always a recession coming, we just don't know when. The US is in one of the longest expansion periods ever known but many predict a recession in the next twelve to twenty-four months. Business owners can make money in a growing economy and they can make also money in an economy that is pulling back. Today we are talking to Jonathan Slain, founder of Recession.com – a company he started in 2008 when he lost his fitness-based business. He saw an opening and borrowed the money to launch his successful recession-proof consulting business. In his new book, Rock the Recession, Jonathan and his co-author highlight ways savvy entrepreneurs can bounce back from internal recession and make plans to be buyers when opportunity knocks. Episode Highlights: Jonathan's recommendations for owners of online businesses to start assessing themselves as recession ready. How to benchmark a small online business with smaller revenues. Importance of board of advisors and mentors and how to find them. The cost and time involved in choosing advisors and mentors. Other actionable advice for someone running an online business to prepare for economic downturn. The importance of having access to capital and credit now rather than waiting for the pull back. Why Jonathan wrote his book. Internal recessions and how to avoid or rectify them. How to research whether what you're selling will survive or thrive. Advice for the business hunter in pre-recession times. Some final tips in Jonathan's own words. Hint; plan now. Transcription: Mark: Joe there's a recession coming. Joe: Is it? I'm not sure I thought it was here 18 months ago or was coming 18 months ago and now it's going to be fall of 2020. What's the story? How do you know this? Mark: Well there's always a recession coming, right? Joe: Oh, yeah. Mark: I mean we know we just don't know when but if you look at; I would encourage people listening; when you're in your car don't pick up your phone but when you get back to your office or get back to in front of a computer do a search for a graph of recession gaps and you'll get to see from 1900 until present when the recessionary periods were and when the non-recessionary periods were. And we are in a period of time right now, one of the longest expansion periods in our economy and so it's not really soot saying or you know looking in a crystal ball to see that there's a recession coming. We know it's going to happen, we don't know how bad, we don't know when exactly but we do know it is. And I had an investment professor in college who would say all the time bears get rich, bulls get rich, pigs get slaughtered and I always thought well bears get rich too but you need to actually plan for; I screwed that up, it's bulls and bears and pigs but whatever you need to plan for this… Joe: I'm just trying to think through what you just said so thank you I thought I was not keeping up with you. Mark: Well you know what I failed that class so maybe that's why I don't know the right answer. But bulls get rich, bears get rich, pigs get slaughtered. And the point was you can make money in a growing economy, you can make money in a declining economy don't get greedy; that's the lesson but there is an in lesson in there, you can make money in a down economy but how many of those listening right now are just looking at their last year being like that was awesome without any idea of what they're going to do when; not if but when the economy pulls back or they haven't pull backed within their own company. And I know you talked to somebody who specializes in this; he owns recession.com for goodness sake. Joe: I know what a great URL, Recession.com, it's Jonathan Slain and he's been through this. He started his own company in 2008 and just had to fight through meeting payroll and all these different things and learned so much in terms of being ready for the next recession and preparing for the next recession. And he's expanded beyond the actual economic recessions that we're talking about and focuses a little bit in helping companies with internal recessions so that if they had a client that had a subscription or SaaS business but only had 10 major clients and they lost two or three within a month or two that's an internal recession. If you've got a hero SKU that you're selling and 70% of your revenue is from that hero SKU you are setting yourself up for an internal financial recession with your business if competition comes in and hurts that. So he has a readiness assessment test; a recession readiness assessment test on his website and it goes through and compares how you are prepared compared to others and helps people take advantage of upcoming recessions and avoid the major pitfalls in being one of those pigs that get slaughtered. Mark: Well let's get right to it because I think this is an important topic for anyone. Anyone out there that has an online business, don't get too fat on your current earnings. Understand that businesses go through cycles, economies go through cycles, let's all survive this next cycle and thrive in the next cycle and it sounds like that's what we're going to learn here. Joe: Hey folks Joe here from Quiet Light Brokerage and today I've got Jonathan Slain with us. Jonathan is the author of Rock the Recession and is an expert in preparing for an economic downturn either in a worldwide situation or a nationwide situation or possibly in your own business. Jonathan welcome to the podcast. Jonathan: Let's rock. Good to be here. Joe: Can you expand on that background a little bit? We don't do any fancy introductions here. Can you tell the audience who you are what you're all about and where you come from? Jonathan: Yeah, so I come to you today from my home in Cleveland, Ohio but I really started my career; I have to disclose that I'm a recovering investment banker. And so that's where I started. From there I went on to own my own business which was five gyms all located in Cleveland. I think you mentioned earlier that I borrowed some money from my mother in law in the Great Recession so we can talk about that. And since then now I am full time doing consulting for large companies looking to grow revenue in or profit and that is what brought me to writing the book. And then when we were talking before we started the show getting me on Fox News lately. So we can talk about any or all of that but that's my story. Joe: Well congratulations on stepping up to the Quiet Light Brokerage podcast from Fox, it's a big show you're on now. Jonathan: Understood. Joe: Are you nervous? Jonathan: A little bit. Joe: We've got some pretty impressive people in the audience believe it or not; they're both buyers and sellers of online businesses, entrepreneurs that are building businesses that they're solopreneurs in some case sometimes they have remote VAs working for them sometimes they have staff. But what would your recommendations be for those that are; first we'll talk about the owners of online businesses and how they prepare for a potential economic recession. Jonathan: Yes. So the first thing that I would do is to assess where you are. So as a business owner it's really to benchmark how you're doing compared to where everybody else is in the market. So if you don't know where you stand then you can't figure out what you should do first to start to get better and improve. When it comes to benchmarking that was where my business partner and the co-author of the book; that's where we started. And so we put up a free tool. It's on our website so if the audience wants to go to recession.com they can go there. It's 20 questions. It only takes about 5 to 10 minutes Joe and you'll get a score from 0 to 100. If you're a zero then it's likely that you're going to go bankrupt in the next recession, if you're a hundred then you're licking your chops; can't wait to pounce when we hit the next downturn. So that's where I'd start. Joe: How do you benchmark in an industry like the online business with a lot of smaller businesses doing less than 10 million in revenue when none of the information is public? Jonathan: Yeah. So what I can tell you is that from all of the responses we've received to the recession readiness assessment, the average score right now is a 37. So I think for people looking to benchmark themselves with other private companies 37 is where we're seeing the mark. If you're above that score that relative to we've got a thousand plus responses you're probably doing better than the average and below that can be nervous. So I think that's one piece but it brings up a good point and I think part of what I was listening to on some of your other episodes is that private businesses, small businesses need to have their own board of advisors. And so that's one of the questions actually on our assessment is do you have a board of advisors? And I'm not talking about your lawyer, I'm not talking about your accountant, I'm talking about people that have a proven track record of making money in business preferably in a similar business to what you're doing to your online business and that will just give you straight feedback. Again I know that some people bristle when I say don't have your accountant or lawyer on the team. My issue is that your paid professionals may not want to tell you what you need to hear all the time for fear of losing your business. Joe: And I think that's a great idea. I call them mentors or board advisers whatever it might be. The question is I saw something on the hustle the other day, we focus on or I watched that and I know Sam and that was a question that someone came up with so like look I'm trying to find a local mentor or board of advisors; how do you find them? A lot of people gave a lot of different responses but what would your advice be in terms of trying to find the right type of mentor or board of advisor and is there a cost associated with it? Jonathan: So I always have a list. I call it the list. I keep it with me at all times. It's the 10 people I'd love to have on my board of advisors; the people I'd love to have as a mentor or a coach. And the issue is that most of them are not going to work with me right now. These are all folks that are super busy; they're overcommitted, and so they're on my list because once a quarter I bug them. I send them an email, I text them, I give them a phone call, I just drip on them and I try to wear them down until they finally get to the point where they're like fine I'll coach you; I'll mentor you. And that's literally I think how I've gotten a lot of my mentors because the people that I'm chasing don't have discretionary time. And so I don't think it's as simple as we listen to the podcast and we decide I'm going to do this thing and you just all of a sudden have a board. It's going to be a process that takes some time. In terms of the cost associated with it, I do think it depends on who you're working with. But I would think an honorarium of 500 to $1,000 per board member per quarter is fair. And I'll tell you that they shouldn't need the money. If the reason they're doing this is turning a little bit extra money I don't think you have the right person on your board. I think that in most cases they should be donating whatever you are giving them to their favorite nonprofit. And I think they should want you to pay them the 500 just to keep you honest and actually listening to their counsel and to keep them honest so that they feel like they have some skin in the game that they need to do some research; they need to read your financials before they get to the meeting. Joe: And how much time a quarter do you take up with someone like that? Jonathan: Yes. So my thought would be a four-hour meeting once a quarter and that they should do anywhere between two and four hours of prep of reading whatever packet that you send to them before the meeting. Joe: Okay, not too bad. What actionable advice can you give people that are running online businesses now in addition to the board members what could someone do now thinking okay, if there is an economic recession I want to do everything I can to prepare over the next 6 to 12 months. What can they do now? Jonathan: Yes. So the second step in the whole process would be to tune yourself and your business up. And by tune up I mean you're going to be doing things like looking at your line of credit. So do you have the right line of credit to be able to grow in a recession? Joe: Why do they need a line of credit? Jonathan: So by that, I simply mean capital access to cash if we get into a downturn and you see an awesome opportunity to buy assets to buy inventory for cheap, to be able to afford talent that you couldn't get access to during the recession or maybe they find a bolt-on opportunity for their business to purchase another business then you're going to need access to capital in order to make all those things happen. Joe: And what forms of credit would you advise someone seek? Jonathan: Yes. So I think that the best would probably be a line of credit that isn't secured by personal assets. If you can't get that done then look at a home equity line of credit and if you can't get that done then look at credit cards. The thing is to have access to capital; you don't have to use it. But here's the deal like right now when the economy is good this is the best possible time to go to your bank and ask for credits. When we're in a recession, when we're in a downturn the banks are not going to loan you money. They're going to laugh at you if you come and you try to borrow from them. I mean one of my favorite sayings is that you can go to a bank; it's like asking for an umbrella except when it's raining. So banks operate in the same way. They want to extend credit now because all the banks are competing for your business. When we're in a recession, when we're in a downturn they're going to start to contract their portfolios. They're going to start to mitigate risk. They're not going to want to open up new lines of credit especially for online businesses; especially for newer online businesses that they see as riskier and not asset-backed. Joe: I'm going to back that up, folks. I sold my business as you all know in November of 2010. I bought a house in June of 2010. I paid mostly cash for it. I sold my business in November and then got busy got delayed and didn't apply for that home equity line of credit until sometime in May the following year. Well, guess what? I had filed my tax returns. I didn't have employment. I had a ridiculous amount of equity in my home and I got declined for a home equity line of credit because of timing. It was ridiculous. It was 2011 at that point as well. So the economy was just coming back and I had a ridiculous amount of credit but because I didn't have a quote-unquote job or income at the time I got turned out for hillock. And I had been given previous advice exactly like this and this is from my mentor; a business person, a business advisor, always have some sort of line of credit available to you. Jonathan is right. Make sure if you can it's not tied to personal assets but the reality in this solopreneur world that we live in for the most part that's really hard to do. If you can't get that non-secured get secured and get it backed up as a credit line with your investment advisors or on your home equity line of credit or any other way that you can. What about credit cards and revolving credit cards; do you advise people to mess around with that at all or is that something that they should avoid? Jonathan: Well I would as a last resort. Again for me, you don't have to use them. But I'm a business owner too; I'm an entrepreneur I always want to have a backup in case things don't go as planned and so part of this is that I want everyone to look forward to the next recession. I know that's weird but that was the idea behind why we wrote the book. I mean the traditional plan for a recession is fire people and cut overhead and just survive and that book's already been written many times over. The idea here was what if we studied people that leverage recessions and use them as a way to hack the system to escape the usual need to hustle and grind to be able to grow your business and then sell it for a dream outcome. And so I'm always thinking of how can we use credit in downtimes to be able to buy assets to buy businesses from other people that weren't smart enough to listen to our podcast; from everybody that didn't prepare. And at the same time if all the stuff we're talking about isn't working; Joe, if people are listening and they're like look my business isn't growing and I'm in a recession myself then you need access to that capital just to survive. I mean at the end of the day we all need to protect the beehive as entrepreneurs because if the business doesn't survive then none of the rest of this matters. Joe: And that's almost moving into the second type of recession and that's just an internal business recession when someone has key employees that leave or hero SKUs where competition comes in. How do you help people in that regard or what actionable steps can you recommend to them that they take to avoid a situation like that or rectify it if it happens? Jonathan: Perfect. I mean I know a lot of people don't always agree with my predictions. I do think that we're going to have some sort of a downturn in the US economy towards the end of 2020. I don't think it'll be a full-blown recession but I do think as we get closer to the election that consumers and businesses will hold up in terms of spending and that will slow our economy down. But if you're rolling your eyes right now, if you're saying I don't agree with this guy I don't think the next recession still 2021 or 2022 and you're about to tune us out then just wait one sec. The idea here is that you brought up non-economic recessions so if your biggest customer leaves that would usually put most businesses into a recession. It could apply to a hero SKU in our case. If you have a competitor come in and attack your hero SKU; same difference, you're in a recession. If your best one or two employees leave and they go start a competing business, you are in a recession. The other one that has recently come up is what about government and regulatory changes? I mean I know the audience understands that vaping is a huge new business and everybody wants to get into marijuana, get into vaping well in New England they recently passed a law putting a moratorium on vaping while they studied the after-effects of it after there were several deaths. All of a sudden all those online businesses that were selling vaping cartridges were vaporized. And that happened overnight. It happened very quickly. So I want everybody listening to have a plan for how they can leverage those opportunities. Joe: Well the tariffs I guess could be considered a recession for some businesses. I've got a client who's tariffs are 42.6% on top of his cost of goods sold; a pretty big impact. Jonathan: They sell online? Joe: No, they don't. Jonathan: Okay. Well so it's thinking through if you're in one of those businesses what can you do? So the question then becomes you want to start to think about how you can diversify. And I know that the more practical tips for this are that I like to use online research. There's a site called Ibis World and it's a paid site. Joe: Is that I-B-I-S? Jonathan: I-B-I-S. Ibis World. You would have to make an investment but they provide industry reports on where they believe the future of different industries are going. So if you're selling line online they've got a report for that. If you're selling widgets online they've got a report for that. And the idea there is that you want to think about industries that will do better in the downturn and industries that will do worse. So in the book, we write about some of our favorite; some of the ones that got pummeled in the last recession, in the Great Recession and the ones that did well. The ones that got pummeled think like jewelry stores not good in a recession. If you're selling high-end jewelry online or in a store; not good, same thing with things like travel and tourism, discretionary goods. That's why I was selling personal training services in the Great Recession; not good. We all know that insurance and finance got hit especially hard in the Great Recession. Not good. So the ones that did well would be things like consumer staples; so if you're selling consumer staples like toothpaste, people are still going to need to brush their teeth in a downturn. If you start to get more exotic with your thinking; think about like veterinary clinics and veterinary supplies, people still spend money and take care of their pets in a downturn. And people don't care; if their dog is sick they'll put it on a credit card, if their dog likes Eukanuba and that's one of the most expensive brands, people will not change their dog food brand if we're in a recession. So if you're an online seller of those high-end pet products; I actually like that market. I think it will continue moving forward. My point just to answer your question though is that if you slow down, if you do some of the deep work of thinking instead of just being busy then I think all the answers are actually out there for how I will position myself, how I would start to diversify if I am in that hero SKU situation. Joe: In other words I had a neighbor tell me once; I was asking him, he was a bit of a mentor as well, he said Joe, you know exactly what to do. You just need somebody else to tell you to reinforce it. Same thing here folks; you've heard Mark and I say it and almost every guest that's ever been on the podcast, focus on the business. It's not about driving top-line revenue only, focus on the nuts and bolts of the bottom line part of the business and that's going to bring value; improve transferability, the documentation, the growth trends, the data behind the business and that's going to bring you more value in the short run and in the long run if you eventually do sell your business. And that leads Jonathan to talking about the other half of the audience; the people that are buying online businesses, those people that tune in week after week as they're on the hunt for that next business that they want to buy and they listen to us. What advice can you give to someone if they're out there hunting for a business in terms of looking for that business with a potential forthcoming recession? Jonathan: Yeah. So I want to start with the story and that's that Paul Belair who I wrote the book with; right before the Great Recession started Paul bought a business. He invested a million dollars with his management team to purchase the business and they grew it during the Great Recession. It was an HVAC business, so a business that helped out with heating, ventilation, and air conditioning; not a sexy business. And they sold it 63 months later. They sold it for over 70 million. Joe: He bought it for a million and sold it for over 70. Jonathan: So the purchase price was higher than a million but they put in a million in cash. Joe: I got you. Jonathan: And then they had some debt to fund the rest of it. Joe: Fair enough. That still sounds like a hell of a return on investment. Jonathan: Yeah well it's 70X on your cash plus; I can't tell you the exact number. He's under an NDA but in any case, it's even over 70 million. So that's why Paul writes the book with me but in terms of being on podcasts, you would prefer to be off playing pick-up ball in Florida. Joe: So hopefully he's using Amazing Aces. We've got a client that bought that business and it's a great brand. Jonathan: Really? Joe: Yeah. Joe: Jonathan: I love it. Well, it's Amazing Aces? Joe: Absolutely. Jonathan: All right I'm making; you know what? I'm still Christmas shopping for him. Joe: There you go. Jonathan: So I tell you that story because part of the way that they did that huge one million to 70 million dollar exit is that they picked a business and then they moved it such that it would have a tailwind in a downturn. And so if you're a buyer right now it's thinking about what kinds of businesses would get an economic tailwind if we were in a downturn and then like my mom says you've got to put yourself in the middle of the street if you want to get run over. So Paul… Joe: Very bad parenting; I don't know what the deal is with your mom but I got to say that's not very good advice. Alright. Jonathan: Paul put himself in the middle of the street because what he did was when he bought that HVAC business they moved it from doing mostly construction; so by construction I just mean when you buy a new HVAC system and they install it on the roof of your building that's a construction project. Joe: Yeah. Jonathan: Those units cost 5 to 20,000; that's a big project, a big investment. They moved it to doing service. So how could they take the equipment that was existing for a business owner and repair it because in a downturn; in a recession, people would rather repair their equipment than replace it. And so Paul saw that trend coming with his management team and totally changed the business to really capitalize on that. And that's how they were able to grow it into this recurring revenue business which again is another big thing I'd be looking out for your buyers. Joe: Yeah. Jonathan: Yeah. How do we get into a business that has recurring revenue? How can we be selling the razor cartridges instead of that one-time transaction? Joe: So find a business in a niche that's not going to be impacted by a downturn whether it's a critical service business or something like the pet space where people will spend money on their pets no matter what and adding some sort of recurring revenue aspect to it. Beyond that any thoughts in terms of their own personal financials and how to prepare for it in terms of buying; is it the same thing lining up as much line of credit and purchasing power as possible? Jonathan: Yeah well actually my favorite tip there is on the personal guarantee side. So I know right now with the economy booming; I mean consumer confidence is at record highs, unemployment is at record lows, the economy is still booming so banks are still willing to do more than they will at any other point in our economic cycle. I love the idea of capping, reducing, or eliminating personal guarantees especially for your buyers. So what does that look like to go to the bank and ask them to do the deal but to do it without a personal guarantee or to put a cap on that personal guarantee? Right now I think bankers are willing to have that conversation. You don't have to give up a blanket personal guarantee on all of your stuff. So this isn't possible generally with an SBA loan so don't worry about writing to me about that because I get it. But if you can do a conventional loan product can you get it so that you can cap those personal guarantees or reduce them? And it may mean that you have to shop banks, maybe you have to go to four or five banks, maybe you have to talk to your local credit union to make that possible. I just think it's worth having that conversation so that if we get into a downturn; if your business does go sideways that you've mitigated some of the risks that you would otherwise have. And it's free to ask. Joe: And on that aspect folks we've had Shakil Prasla on the podcast and Shakil has bought half a dozen businesses and he's done it mostly with non-SBA money and building up credit with banks and probably is avoiding that personal guarantee as well. So Google Shakil Prasla and Quiet Light Podcast and you'll find that episode. In fact, I think if you Google Shakil he's got a new course on how to purchase an online business as well so check that out. Jonathan before we go any last-minute thoughts or advice for anybody listening in terms of rocking the recession that may be coming in like 2020 in your words? Jonathan: Yes. The main thing is to put together the recession plan in the cool rational light of day as opposed to the emotional heat of the night. I want the audience to be thinking about putting together a plan now and then putting it under glass and then if you do have a recession in your business or you see on Fox or CNN that they're announcing that the economy's in a recession you can go over the glass break the glass take out your plan and start to execute it. The issue most of the time is that we don't have a plan and so when we get into a recession whether it's personal or affecting the entire country you're huddled in the fetal position in the corner of your office like I was when the Great Recession hit. I didn't have a plan. I had people knocking on my office door asking me what was going to happen with the business. And I just spent months trying to figure out what the plan was while all my competitors were executing and taking the best opportunities off the shelf. Well if you're still graciously listening to us that's what I really want for you is to be one of the people that can actually be looking forward to the recession and that can just move into execution mode when the next recession is announced. Joe: That's great advice. Thank you, Jonathan. How do the audience find out about more about what you do online and helping them rocking the recession? How can they find you? Jonathan: Sure. Recession.com is the website and yes we really do own recession.com. All my contact information is on there. They can get me at Jonathan@Recession.com or all the infos are on the site if they want to go do that. Recession Readiness Assessment. They'll see all my contact info right at the site. Joe: Excellent. Thanks for your time today Jonathan. I appreciate it. Jonathan: Alright. Rock on. Links and Resources: Recession.com Free Assessment Tool Rock the Recession Ibis World

Jonathan So is a teacher in Peel District School Board. He is also a keynote speaker, motivator, Math enthusiast, and mentor to many. You can learn more about Jonathan here: https://sites.google.com/raylawsonps.com/jonathanso/home or here: https://mrsoclassroom.wordpress.com/

On this week's show, Noa Daniel leads a conversation on the purpose of school. Joining her in the conversation: Jonathan So, Thaddeus Bourassa, Derek Rhodenizer and Stephen Hurley. Powerful and sometimes uncomfortable.

This week on ONedMentors, it's a conversation about learning? What is it? What enables it? How do we know that it has happened? Host Noa Daniel welcomes panelists Derek Rhodenizer, Rola Tibshirani, Thaddeus Bourassa and Jonathan So. What is learning? Discuss!

In this episode of Logics Academy, Mike speaks with Jonathan So about his role as an instructional coach with PDSB, and how he uses robotics to help the teachers he works with create awesome and engaging lessons. Notes: The Logics Academy Educator Community launches in March with phase one (Logics Teacher) stay tuned to Twitter @misterwashburn and @LogicsAcademy to learn more. Jonathan So on Twitter: https://twitter.com/MrSoclassroom Jonathan So's Blog: https://mrsoclassroom.wordpress.com/

In the 19th and early 20th century, there are many examples Mormon women healers.  These women used to lay hands on the sick.  By what power did they do this? https://youtu.be/HxqcxwzP2gE GT: I remember as a priest growing up and having the lesson over and over:  priesthood is the power to act in the name of God. Jonathan:  Okay. GT: Okay. Jonathan: That is a common definition. GT:  A common definition. So, what I heard you say was that women in the 1800s especially, but even into the 20th century, healed both men and women, probably more women than men, but it happened with both genders. They healed by the power of God. But it's a mistake to call that priesthood.  Is that correct? Jonathan:  Yeah. So, using today's definitions to describe historical practice doesn't work. GT: Okay. Jonathan:  It just doesn't work. GT: So,  it's hard to talk about then. Jonathan: So it's consequently challenging. Right? So, well then how do we talk about it? Honestly, this was a fun and challenging conversation.  Stapley says that the term "priesthood" used today, while a definition is "the power of God", priesthood also implies ecclesiastical authority.  Women can freely utilize "the power of God," but since they don't have ecclesiastical authority, it is a mistake to call the healing blessings they did "priesthood."  For me, the terms "power of God" and "priesthood" were so synonymous, that I didn't understand the distinction Stapley was making.  Check out how Jonathan clears up my misunderstanding. He also gives us more information on baptisms for health, and temple healers.  I was not familiar with temple healers.  It turns out that women often fulfilled this (now defunct) practice of a temple healer. Jonathan:  There are examples of people being baptized in the Kirtland era and being healed upon their baptism, but an actual healing ritual, a designated ritual, baptism for health occurs in Nauvoo. It's designed to be, I think it envisioned as part of the temple. So, the temple is a place for healing, specifically Joseph Smith envisions it as a place where the sick would come and not only receive an endowment of power and create heaven, but also be physically healed. Baptism for health was an integral piece of that healing liturgy, but it is immediately and ubiquitously performed outside of the temple. So in the rivers and wherever the Latter-day Saints go from that point forward, baptisms for health are common. As soon as the temples are built, there are regular days for baptisms for health. So, if you're feeling unwell, you could make a pilgrimage to the temple. One of the temple healers could baptize you for your health. GT: In the temple? Jonathan: In the temple, and they kept records. In fact, the single most common temple ritual for many years in the 1880s was baptism for health. So there was more baptisms for health for the living. I should qualify that. The most common ritual for the living in the temples was baptism for health. Early Mormon women anointed with oil and laid hands on the sick to heal. You should also check out our previous conversation where we talk about "cosmological priesthood."  Check out our conversation….. [paypal-donation]

Andrew, Aiden, Fabeku, and Jonathan are back with a surprise or two coming your way this episode. We start by catching up, and discussing the events of the past couple of months and end with some amazing questions from our listeners! Check out our past 2 episodes if you haven't yet. Full episodes and ways to connect with the skulls can be found in the links below. *EXPLICIT EPISODE ALERT* Click here to listen to the first chat by Stacking Skulls. Click here to listen to our most recent one.  If you'd like to learn more and sign-up for the Ancestral Magick Course, click here. Find the Stacking Skulls Shirts, and all other types of merch here. If you are interested in supporting this podcast though our Patreon you can do so here. If you want more of this in your life you can subscribe by RSS , iTunes, Stitcher, or email. Thanks for listening! If you dig this please subscribe and share with those who would like it. Andrew   If you are interested in booking time with Andrew either in Toronto or by phone or Skype from anywhere click here. ANDREW: So, there are two quick things I want to share with everybody before this podcast gets going. The first being, Stacking Skulls now has shirts. That's right: they are on my website. If you go into the product section, you'll see a section for shirts. Or you can just search for Stacking Skulls and you will find them. And secondly, we spent a lot of time talking about ancestors in this course, and coincidentally, or perhaps synchronously, I am running my ancestral magic course, which is an opportunity for everybody to learn some brand new divination tools that I have created so that they can build a tighter relationship with their ancestors, either known or unknown, and start to learn to work some magic with them. So, if you're interested about that, jump over to TheHermitsLamp.com and slide over to the events page, and you'll find it. Without further ado, Stacking Skulls, my friend. [music] Welcome to the podcast, folks. Just to give you a heads up before we start: there were some technical issues with Jonathan's microphone. We've trimmed them and cut it, so it flows, but if you run into anything strange, that would be what was happening. [music] Hey world! We're back: Stacking Skulls. This is the magnificent first show of 2018 with all four of us wonderful wizards in the same place. Thanks for tuning in again. And, if you have not listened to the previous rounds of shenanigans, you may want to go back and do so, or you may want to bypass that entirely. I'll leave that in your hands. You know? But there are two previous episodes or installments of myself, Aidan Wachter, Fabeku, and Jonathan Emmett, and you know, we've gotten together a few times and talked about some things, so I'm going to kind of lead us off, though, with our kind of starting point thing, which is, like, hey folks, what's new in the last three months since we last all hung out together? JONATHAN: I had a microphone up my butt. [laughter] ANDREW: Excellent. Now, the explicit tag! JONATHAN: Next, Aidan's turn. [laughter] AIDAN: You know, this has been like the craziest three months ever. Right after we recorded the last time, my son died, and that was a really huge and transformative thing. And it's hard to describe it anyway, but...there is like a massive massive hole there and loss there, but it was also incredibly beautiful. We were able to get him home from the hospital, so that he died in his back yard, with a bunch of friends and family around. It was easily the most magical and beautiful thing that I've ever seen. And then, I had surgery. And now I'm pretty much recovered from that. And playing catch-up in the shop after those two things, and as of last night I'm now a double grandfather, as Ash's partner, Desi, just had twins last night. And they're beautiful, everybody's good! ANDREW: That's amazing. Yeah. Whenever I've gone through big losses in my life, you know, like two of my brothers died within six weeks of each other... AIDAN: Whoa. ANDREW: And, I always find myself at those times, in, like this sort of liminal space, right? You know? Like where I just sort of end up where I'm like, I feel like I'm constantly in ceremony for some period of time afterwards. And surgery does that, and, you know, I mean, for me, having kids, I don't have any grandkids, but having kids did that. Do you feel like you're still kind of in that, that kind of space? Are you like, sort of living 24/7 in there, or...? AIDAN: It's really wild, because, I think in the last episode, we talked about that I have these kind of death spirits that I've been hanging out with for a couple of years now. And in the week that I think I talked about, how they've gotten really busy, leading up into it. And so, that had become this, like, every night crazy kind of spirit initiations with these kind of hive beings that their thing is death, that I call the sisters. And so, when he, when I found out that his heart had stopped, that they had him on life support, I went in and they were totally waiting for me, and so it was very odd, cause they'd clearly been setting me up for this thing, for a couple of weeks. And so, I went straight in to go find him, where he was, kind of stuck in between, and assist from there. And so, the combination of all of that and then actually flying out, I guess two days before he was, we actually removed him from life support, and going through that process there, it's the most complete thing that's kind of a major event that's happened to me, as far as kind of fully self-contained in a way, of anything that I've ever experienced. So it's very odd, cause in many ways, I just feel really really good, you know, and I'll get hit at points, you know when I've been doing work for Desi and for his babies, there'll be these moments that are very very sad, but it's really just about, I know how much he would have liked to have watched the thing, and met them in the flesh and done that whole thing, that was really important to him, but what I feel like is this huge shift. You know, you have those moments in your life when you can feel like the cogs in the wheels of the machine are always turning, right? And to me, we're always trying to like, smooth that out and gauge where it's going and gauge what the next configuration is going to be. And this feels, in a really crazy way, like it's the smoothest kind of complete snap of things. So that's really what I have more than it being anything else. And like, just mass clarity. So there has been a huge amount of work going on, but it's really been, like there's a ton of stuff that, I don't need that anymore, I don't need to think about that any more, let's do the work to finish that piece off. About things from my childhood, and, you know, social dynamics, magical dynamics, all that stuff. There's been a lot going on, definitely. But so far, it's, you know, it's weird to say, in that situation, that everything seems really good. But it does. ANDREW: Yeah. I mean, it's certainly my experience of... Well, it's one of the reasons for the practice, right? You know? Whether that's Fabeku's The Practice, trademarked, or whether it's just having a practice, right? AIDAN: Yeah. ANDREW: I mean, you know, I think that there are... Ideally we get to these places where there's grief, there's loss, there's whatever, right? And there's the hole, and there's the absence of that person from experiences, and the feelings that come from that, right? But then there's also this capacity to be like, I find myself at various points thinking, other people seem like they feel like I should be way more upset about this... AIDAN: Yeah.... ANDREW: ...than I am, and I have this sort of very deep grounded position around it, where it's not avoidance or denial, cause it's actually almost like a hyper level of looking at it so squarely that it becomes easier to accept it, or to recognize it, and to see the ways in which that is, as you say, maybe that, the moving of the cogs, the machinery of the universe, the inevitability of some kind of fate force or, or just something that is just beyond our control at this point, either way, whether it was destiny or not, you know. AIDAN: Yeah. And I think, yeah, that in spades, and it's really interesting, because it's also, and I'm sure that all of you have had this experience, that we do all this work, kind of in these liminal states, or... ceremonial work or ritual work, not in a ceremonial magic sense necessarily, but just the work dealing with spirit, and dealing with the universe at large, what I call the field, and periodically, there are things that happen that really make you realize you haven't done your work in some places? [laughs] ANDREW: Mmmhmm. AIDAN: That you're like, “Oh! That smashed me!” Right? And I've had a good number of those. This was the reverse of that. This was like, I got the news about him, I went in, the allies that I work with were like, really sweet, and like, okay, you now know what we've been up to with you, let's go do it, you know? He's here, he's stuck. Let's fade him. And that's the most beautiful thing that I've ever experienced. And to me, it is, it is the, yeah, you can do money magic, you can do attraction magic, you can do whatever, but to me it's that: How is the work assisting your reality in the actual reality that you're in? ANDREW: Yeah. AIDAN: And this was totally solid. ANDREW: Yeah. AIDAN: And it remains totally solid. And I feel like at least the people that I've dealt with closely that were close to him all get that, in a way that I've never seen around someone's death before. And I think it is people who were doing the work, and who are... I have this knowledge that I've had since I was a kid, that I kind of realized what historical life expectancy of humans was, and the numbers that even got anywhere close to there, and what infant mortality rates and childhood mortality rates are, and so since I was a little kid, I've had that knowledge of that. Like, this is a totally iffy thing. You don't get to stay, and you don't get to pick when you leave, and far more leave sooner than later. You know? ANDREW: Mmmhmm. AIDAN: And, I've had that. I was in San Francisco, at the kind of height of the AIDS wipeout there, and so that's also, I think, you know, at an early age, I lost a lot of people. And so, it was really interesting seeing this, and going like, this is the most okay I've ever been about having somebody cross over. But I think that that's really tied into the work that I've been doing for the last five or ten years. That I could actually be there with it as it was, and go, okay! This is, me, it doesn't matter what I want here, I'm irrelevant in this situation, so... ANDREW: Mmmhmm. AIDAN: I would help the process that's actually happening, to happen in the way that it's supposed to, you know? But yeah. That's what I've been up to. [laughs] ANDREW: Yeah. Well. It's affirming to hear you talk about it. Do you know what I mean? AIDAN: Mmmhmm. ANDREW: Because, because I think that there are lots of ways in which, especially certain kinds of conversations around magic can feel sort of superficial and transitory, whereas this sort of, the deep work of, I don't know what you would call it, elevating oneself, healing oneself, harmonizing with that universal, the cogs of the universe or whatever, you know, I mean, to me that work has always been the most important work, but it is, except, you know, except when you lose a wheel, you don't notice it, right? Like there's no way to really sort of see it in action, and then when you see it, you're like, “yeah, it's so good that I practiced all that driving with three wheels, cause, one just came off, and now I can stop safely and put something else on there and see what happens next, you know?” So. AIDAN: Right. Well and I think it also syncs into that concept that kind of connects to a question that we had that, in passing, which is this kind of, there is this direct relationship in my mind from what we now are viewing, the pieces that we can see of it, anthropologically, as shamanism, right, which is this, to me, this epic chain, of shamanism and magic and sorcery and whatever you want to call it, spirit work, that goes back as far as we go back. And I think that this kind of thing is the root of it, you know, it's about... The reasons for all the kind of death mysteries are not because there's some way out of it! [laughs] ANDREW: Mmmhmm. AIDAN: It's just, this is a reality that is the most prevalent reality other than the birth one, right? And that's that, the wild thing about this to me is that, you know, he's gone now three months almost exactly, and his children are now here as of yesterday. And I think they're going to have a really... They have a fantastic mom, who has a fantastic network of people, and I think they're going to have really fantastic lives, and yeah, there'll be that piece that they didn't get, but he's like, he's an epic, mythic creature for anybody who kind of has watched this, it's like, and I don't know that that's a benefit or a drawback, to grow up with that! [laughs] Without getting to see some of the grungier sides of it as a kid. Yeah. But, they're going to be special people. They've got special people all around them. ANDREW: Yeah. JONATHAN: You know, I was kind of thinking, while you were talking there, it kind of makes you wonder if he had to leave so that they could be born, in a way. I mean, just, the surrounding, everything surrounding the situation of how it just kind of happened, it really was no warning of any sort or anything, I mean it just kind of happened. It just, it makes you wonder, you know? I think about weird stuff like that. But it does kind of feel like he had to go so they could be here. You know, it's kind of a change of energy or exchange of... the... AIDAN: Mmmhmm. No, I totally, you know, it's one of those things that again, we never get to have those answers in any… JONATHAN: Right. AIDAN: …definable way, but the thing that I saw, through the time that I was out there when he was in the hospital and then when we brought him home, and had, I don't know, there must have been 20 or more of us in the back yard with him... …Was, you could see the transformation happening on all of those people. While it was happening, I was like, either you could see that there was a way in which this thing was a huge gift to all those people, to see someone's death happening and it being processed by the people close to them into my mind, the most beautiful way that you could hope for, you know? JONATHAN: When I was 12, I think I was 12, I was pretty young, anyway, my grandfather, loved this man dearly, he was just one of the coolest guys in the world. He taught shop in east Wichita, in, you know, some of the toughest parts of town, and he was Native American to top it off, so you know he probably didn't get treated very well, but he was just such a good man, it was hard for me to let him go, but… I was 12, and he had a death rattle, and I don't know if people are familiar with... It's not the worst thing in the world, but it's not pretty to listen to... And I remember my parents left, and I was just there in the room with him by myself, and our preacher at the time, she wasn't really a preacher, more of a spiritual leader, came by and we were talking, and he started having the death rattle again, and she went to get a nurse and he died. And that was my first experience with death, at such a young age, and it was... It didn't devastate me, like, "oh, I saw somebody die, now my world's over," it was just, it was kind of fascinating, but you know, it broke my heart, because it was my grandfather. So, I kind of understand that, I mean, it's an interesting process to watch someone actually leave [static] you know and that was [static] on several... AIDAN: You're breaking up... ANDREW: Yeah, turn off, your microphone's suffering from what you've done to it, it's going in and out, my friend. JONATHAN: Is it? I broke it. AIDAN: In and out! I see how it is. JONATHAN: How's that? [laughs] ANDREW: It's good. JONATHAN: So, I should keep my microphone out of my butt. Anyway... ANDREW: Let's [laughs], on the segue of Jonathan's problematic microphones, what's going on with you, Fabeku? FABEKU: Yeah, it was... it's been kind of an interesting few months, you know, it was holiday stuff, and you know, weird, I'm not, I don't love holidays anyway, but this one was a little weird. You know, my mom's getting older, and has some health stuff going on and that's been...not so great, and with that, there's some weird cognitive stuff that's starting to happen, and I think it's interesting, cause I was relating in a different way to what Aidan was talking about with... You know, it's been interesting to kind of look at that cycle of her, she's in her eighties, and, you know, kind of getting to that phase where things are becoming kind of difficult and problematic, and it's interesting, kind of watching the other people around her, and kind of their stuff that's happening with that, and you know, the kind of the... the sadness, which I get, but kind of the panic and the fear and the weirdness and that kind of thing... Had a chance to talk with her a little bit in the busyness of the holidays, just kind of where she's at, and it was interesting, like she, she mostly felt okay with things, until everybody started freaking out, and then she got kind of fucked up and worried about it, and you know, so we talked a little bit about that, kind of managing other people's shit, and you know, we talked about ancestor stuff, and it's interesting, cause she, I mean, her background couldn't be any more different than mine in some ways. She grew up in a super religious Pentecostal home and music was "of the devil" and, you know, all of that kind of stuff, so, we have pretty different philosophical takes on things, but, yeah. We, it was a good conversation, we got to talk about the ancestors and kind of crossing in a good way and being met by the ancestors and you know, I, we talked about kind of my practices with that a little bit, and I asked if she was all right with me kind of working with the ancestors to, you know, kind of do what they need to do so when it's her time, you know, it can be as smooth of a transition as possible and, you know, it's again, like this is, it's a weird conversation to have with somebody. But to me, like we've been talking about, this is why we do this work, you know, I'm all for money magic, I'm all for all of this other stuff, that's fantastic, and, you know, when there's giant life shit like this, yeah, these are the moments when I feel really super grateful that we do what we do, and we have this stuff available to us. You know for me, it, I was thinking about this a few days ago, how these practices become, at least for me, these shock absorbers. You know? It's not that it prevents shit from happening, but when it happens, it allows us to stay more oriented and more coherent than we would be otherwise, and, you know, then if that extends out to the people around us, then we can help them get or maintain a better sense of coherence and orientation, and that's a pretty remarkable thing, to me. ANDREW: I think it's such a significant point of view, right? Because so many people lose faith because they do stuff, religiously or spiritually or magically or whatever, and then some life thing comes along and they're like, “why did this not get prevented?” Right? You know? And then they falter because of that, right? You know? Like I remember, a day and a half before my second brother passed away, I was divining with the Orishas, right? And I came on this really bad sign, right? Basically, a sign of unexpected things and tragedies that shake your whole world all the way down to your foundations, right? And so, I did what I do when stuff like that shows up. I basically called all the people who are important, you know? And I knew that he was going through a hard time, and so I called him, and I was like, "dude, come to my house, come over here, you know, I know you're out doing whatever, but, like, come over here, you know, after work, come over here, I'll come pick you up, come over here," right? And he decided not to, you know? And then that, ultimately, that decision that he made led to his passing, you know? And you know, there are these flags that I think that are there that warned that something's coming, right? You know? Like, gird your loins, put on your armor, get ready, shit's going to get shaken up, but it's rarely ever as clear cut as anything else, and to me that doesn't diminish my faith in these processes, because the warnings and the advices of that reading carried me through that time in a way that I could have been, it could have been so much worse for me, without that, you know? So. Yeah. AIDAN: Yeah. It was interesting, when I went out to Athens, I took out a deck of cards that I had just got and decided I was going to take that with me, to be my thing, and I'm not a big diviner, I don't, if I do a reading a week, that's a lot for me. And, as I was moving through, whether this was on the plane, or off by myself getting dinner at some point, and there was a sum process coming up, I would ask the cards to show me what would help me. ANDREW: Hmm. AIDAN: It would give me these readings that I would interpret in some particular way, at that moment, and I would invariably be completely wrong, but having that information in my head, and expecting things to go a particular way, was like the most perfect "assistance" I could ever get, which was what I basically had asked for. I didn't say, "what's actually going on?", I said, you know, "what should I have in my head, or in my mind, going into this situation," and they would give me something, and that was an incredibly useful tool, it was very, it wasn't accurate to what events actually happened, but it was totally dead accurate to what attitude I should approach each of those situations with. And so, I do think it's very interesting, that, I talk a lot about the biggest issue with magic is our kind of limited perceptual abilities. It's like... And when we're first starting out, that can seem like we're totally disabled until you kind of figure out how it works for you, you know. But I totally see that side of it. It's becoming more able to communicate or understand communication, even if it's not perfect. FABEKU: Yeah, I think that's an interesting point. I think that, you know, I, to me, that goes along with this thing that, cause I, I do divine a lot, like that's kind of one of my things, and I think since starting that, well, since starting it and fucking up a lot and misunderstanding and misapplying things, since then, my thing has been, how do I continue to expand my bandwidth for this connection and this communication, whatever it is, particularly around blind spots, things I don't want to see, difficult news, outcomes that aren't what I want, you know, times that I've misunderstood something and then shit goes totally sideways from that, you know, how do I expand my ability to stay connected and stay in communication when those things are happening? Because to me that's when it really matters, right? I think that… AIDAN: Yeah, absolutely. FABEKU: You know, if just suddenly, if we use that bandwidth and it goes dark, what then? So, for me, it's, you know, how do we, how do we keep that capacity as full and accessible as we can, when we really need it? You know. I think that's, it's not easy, but I think that's pretty critically important work. AIDAN: Yeah. ANDREW: Yeah, that's kind of, you know, I used to do a lot of readings about life and the future and whatever, and I still do when I'm planning and stuff like that, but, like, my regular readings, which are like, maybe two or three times a week these days, are: How do I keep myself in the zone? How do I get back to the zone? How do I move out of this sort of out of sorts-ness that I'm feeling back to being centered and grounded and aligned? You know? AIDAN: Yeah! ANDREW: And that's like, essentially the question, as much as there is a question, right? That's the question, and that's always the question. It's not really about anything else or anybody else or whatever, it's like, what do I do internally, to, you know, to be in, like, full on mode today, or as close to full on mode as possible, you know? AIDAN: Mmmhmm. FABEKU: Yeah. I get that. I like that, that idea of, you know, what do I need to do to stay aligned? And I think that's the thing, I think a lot of times it does come down to asking better questions, right? Because I think probably the last significant experience I had with that, about a year and a half ago, I had surgery, and, it was supposed to be, kind of a not, I mean kind of a big deal but not a big deal, and, you know, before I did some divinations with it, a couple of people did some divinations for me, everything was fine, all good, in and out, easy peasy, don't sweat it— That's not at all how it went, right? Everything that could have gone wrong did, and then some, and it was crazy. It was, it went sideways in ways that really could have been incredibly catastrophic beyond what it was, and as I was in the hospital thinking about this, you know, I think it could have been easy to, like you said, Andrew, get pissed or kind of lose faith, that wait, I read this, and other people read this, and everything was supposed to be fine, and I almost fucking died, like what's the deal? ANDREW: Yeah. FABEKU: But instead where I landed with this is, what if I had asked different questions? What if I had asked better questions? Instead of, you know, "what's the outcome of the surgery?" but instead like you're saying, "how do I navigate this?” You know, “what do I need to do to move through this in an aligned way?" That would have been a different thing, and I think it would have been infinitely more useful to me, in that moment, than the questions that I had asked on the front end, because I was super anxious about it, and so I think that led me to asking questions that were, I think, reasonable, but probably not the smartest and most helpful questions that I could have asked. ANDREW: The "tell me it's all going to be okay" reading… FABEKU: For sure, absolutely. ANDREW: ...Is 100 percent human and like we all do it, right? Like, but yeah, there's a lot more to kind of say, than that, maybe? And, I also think though, like, you know, when you, one of the things that happens when you divine, with, like, the Orishas and stuff is, in many situations we ask if the reading is closed now, are we done, right? But we don't say, like, is this perfect? You know, we don't say whatever. We say a phrase that essentially translates to "has everything that needs to be said been said?" Right? Or "has everything that can be said been said?" Right? And it's like, that's it, right? Did we miss anything? No, we covered it all? Okay. And then beyond that, it's inherently not part of the conversation or it couldn't have been part of the conversation, you know, and that's an awkward thing to accept in the beginning for people, I think, right? FABEKU: For sure. ANDREW: They want perfection of their spirit. FABEKU: Yeah. AIDAN: I think it also sinks in, there's a, I think it's at the end of Njáls saga, there's this really incredibly graphic vision of the Valkyries as the weavers of fate, and they're weaving in bloody intestines, with like a head as the weight, and spears as the shuttle rods, and beating it with spears, and this is after this whole book of lots of really violent death. And one of the things that I got from that was that they're really saying like, you know, our obsession with fate as humans is always about the survival of the body. We try and, you know, unless we really move to somewhere else, and they were basically saying, this is all blood and guts, here in the body. This is where it goes for everybody, right? And so, I do think that that approach that both would be given that you were talking about Andrew is, it's what I'm learning with divination, is, that's where I get good help, is: “Yeah, show me the face that I would put forward to walk through this next room?” ANDREW: Yeah. AIDAN: And I get really good information that's hard to describe, but, oh, yeah, I know that guy, right? You get used to your visitors in the cards, and you go, I know that guy, I know who I am when I'm that guy, and so I can try and approach this, like...that guy. Or I can look for that woman. Like who's fulfilling that role? And then I'll listen to them. You know, it's usually, it's very frequently that the cards tell me that I should pay attention to the next thing that my wife says more than I might want to. [laughter] ANDREW: That's the challenge of living with an oracle, right? AIDAN: [laughs] Absolutely! ANDREW: Yeah. FABEKU: Well, and I think what's interesting about the conversation is that when we move to the place where we're asking questions that are beyond our own sort of vantage point or unlimited concerns, and I think we open it up to get answers that not only come from that place but that can move us past those places, right? If my focus is only, “okay, tell me everything's going to be okay,” that's a very brief and kind of limited conversation. But, “how do I navigate this?” That moves me past that, and I think it makes us available to the inside perspective, ideas, whatever it is, that we're not going to get if we're asking those questions that are more limited and kind of in the box. ANDREW: Yep. Well, and let's be honest, from the point of view of the universe, the sun going supernova is okay, right? FABEKU: [laughing] Exactly! ANDREW: It's all okay, there are other suns, there are other universes, there are other whatever... FABEKU: Right. Yeah. AIDAN: When I was going through a super rough spot, about ten years ago, my mom sent me a card that I always loved that said "everything will be okay in the end; if it's not okay, it's not the end!" [laughs] ANDREW: Yeah. AIDAN: I mean totally, like yeah, it's okay, you knew you weren't going to stay here, so what's the issue? ANDREW: Yeah. AIDAN: Mmmhmm. ANDREW: Absolutely. Well, you know, it's interesting, I mean, so, in thinking about what I might want to share about kind of what's been going on for me in the last stretch of time, it's interesting how thematic it all is, right? So, one of the big things of my last year, was my mom had surgery, she had her hip replaced back in August, and then she, three days later, fell and shattered her femur, right? And so, in December, she went home after spending four and a half or five months or whatever it was in various facilities kind of getting tuned up, you know? And, so it's been this journey of like watching her go through these things and, you know, watching her go through these things, where it's like, you know, she's no spring chicken, she's my mom, so she's got a few years on me, and it's like, this could be the end, this could be the moment, right, and kind of as we were talking about sitting with that squarely and trying to look at the real reality of these situations… So, you know, that's been going on, and then the other thing that has been sort of flowing with me a lot, is you know, Saturn and its retrogrades, and its switching into Capricorn, and all of this astrological energy that's been going on has been something that I've been really feeling intensely. You know, I mean, over the last while, for sure, being a Sagittarius, and you know, it's now left my sign and so on, but also, this transition to Capricorn, whereas other times I've been like, “aaah, I don't like you Saturn, you've fucked me a lot,” this time I was like, you know what, I was listening to, I think it was Austin Coppock and Gordon White talk about it, and he was just like, throwing out lists of things that are positive in this kind of placement stuff. And he talked about, like, the dead, and stuff, and I was like, yeah, that's really where I need to kind of sit with my energy, you know, and step more into working with that and living with that and feeling that, you know? And it's just very, it's a carry-over of all of these things we've been talking about, right? It's kind of taking ownership of my relationship with the dead and with death itself, but with the dead more so, and how foreign that is to kind of almost anybody else that I know, you know what I mean, like, even people I know who are mediums, I feel like, I feel like often it's not quite the same. You know, I was writing about it one time, a while ago, and I was like, what is a good word for the magic that comes from a deep love and devotion to the dead, and from their reciprocal love that comes from there? You know, and I don't have a good word for that, but, you know, there's just something very particular about what's going on these days. Later today, as part of kind of culminating a work that I started at that transition of Saturn into Capricorn, I'm going to sort of finish making the shrine pieces that I started consecrating then, so that I can continue to do this work and stuff, but it's very apropos of this conversation, right? This sort of life and real like life and death stuff, right? You know, and, kind of like our conversation, I might go to this work for prosperity and I might go to this work for other things, but it's really about living continuously in some form of connection and awareness of that mystery, and sort of constantly honoring that mystery, cause ultimately it's one we'll all be initiated into, but yet it can also be such a source of power and life while we're alive, too. So. AIDAN: Yeah. ANDREW: Yeah. FABEKU: Yeah, you know, as you're talking about that, it reminds me, and I feel this a lot, and I don't think I had words for it until I just heard you talk about what you did, but when I'm doing magic, especially certain kinds, again, especially work with the ancestors, there's this intimacy to it, right? It's like it feels like there's this very direct, intimate, uniquely personal at the same time kind of big and cosmic intimacy that's happening through this interface, right? It's like this direct interaction with these things that are really at the core of being human. Again sure, you know, money, sex, relationships, attraction, all of that, human, right, but if you strip all of that away, the end of it, there's life and there's death and there's love. Right? That's what's there. And when we're engaged in these practices where we're working at that foundational level, there's this incredible profound intimacy to it that I think is pretty remarkable. Yeah, and I don't think I had the words for that until I just listened to you talk, Andrew. AIDAN: That's one of those... And that's an interesting thing, I was doing work with Fabeku the last two years, where this thing, this kind of connection with the dead and communion with the dead and being a part of this structure of these, like the creatures that I, or the beings that I met, the allies, the sisters. Where the thing that happened right before Ash died was that they basically brought me into their thing, like they really are, I don't know if I have a better description, they're a collective, but I think of them as like hive beings. And, when they brought me in, the thing that was so interesting was that from their perspective, how beautiful this stuff is, that they're like, “yeah, you guys do this other thing, in between when you're dead,” but it's this transition in and out of when you're dead that has got all of this potency and all of this beauty and where you don't have all of the, this kind of weight of inculturation on you… ANDREW: Mmmhmm. AIDAN: ... was how I interpreted how they were kind of running through me. And I think that that has to have been a more normal perspective that somehow, we kind of, and maybe this is just as we kind of figured out how to not lose half of the children or something, you know, and we're raising an expectation that barring something weird, you make it to a reasonable age or something. My sense is that if you're in a whatever kind of hunter-gatherer tribal thing, that vision of death has to be so different than the one that we carry now in 2017 America, and that's a bit of what I've felt has been going on with me the last couple of years as well, has been this really strong connection to this, like this is the, it's a thing I don't think I could teach much about, you know, but... ANDREW: Mmmhmm. AIDAN: ...it's the most important aspect of what I do, I think, is like... ANDREW: Yeah. AIDAN: I go into and spend time in, and they show me all these things that I genuinely have no words for, but that are really natural normal things. Yeah, it's fascinating. ANDREW: I had this dream, oh, maybe six months ago, where I was up on this high mountain range, like maybe in the Himalayas or somewhere, and I was in a graveyard, and there were these three eternal beings that were there. And I was there because, in the dream, because I wanted to be initiated into their mystery and under- and know what they know. And they basically said, “well, you've come all this way, all you have to do is give us the sacrifice, and we'll initiate you.” And then, what they asked me for was to surrender everything that I have ever known, or everything that I knew, and get rid of it. And then they would welcome me into their mysteries. And in the dream, I reached into my body and drew out this little blue box that was the sum total of all of my knowledge and knowing, and I gave it to them, or put it on the earth, and they accepted it and then proceeded into the dream further, so. I think that there are these really, places that inherently transcend our knowing, right? Or at least our knowing in a conventional sense, for sure. Well, so, we did as we usually do--oh hey! [musical entrance] AIDAN: Streaker! JEN: Hey! [laughter] JONATHAN: That felt dirty. ANDREW: So, for those people listening-- JONATHAN: Put your clothes on, Jen! ANDREW: We were chatting and joking around in the chat room about Jen streaking through our performance here, and I thought, how funny would it be, to have Jen just jump in for a minute. So, hey Jen, what's going on? JEN: Hey! FABEKU: Hey, Jen! Holy shit. JEN: Yeah... AIDAN: Awesome to see you. JEN: Good to see you guys too. ANDREW: Yeah! So, we've just been talking about death and super heavy stuff for like a long time, so what's going on, what have you got, you were going to bring a question in. JEN: Well, there was one question I had for Aidan. It started on his little request for questions, but it was about, like any advice or stories working with plant or animal allies. I see a lot of things sort of being appropriated of, you know, my spirit animal is this, my power animal is that, and it makes me wonder, like, you know, did you choose that because you happened to like that animal, or what? you know and so maybe just stories about your experiences with this way of working. AIDAN: Mmmhmm. Well I have two that are kind of relevant, and the first one is from a long time ago. And my girlfriend and I were up at Mount Shasta where many weird things have happened for me, and this was early on in my meditation practice and I was probably, I think I was 20. And it was super beautiful, we were up in the meadow up on the mountain, and I just went and found a rock out in the sun and sat down. It was sitting kind of like, this was before I could sit full lotus, so somehow crosslegged with my hands on my knees, and I'm sitting there, and I space out, and I can feel like this pull, in like two totally different directions, I've got my eyes closed, and I couldn't kind of translate what was up about this pull in two different directions and what, when I opened my eyes, I looked down, and one of my hands, and I don't remember which one any more, has like five of these big blue butterflies on it, and the other one has maybe 25 flies on it. There's like no cross-mingling. They're not doing anything. They're just hanging out. And I must have spent a half hour with them and they never switched places and nobody ever left until I was gone. And they were, all of the other butterflies that you could see were collecting all the salt and sweat off my skin, I couldn't really tell what the flies were doing. And I've never known anything other than that, it was just, this was this thing that happened. And it was one of those events that changed things, as most of the Shasta events did for me. And then, I think, I don't know, I mean, I laugh at my spirit at the kind of idea of spirit animals because my deep ties into non-asatru kind of freaky shamanic Odin stuff have me always and always have had me working with wolves and ravens. Which are like, super cool, right? And so you go, that's just bullshit, if I was viewing them as power animals. But as you know, cause you've got the book, there are these forms that I've learned over time to shift into in the trance world, and they just allow me to have different perceptions of what's going on. And so, that's my main experience with it is that I have these shapes that I can shift into, that like if I'm getting freaked out by something, if I move into the kind of raven shape, its perspective of what's going on is utterly different than mine. It doesn't have this human view, it doesn't have human concerns, and the same thing with that kind of wolf form, and this has kind of been breeding a lot in the last year or so, where, I'm not necessarily anything like a human now when I'm in the other spaces. And it just allows a lot of freedom that is lacking other times. But I don't have, yeah, the whole idea of the spirit animal thing, I don't really get that, I don't know what that is. But I think you can work with those shapes or at least I can work with those shapes. In ways that are very beneficial. ANDREW: I don't really, I mean I also don't really work with animals in that kind of way, or maybe I do and just my way of talking about it doesn't line up so that I recognize what other people are talking about as being the same but maybe it is the same. But you know for me there are these things that happen that are really significant, you know, and so I was out in the woods and this albino turkey came out of the woods. Completely white, right? And like it came out, it hung out, and we were like sort of five feet from each other and we sort of had this exchange where aside from where I was like, "holy shit, this is a really weird bird, what is going on here?", once I settled in and figured out what it was... 'Cause it was really big, right? Turkeys are not small animals, right? Especially later in the summer, right? And I was just like, oh, what's going on, and so I connected with that very intensely and then there was another time when I saw an albino porcupine and that was very intense, and then the only thing that ever sort of segues into me feeling sort of more a lasting connection with them versus sort of like a message connection is, I had this dream that everybody was freaking out because there were fishers in the woods, which are these sort of wild and ferocious animals, you know, they're known for like eating cats and other stuff and are considered fairly dangerous. They're sort of the honey badgers of our part of the world, right? JEN: [laughs] ANDREW: And in the dream, I was like, don't worry, they won't bother me, and I went out and I just sat down and this albino fisher came out of the woods and curled up in my lap and sat there and we just hung out. And then a few weeks later, somebody who knew nothing about the dream gave me a fisher skull, and so, it's one of the few skulls that I keep around to stack. But you know... AIDAN: [laughs] ANDREW: But even that became part of work that I do with another spirit, which is actually the spirit of a person who has passed on and it's sort of, there's a connection there, it's sort of an avatar of that person, as opposed to necessarily being the animal in and of itself, so. JONATHAN: I actually got my spirit animal from a-- can you guys here me now? ALL: Yeah. JONATHAN: I actually got my-- I was named, and was told at the time what my spirit animal was, by a Lakota Sioux medicine woman. So that's my lineage on that, and I've had that verified by people that didn't know me, later in life, of the total number of people that I walk with, the spirit that I walk with, and the animals that are around, so I kind of believe what she says, you know. I work with him a lot, and not really, kind of like what Aidan was saying, really ask him to do things or handle things for me that I can't, or that I don't know how to handle. Or to work with me on shapeshifting and stuff like that; however, ironically, I laughed when Aidan said wolves and ravens, 'cause I do the same thing with both wolves and ravens, is I do a lot of shapeshifting with ravens because of their perspective is higher than mine, so I can see it from a different level. And it's just fucking fun, so, that's just kind of my, that's how I've always kind of worked with animals, it wasn't really so much as they guiding me but kind of just walking together, now, just kind of living life and learning from them, 'cause they have so much information, if people can actually just do it. [laughs] Did you know that wolves can talk? [?] Oh yeah! [?] Hey my door's knocking, hold on. JEN: [laughing] Maybe it's a wolf! ALL: [laughing] JONATHAN: Probably should, tell me to get off the phone... [?] Albino porcupine, you keep your distance! JEN: Right? FABEKU: So, you know, I guess what I would add to it, I think, I get what you mean, Jon, when you're saying things get a little appropriated at times. I think really what I would say, this to me goes to the necessity to do our work and to deal with our own shit, I think in any of these practices, 'cause, I think for me, some of the pieces that feel problematic around this, they're, when I hear people talk about it, it feels very utilitarian in a way that the element of relationship seems missing, right? It's kind of like the way people would talk about a tool. Like, you know, I'm gonna do this with a hammer and I'm gonna do this with my spirit animal, and I get that, and I mean listen, people start where they start and it's fine but I think that you know, for me, it becomes problematic when we look at these things as tools or objects, right? Like for me it really is like, where's the relationship? how do I more clearly relate to them? And I feel like if we relate to them as things or tools then I think at best it's a really limited thing and at worst it's probably I think it moves us into almost working with some kind of distortion or echo of the actual thing, right, because we're not really, there's not a clear and real relationship happening, so I think the utilitarian thing is weird and I think the other element of doing the work is, you know, I think that, I know a lot of people that have come to these practices as ways of filling holes in themselves, and maybe not so consciously, so the fact that everybody seems to have an eagle as a totem, and kind of the same way that like in a past life everybody was a king or a queen or whatever the fuck. It's like yeah, probably not... JEN: Cleopatra, usually, always good! FABEKU: So I think, it's like... ANDREW: Jonathan Emmett was the one true Cleopatra, so we know that everyone else... FABEKU: That's been covered, right? But I think the thing is that if we don't deal with those gaps and those holes and that shadow and that pain and we end up filling them with things that are probably not accurate or not really there, and then we start basing a whole lot of shit on top of it, and to me that stuff becomes really problematic. So, this, really I guess my contribution would be, you know I think we just have to be conscious of and then clean up our own shit before we drag it into the practice and then start mistaking that for some kind of spiritual or magical reality that it probably is not. So. ANDREW: Yeah. And once we've built some structure up then it's really hard to knock that down. FABEKU: For sure, yeah. ANDREW: ...work at it, right? And so. But. Yeah. AIDAN: Yeah, I think that, that's kind of, to me, if you're working with kind of a spirit view and a spirit world, for me the biggest thing was to just slow the fuck down and like go, okay, if I've got somebody that's talking to me, that's good, I don't need to go hunting for sombody else and I can see, will this person talk to me about other things, or will they introduce me to other things? So even like in the, in my, the main zone that I go to when I'm doing trance work, the allies are like, the first allies that I met are like intermediaries, and they're like, there's stuff that doesn't move around and so, if you don't go to where they are, it doesn't matter how much you call to them, and so if I roll in, and I get the ally that's not being particularly helpful but that's hanging out, it's like, okay, would you like to take me somewhere else? And they're like, finally, dumbass! And then I can follow them and they'll be like, "go into the scary fucking cave," or whatever it is that's going on. And that's the , but that's about time, and depth, but I do think that there's the, or even the idea that I'm going to travel through different space and ask to meet the allies there, that might take a long time. There's a space that I go into now, that's finally opening up, and it's like, this has an animal in it, I forgot about it, and there's this big-assed elk thing, that could give a fuck and a rat's ass about me, and I show up, and it just looks annoyed, like, oh, it's you again. It's like dude, whatever, if you want to open this up a little bit, that'd be cool, and it's like, not now, later. ANDREW: Yeah. AIDAN: And that to me is the stuff that I get, we've talked about this a little bit before on here, with the four of us, is, if it's all running super smooth and like clockwork, it's probably not super real, Or, there's [inaudible] that's creating myths, 'cause to me, it's like, it just doesn't go that way! And I could be fucked up, I could just be a mess, and... JEN: Well something that motivated my question was in northern California around 2010 I went to a find your power animal workshop, which was a lot of drum trance journeys and when we went in, to find our power animals, I got buried in ivy for 15 minutes, there was nothing, and everybody was having these stories and they were like, yeah, and then this elephant took me to the bottom of the ocean, and a squirrel, and then landed on the back of a tiger, and then we had this unicorn that was in space, and it was like, uh, I was buried in an ivy, with nothing, and they're like you have a power plant! And I was like okay, power plants, and every other journey I was actually working with plant allies and not animals, and I was the only person there, and I was like, and lots of intense things were happening, but it wasn't an animal, it was like, and it surprised me, because everyone had these fantastic creatures, and it was like " I just got the plant kingdom," you know. [cross-talking] FABEKU: What I think's interseting about that, and this is when I talk about, and I talk about it more of like allies or the others, right, because I think that like, the languaging, and we were talking about this earlier in the conversation about the kind of the questions that we bring to divination, like, this is where language becomes problematic, right, because people usually talk about power animals or whatever it is, fine, but there's a million other options for allies, right? Plants, stones, weird alien creatures, that as far as I can tell aren't here, and but when I've had conversations like that with people, sometimes they act really surprised, like what do you mean, there's a plant person that you work with, or a stone person, there are animals! And it's like well, okay, AND... ANDREW: Can't go wrong with a magic space pickle! FABEKU: There we go! I claim that as my ally, the magic space pickle, right? But... ANDREW: Yep. FABEKU: I get that, I think that sometimes we create these kind of needless and unhelpful limitations that really shape our experience because of what we bring to it that okay, I'm going to go meet an ally, and they said power animal so it has to be a power animal, I think that, I don't love that, I think that that stuff gets us super sideways, so when we end up with ivy, we think, what the fuck is happening, right? Like it's somehow a problem that it's really not, so. ANDREW: Yeah. And really like, you know, what if it's burdock, or what if it's, you know, plantain, or what if it's like, some other sort of amazing magical plant that's in your neighborhood that's like the weeds that grow in the driveway in the lane weights, right? That doesn't mean that it's not profound and magical and powerful and a lot of the plants that I work with are, if they're not Afri-Cuban stuff that I'm working with for part of my religious practice, they're predominantly things that grow here or that I grow myself and you know, there's, to me there's some of the most wonderful magic is like being able to go out in my back yard here at the shop and be like, yup, a bit of this, a bit of that, pull this guy's roots, go down to the ravine, dig up a litle of this, grab this out of the swampy spot and next thing you know you've got something good, and I mean I think that there's such a, and not an origin, but there's such a cult around like, mandrake, and like all these sort of, the witch herbs, and I'm like, those don't grow here, those aren't my plants, those aren't part of my orbit, you know, and I remember not so much in recent times but like when I was getting going, kind of having some feels about some of these things that everybody else was doing and working with and I'm like, nah, I don't think so, I think I'm gonna work with the basil some more, I think that plant's really kicking it up for me, and it's like, you know, it doesn't have to be everything else either, right? And ivy's great, right? That stuff overcomes everything, right? That'll rip your bricks apart if you allow it to go too far, right? That's pretty strong. FABEKU: One of my favorite magical plants is kudzu, love it. Never met it until I moved to North Carolina, it was all over the fucking place, and I was totally taken by it. We were driving down the road and I was like, what is that? and the person that we were with was like, "Oh, fuck, it's kudzu, it's terrible, it's this," and I'm like, no, there's something to that plant, and I literally wanted to stop on the side of the road and walk over and just touch the plant to figure out what the fuck was going on. I super dig kudzu for magic stuff. Super dig it. And, I think to get to that place that you're talking about, Andrew, I think that this goes back to we have to clean up our shit, irght? Like if we don't feel like enough and we feel like it has to be big and weird and exotic and flashy, we're not gonna say, I'm working with kudzu! It's gonna have to be mandrake or you know, whatever it is, and so again, like you said, not that those aren't powerful, but if we're led there because there's coherence, cool. If we're led there because we're trying to fill a hole, and mandrake feels like an easier plug for it than dandelion, not great. Right? And I can't believe we're conna end up kind of skewed and sideways as a result of it. and, not only that, but missing some really powerful that otherwise, we could build relationships with these allies and do some pretty amazing work with them, so. AIDAN: I think that that sinks in really kind of beautifully to, yeah, it's like we're enculturated to all sorts of things, just as the nature of being social humans, and so, for some people that's, you know you know, I guess, you know that you are meant to be with the head cheerleader from the time you enter sixth grade, and you know that you are going to have this particular life, which shuts down all of these options, right? And this happens in spiritual practice all the time too. This is to me the kind of beauty of chaos magic and also where it goes horribly awry, is to me the idea of chaos magic is like, you don't have to know where this is going. You don't have to be looking at what happened in the 1800s or in the 1500s or in 900s or in the written record. If this is a natural practice, which is why I dislike the term occultism--occultism seems to me to always be kind of referencing things that are hidden, when I think most of it's like shit that we just forgot how to do. Nobody hid it. But yeah, and then there's just all of this possibility. The most powerful thing that I've been given is this weird little nine sentence charm that changes all the time, and it's peculiar, and it sounds really really witchy, but it's also so retardedly, "The Craft," or something. JEN: Oh my gosh, I want you to say it... AIDAN: I can't take it seriously, right? JEN: [laughing] AIDAN: But it does this beautiful thing, and it's like a joke, I think, from my allies, like they've given me this coded language, like this is how you get from here to here, and every time I go to do it, I'm like, this is so silly, it's like, and it's being open to this stuff, and realizing that these are language systems that we're overlaying upon experience that's not happening in the body in the normal sense, and so doesn't really exist. And so yeah, you go into the other world and you meet the space pickle, why not? Who... You don't think that that didn't happen to somebody before, just because it isn't written down? We've been here for a long fucking time, somebody has had serious relationships with the spirits before. There is no doubt. ANDREW: Lucky, lucky somebodies! JEN: Head cheerleaders! AIDAN: And it's probably Jon... ANDREW: Uh-huh. [laughter] FABEKU: When in doubt... AIDAN: Nice! [laughs] ANDREW: Cool. JEN: Well, thanks for letting me crash your party for a minute; I'll... ANDREW: Thanks for jumping in, Jen! AIDAN: That was awesome! JEN: I'll end my streak now. And let you get back to it... [?]: Whew.... JEN: See you guys later! ANDREW: See ya! AIDAN: See ya! ANDREW: All right, so we have this list of questions here; I feel like some of them we've already kind of touched on. You know, I mean, yeah. So, I guess, KJ Sassypants wants to know, what's the weirdest or wackiest thing that's ever happened to you in a magical or shamanic context? I'm afraid to ask Jon... [laughter] ANDREW: Anyone got anything that you'd like to share? We can't hear you, Jon. Jon, I see you talking, but I don't hear you. [laughter] FABEKU: While he sorts that out, yes, weird, god, where do I start, shit! So, a couple of weeks ago, I did some like hunting tracking magic stuff, right? It was very specifically like had my eyes focused on a very specific target, and -- so for me, after I do work, I'm usually paying attention to , you know, just what's happening in th world, sort of looking for omens and signs and confirmations and things-- and I was sitting at the window, with the cat, looking out, and, all of a sudden... So there's this family of hawks that lives maybe 100 yards across the street-- This was just within a couple of days of doing the magic-- All of a sudden, out of the tree, like a fucking bullet, this hawk flies out and catches some small bird mid-flight and literally rams it into the window that I'm sitting in front of and then flies off back to the tree, right, and I'm like, well, you know, as far as omens for hunting magic go, that's sort of terrifying and pretty rad at the same time, so, um yeah, it's probably not the weirdest, but the most recent bit of weirdness, that's for sure, so. ANDREW: I -- I can't hear you now. AIDAN: Try, Jon. You got it! You're good! JON: That was it? AIDAN: You're good! You got it! JON: Can you hear me now? ALL: Yeah. JON: Okay, was that the question about the paranormal, when I said could I use the paranormal reference? ANDREW: Sure! Use whatever you got! JON: Okay. So the weirdest probably thing, I was doing a reading on a house in Carthage and we've had -- hi, kitty -- we've had some instance of a pretty dark entity -- I don't like to use demonic because I think that's a bad word, and I think it's wrong -- more of just probably not ever human, type entity, anyway. So, we're doing an investigation one night, and we had a group there doing a tour, and I spotted this entity, 'cause it likes to hang out on the stairwell, and, so I'm trying to coax it down and to come talk to me, like I wanted to get it to talk-- well, it did. And pretty much threw me for a loop for about, I don't know, six months. To where I was a little bit off my rocker for about six months. And honestly, the you know I, it engulfed the upper part of my body, to where a person two foot away from me couldn't see me from the waist up. And, I still couldn't tell you what it was. I can tell you that it never was alive, I know that for a fact, I know that it was never in corporeal form of any sort, but yeah, I walked out of the house, I had to get away for a little bit, when it lifted, and I was freed from it, for lack of a better word, I walked outside, and I sat down on the ground, and I tried to ground as best I could ground, but I was not entirely in my body for at least 30 minutes there, but mentally it was a trip for probably about six months. So, it was a little bit of an interesting deal, but what brought me back into my body was kind of a funny story was, there's these big, not cedar trees, juniper trees in the front yard, they're huge, and I put my hand up on the juniper tree and an ant bit me, and that popped me back into my cells, so it was kind of an interesting, interesting ordeal. But yeah, I still couldn't tell you what that thing was. But I'd like to go back and work with it, but the last couple times I've been there, he hasn't shown up. So. ANDREW: Maybe it's following you around, Jon. JON: Boring ass-- ANDREW: What's that behind you? [laughter] JON: No, that's a cat! [laughter] Probably. ANDREW: I mean, so many things, but like, one of the things that I often do is like, if I'm doing certain kinds of cleansings for people, I'll take the tools and pieces that I've used in the cleansing, and I'll take them into the ravine system here, you know, and there are spots where I dispose of that stuff so the spirits that are there, and the earth that's there can just take that back and it can go away, and not just pass on to anybody else, and so, it was frozen, like stuff was frozen when I was there, right? And it was sort of, freezing rain and snow was coming down, and so I went down into the ravine and you know it's like this, we live in a big city, right, so it's like this lit path, and I go off of that and off into the hills and the woods around there a bit, and to the spot where I go and get rid of stuff, or one of the places, and it's all fine, I do the work, it feels fine, and I turn around to leave, and as I'm walking out, this like two dozen white moths emerged from somewhere and followed me, like they were just around me and they just emerged even though it was freezing out, and they followed me as I walked out onto the path and stuff, and they followed me along the path for a ways, before they sort of drifted back off into the woods, and it was one of those things that when they were gone I was like, did I hallucinate that? What's going on? But yeah I took it as the success of the work and the spirit of the forest kind of clearing everything away for me as I was leaving, you know, but... What have you got for us, Aidan? AIDAN: There's a few to pick from, and I'm sorting to see which one is the most acceptable. Um. Yeah, probably my third, I think it's the third kind of major initiation that I had was the summer that Ash was conceived, me and his mom stayed up at a relative of her's house on the lake. And there was a, we stayed in a bedroom that was like the guest bedroom, it was up this stairwell, and this was like a really beautifully made but kind of cabin built place on this lake in Washington State. And we were there for quite a while, but I was out paddling around in the canoe on this little lake and I don't know what i did, but I knew at the point that I did it that I had upset the lake, and this is really a little bit before I got enough into magic to be thinking this way. I had some practices I was doing, but I hadn't kind of developed any world view where this would make sense until after this event, but. In some way I knew that I had pissed off the lake and I had best get home. And t

Guest Blair Enns gives us a look behind the scenes of creating his new book Pricing Creativity. Blair's Bio Blair Enns is a 25-year veteran of the business side of the creative professions. In 2002, he launched Win Without Pitching, which has worked with thousands of creative professionals in numerous countries through direct engagements, seminars, workshops & webcasts. Blair is the author of "The Win Without Pitching Manifesto" and the forthcoming "Pricing Creativity: A Guide to Profit Beyond the Billable Hour" Links Pricing Creativity Win Without Pitching 2Bobs Podcast Blair on Twitter Blair on LinkedIn Implementing Value Pricing: A Radical Business Model for Professional Firms The Curtis Creek Manifesto Transcript Jonathan: Hello and welcome to The Business of Authority. I'm Jonathan Stark. Rochelle: And I'm Rochelle Moulton. Jonathan: And today, we're very excited to be joined by guest Blair Enns. Blair is the founder and CEO of Win Without Pitching and the author of the Win Without Pitching Manifesto, and the forthcoming Pricing Creativity: Guide To Profit Beyond the Billable Hour. Did I get that right Blair? Blair: You got it right Jonathan thank you. Jonathan: Stressful :-) I am very excited and I [00:00:30] know Rochelle's very excited to have you on the show. We have just a lot in common, I've been following your work for years, we've read a lot of the same authors and we're super excited to talk about how you've taken this big idea, which to me started with the Manifesto, perhaps it had its roots before that, and turned it into a consulting business and then later a training business, and now hopefully, fingers crossed, a bestselling author. So, could we start off by just [00:01:00] giving folks a little bit of background about who you are and what you do now and then we can sort of delve into the history? Blair: Yeah, sure. And thank you to both of you for having me on the podcast. I'm really looking forward to this and happy to be here. My name is Blair Ends, the company is Win Without Pitching and I founded it back in 2002, early 2002. At the time, it was a consulting practice, a new business development, sales or new business development consulting to creative [00:01:30] firms, typically independent creative firms, and I had come out of about a dozen years of working in advertising agencies and design firms and thought I'd launch this consulting practice. So that was the first iteration of Win Without Pitching. And then over the years, beginning in late 2012, and I'm sure we'll get into this, I decided to shift the structure of the company from a solo consulting practice to a training company. So that's where we are now in late 2017, [00:02:00] early 2018. Win Without Pitching is about five years into its current incarnation as a training company. And for a few years; 2013, 14, it was both as I kind of played with training and had to make a decision about going one way or the other. So we've been a pure training company for about three years. It really feels like this business is about three years old, but really it's more like 16. Jonathan: Wow. And [00:02:30] before that, you were from the agency world, you were inside the agency world, yes? Blair: Yeah, I worked for some of the world's largest advertising agencies and some of its smallest design firms. I was a suit, I don't own a suit anymore. Although my latest social media profile pic has me in a suit. I had a borrow a tie from my 18 year old son for that photo and I own one jacket. But I was a suit for many years and then I moved to this little mountain [00:03:00] village in the middle of nowhere where we live now when I started the consulting practice. So there's this kind of shift in the personal life that was the impetus for the business change. And I had a Hugo Boss bonfire when I moved out here, got rid of all the suits. But I was a suit doing account services and new business at a very young age in the first ad agency I ever worked. When at I was 22, I was handed responsibility for new business. I wasn't great at it but I did have some natural skills at [00:03:30] it. So yeah, I came out of the account management and new business side of both advertising and design. Jonathan: Okay. So, how do you go from there to writing the Manifesto? Blair: Well, the Manifesto I wrote I think in late 2005, early 2006 so I had been running the consulting business for three or four years at that time. And the name, I think the of the business is kind of a fluke and I've been [00:04:00] told by some of my closest professional friends that, "Yeah, Win Without Pitching is a stupid name, you need to change the name." On some level, I think it is maybe not an appropriate, maybe not the appropriate ... There's something about the name that can sound a little bit schlocky maybe, like some sort of false promise, but on the other hand, that name has driven me to ... It's really a great label for how I've always thought about new business, [00:04:30] and it's forced me to come at the subject matter from that perspective that is really true to me. And I think that's really been the difference, whether it's been a consulting practice or a training company or a book that I've written, i's always coming from that win without pitching perspective. So the name came first, the business came first. And then in, I think it was, yeah, it was late 2005, I think early 2006, where I [00:05:00] was writing a piece. I've published an article, a blog post for years, for 16 years, either somewhere between weekly and monthly. And at the time, I think I was publishing closer to monthly. And I wanted something for the end of the year. So I tried on, I had this idea of like just wrapping up all of my philosophy into a few short pithy statements. And I was also trying on tone of voice. I'm a huge fan of Manifestos, [00:05:30] and I kind of collect them and I've read most of the big ones. I think the biggest, most important book ever written and religious people will be horrified at this, I think the most important book ever written might be the Curtis Creek Manifesto. And I won't say anything more about that, people can go look at it and think, "Huh? What are you talking abut?" Order it, give it to every 12 year old you know and you'll change the world. I was writing a blog post and it was trying on [00:06:00] a new voice, I was trying on a Manifesto voice. And at the time, and even for a few years after, it was the riskiest thing I'd ever written, just because the tone was so different. And I thought it was going to be taken as too over the top. Like it's almost the biblical [inaudible 00:06:14] We shall, etc. It's 12 proclamations, it's not chapters I imagine Martin Luther nailing something like this to the church door. So I was quite nervous when I hit publish. And then the response was really gratifying and inspiring, [00:06:30] because people were telling me that they had ... some designers that actually typeset it and put it on a poster and actually put it on their wall. And I kept getting feedback like that for a long time. So when it came time to write a book, and if you want to be seen as the expert in your space, then you probably should write a book. And I was feeling the pressure to write a book. But it didn't have a format, it didn't have kind of a narrative structure or I didn't [00:07:00] know ... Otherwise, it would just been a book of lists. And then I thought based on the success of that post, maybe I'm going to frame a book based on this. And I'm so glad I did. I'm really happy with this book, seven and a half years later. I'm surprised to say that I'm still really happy with this book. Jonathan: That's great. To have a shelf life it's that long, there's no reason it couldn't continue to grow. Nothing in it is really dated, it's completely ... Rochelle: [00:07:30] It's evergreen. Blair: Yeah. I set out to write a timeless book. And my intention for the book was I would create something that would outlive me. And so, there is nothing in it, as both of you point out, it's kind of evergreen content, there's nothing in there that will be dated. There's nothing about the design, the design looks like it was like dug up from a lock box and it could be from any time. In fact, one of the first things I did with this book, once I decided on the fact that it would be a Manifesto, is I [00:08:00] had to decide what size would it be. So I took a bunch of different books that I owned and ... I just had a sense of how the size of the book, so I took something that was the right thickness, but it was too large a format, and I cut it down. And I said, "I want the book to be this size." And this isn't the way books ... So I wrote to the size because I wanted a designer, somebody who maybe doesn't do a lot of in-depth reading, I wanted them to be able to read it on a typical plane ride; like on a two hour plane ride. I wanted [00:08:30] it to fit into a purse, into a laptop bag, on a toilet tank. And then so once I got the physical, I had the structure, this 12 proclamations Manifesto structure. And then I had the size, and then I hired a designer who when he's not doing his day job, he designs typefaces for Bibles. Jonathan: Nice. Blair: Yeah. I thought, "Well, for a creative audience, it either has to be really well designed or it has [00:09:00] to just be all about the words," and I wanted it to be all about the words. And I wanted it to be somebody who is fanatic fanatical about type. So I hired Brian Soy. His firm is called Aspire and it's not book design isn't their day job, but they do. In fact, they're just finishing up my next book, Pricing Creativity. But he's a nut about type. And I remember he came to a seminar I did in Miami Beach years ago, I remember walking down the main drag, is Ocean Drive, I forget, in Miami [00:09:30] Beach. And him just like pointing out all the art deco fonts and thinking ... in all of the hotels and buildings that we were going past. So the rest of us are in this conversation about something else and he's just going crazy over typefaces. Jonathan: Yeah. It's awesome down there for that. And it was a big success. It's how I heard about you. In fact, I know who told me about you, no, I take it back. So this is weird and this is, I think, perhaps [00:10:00] a source of some like infusion earlier, which is that I came across this as a blog post first. A friend of mine was, "Blair Enns, Blair Enns, Blair Enns." And he sent me a link to one of the, I don't remember which one it was, but it was one of the proclamations. And I was like, "Yes, yes, this is good. This guy knows what he's talking about." I didn't even realize for a long time that it was bound in any form. I was like, "Oh, this is just this free online thing," which I believe is still true. I believe people can still read [00:10:30] it online. Blair: You can read the entire book for free at WinWithoutPitching.com. Jonathan: Well, now I want the physical one. I want to feel it, put it on my toilet tank. Blair: Where it Belongs. Yes. Jonathan: So, you launched the book, and people are printing it out on their walls, I would count that as a big success. And I've seen a number of videos of you sort of giving [00:11:00] presentations, which I know came after that time because you reference the Manifesto in the talks. What was that, period? Do you do that anymore? Sounds like you're in a remote area now, so you probably don't. Blair: Yeah. No I do a lot of speaking. In fact, when my next book comes out on January 10th, I've set aside all of 2018 to just travel the world and speak in support of that book. And I didn't have, now that I'm the CEO of a training company and I don't coach or train in our program [00:11:30] anymore. I create curriculum, I work with my team, I take us into the future, I'm in charge of future value creation. I speak and I write. When I was a consultant, I wrote the book and it got me lots of invitations to speak already did pretty good on the speaking front. But it got me a lot of invitations to speak so I did a lot of lectures on the Manifesto around the world. But I was still running a consulting business. And if I'm not consulting then I'm not [00:12:00] sending invoices, and I'm not earning money. I've been fortunate in that I've always been paid well to speak. And what I get paid has increased over the years. I could probably earn a decent living just speaking if I wanted to. But the real money was in consulting. Now we're a training company and I'm not encumbered with that day to day training or operations of the business, I'm free to basically just go and speak, so that's that's a big part of it. And anybody who writes a book, what follows behind [00:12:30] that are a lot of speeches and nowadays a lot of podcasts interviews like this. Jonathan: I imagine it was tough. Well, was it a tough decision to switch from consulting to training or was it, you said you had sort of a shift in where you were living and the bonfire and whatnot. Were you excited to do that or was it scary, was it obvious? Blair: That was the scariest. I look the scariest things that you ever do, at some point soon after you look back on them and think, "Well, that was ... Why was [00:13:00] I so afraid by that?" But picking up our young family and moving to this little village in the middle of nowhere not, not really knowing how we were going to earn a living, that's how Win Without Pitching came to be, it was a necessity. I knew I wanted to kind of get out of the rat race of the city and the advertising profession at the time. Before I left, I was in a horrible job with a difficult boss, I'll say it politely, [00:13:30] and I was ruined for the advertising profession. And then, I was fired from that job, like I engineered my own dismissal, and that's another long story. I thought I would ... And I saw it all building towards a lawsuit. But as I was being relieved of my duties and handed my severance check, I thought, "I'm not going to sue you. I'm never going to see you again." After that I went to work for a really great boss and I was asked to build a satellite office. It had existed [00:14:00] but all the clients had left, to build the satellite office for another creative firm. And that was a great experience that that allowed me to fall in love with the profession again. But I had already decided we were moving to this village in the middle of nowhere, so I told the guy I was working for that I would do it for a year, a year turned into 20 months then I said I had to go. So we moved to this little village in the middle of nowhere and we had a bunch of little kids, we have four children. We had three at the time and the youngest was 6 months old. We had a fourth [00:14:30] a couple of years after moving here. So we were raising a young family and in the early days, Win Without Pitching, it was a lifestyle business. In the summers, it's a beautiful little village we live in on the shore of a 92 mile long lake, home to the largest strain of rainbow trout in the world. It's idyllic, it's as you imagine it. For years, I shared an office with a grizzly bear biologist and a bat biologist. So we really are in this beautiful little mountain village in the mile [00:15:00] of nowhere and it really was a lifestyle business in the early days. And then around 2012, my kids were at a certain age, they no longer really needed dad to be around a lot more and I was working more and more as a consultant. And in November of 2012, I found myself flat on my back with pneumonia in bed for two weeks and it was the fourth time that year that I had gotten some sort of sickness, just run down somewhere. And on three continents. So four times on three continents in one year, I just kind of run myself down as [00:15:30] I was trying to maximize this consulting model. And I had an epiphany while I was kind of recovering, I realized that my business model was trying to kill me, so I'd better kill it first. And that's what I decided to make the shift to. I decided to launch a training program. I recovered and I put together a 13 week training program, sent it out to my market, immediately sold it out. Then did another one, sold that out, did another one sold [00:16:00] that out. So that took me through to 2013. And then for 2014, I strung three programs together into an annual commitment, sold that out. And then I think by 2015 I decided that I couldn't do both. Now, I didn't come to the conclusion that a training business is better than a consulting business. Part of my journey was, I discovered value-based pricing and I realized that the way I was pricing my consulting engagements [00:16:30] and running my consulting engagements was contributing to kind of the stress on my health. I had productized my consulting services. You could do a two day session with me, which would cost X or could be like one day plus a bunch of remote consulting work. I'd package created three or four different packages and I'd put these prices on those packages. And everything I just described violates some of like my new rules of pricing. And I realized as I learned more [00:17:00] about value based pricing, I thought, "Okay. I either need to become a properly value based pricing consultant." By that I mean, I would look at every consulting engagement as a completely blank slate and dive deep into what it is that the client really wanted and how much value I could create, and then craft a really unique engagement that was specific to the client and the value in their situation and the value they were trying to create. So that every engagement would truly [00:17:30] be different and would be priced differently. If I wanted to earn the most money from those engagements, I felt like I needed to be able to say to my clients, "You know what, I'll get on a plane and I'll see the day after tomorrow." Because of where I live, it takes me a day to get anywhere. It sometimes takes me a day to get to an airport. I just couldn't do that. So I felt like if I couldn't properly value price my consulting engagements, then I really needed to go the other way and fully productize [00:18:00] my business. So that's the decision I made. I made the decision to go to a more scalable, productized service business and productized consulting business is a training company. So that's where we are today and it was really driven by the fact that I had kind of maxed out the consulting model the way I was doing it and I was a little bit limited by where I lived. And I felt strongly that I needed to go one way or the other and the easiest way for me to go [00:18:30] would be to go to scale up training company. I was talking to somebody in Austin, Texas about this the other day, somebody who is a consultant, and he was kind of trying on the idea that, well, maybe the evolution of all consulting practices is training companies. And I said, "Man, if I lived in Austin, Texas, I would be a consultant. I would not own a training company. If I had ready access to lots of different creative firms, where I could go in deep and help them more, I'm pretty sure in the short term, in the first five to six years for sure, [00:19:00] I would make way more money and have a bigger impact on a smaller number of clients." But I don't live in Austin, Texas. I live in Kaslo, British Columbia and it makes sense to build a training company. Jonathan: It sounds like, I don't know if this is just because of the compression of time, that we're compressing the timeline, but it sounds like there was a fairly high degree of certainty there based on a series of decisions that you made, particularly about moving, but it seemed like you were pretty clear on what to do, even though there was some fear. Blair: [00:19:30] Yeah I think so. I was doing a live podcast with my podcast cohost. I do a podcast called 2 Bobs. The number 2 Bobs with my friend and colleague David C. Baker, and we doing it live in London two weeks ago and in the Q&A afterwards, we were talking about how different we are from each other. He's very scientific in his approach and he said to me, he said, "You're not afraid of anything." And I thought, "Well, that's not true." But I get these ideas and I just will not be stopped. And I [00:20:00] think I've learned to lean into the fear. And if you know anything as you do about my selling approach, if there's anything uncomfortable in the sale, we teach well, lean into it, go into the dark places, embrace the awkward silence, say the things that the client won't say, the things that most people in that situation would not bring up. It's your job to bring it up. So I think I've learned that when you get these crazy ideas, lean [00:20:30] into them. As an example, I was a couple of years into both offering a training program and I was still consulting. And I was on a plane I was flying to Dallas and I, for whatever reason I decided, "This is my last. I need to pick one one or the other." I knew it was going to be training and I knew at some point it had to no longer consult. So I decided on the plane, "This is my last client." I walked into my client's office the next morning and one of the first things I said is, "I want [00:21:00] you to know this is my last client." And then I went on the plane on the way home I wrote a lengthy blog post called, I think it's called I'm Out. And I said to the world and nobody reads my blog because they want to know what I'm up to, they read it for the guidance. But every once in a while ... So I just published it for me. I wanted to make a proclamation to the world that that's it, I'm out of the consulting business. I'm not doing this anymore. Because I knew if I didn't say [00:21:30] it publicly, then I would probably start doing consulting again. So that's kind of the way I tend to operate, I come up with this idea and then I make this public declaration about what I'm going to do and then I think, "Oh crap, well, I guess I have to do it." Jonathan: Absolutely. You mentioned a couple of times Pricing Creativity, the new book. I have that thing highlighted to death. And I'm very much looking forward to talking to you about the pricing [00:22:00] details or the tools and the techniques that you talked about in there on my pricing podcast; Ditching Hourly. What appears about, in this context is what was your whole thought process about why to do this book, what your plans are for it, is this for you a 150, 200 page business card or is this something you actually want to see on bestseller lists as like an income stream. What are you thinking about there? Blair: Yeah. That's [00:22:30] a great question and I've found myself into some really great conversations about this. The Manifesto is the oversized business card. I refer to it as the Yes You Can book. I want people to read it, put it down. And as an early reader said in a review or somewhere online, he said, "I finished that book and it just makes me want to go wrestle a bear." So I use that line a lot. I want you to go feel like you can go wrestle a bear after that book. There's not a lot of how to end it. It meets a Manifesto, it's not meant to be a how to. [00:23:00] And the pricing book is a 50 ... so the Manifesto is just under 24,000 words, the pricing book is a 57,000 word manual. I wrote it as a manual, it's published as a three ring binder. There are different formats, you can get the ebook, you can get the ebook in the binder, you can get the ebook binder and four hours of video support. But I really wrote it to be like a desk reference, where you would read it once through, I hope it's enjoyable enough, that you can read [00:23:30] most of it through. And then, after that, when it comes time to put together your next proposal, price out your next proposal. I want people to reach out onto the shelf, pull it out, remind themselves of some of the rules and some of the tips, and then flip to the tool section at the back, and use those tools to actually craft their proposal. My vision is, this book will be on the desk or shelf of every creative professional in the world, who is charged with setting or negotiating [00:24:00] price. That is my vision. And I could have published it through a few different mainstream publishers. The Manifesto has generated a lot of interest for me from mainstream publishers, I could have published it that way. But it occurred to me, I'm looking at a bookshelf filled with about 25 books on pricing, and then probably another 25 on economics, most of them behavioral economics. I own all the books on pricing, and some of them have been so [00:24:30] transformative. Ron Baker has been such an positive influence on me on pricing. And the impact he's had on the professional world through his two books on pricing has been phenomenal. But I look at Ron's books and I think, "He should have made millions of dollars with these books." I know he's built a really lucrative career as a speaker, and I don't know if he does consulting or not, but as an author and a speaker, he has built a really good career. So it's not like he's not well rewarded, but I kind of value [00:25:00] conversation with the Global Creative Community without them knowing it, about the impact and value of this book. And I did some quick math and I thought, "I think I can sell between six and 10,000 copies of this book, which is a really big number given the audience and given what I'm charging for it. But I think over seven or eight years I kind of see ... Because I think it'll be bought in bulk and multiple copies from larger firms. I can see it [00:25:30] affecting the bottom line of 2,000 firms, I did the math. Okay, 2,000 firms, let's say, an average size of a million dollars, that's two billion dollars in revenue. I think and I know from anecdotal experience, that this is conservative. I think that the average firm that reads and implements this, can add at least 5% to their bottom line. If you're a million dollar firm, I fully expect that there's no reason why you can't add an extra $50,000 [00:26:00] in profit. And I've talked to Creative Principles to whom I have given pricing advice through our program, and where we just touch on it tangentially in our training program. The profit increase stories just from some of these pricing principles, are just, tenfold increase in profit, I've heard that a lot, doubled profit, tripled profit. I think adding a 5% increase that essentially represents [00:26:30] a 50% increase in most firms. Anyway, that adds up to like 100 million dollars per year, in additional profit for 2,000 smallish creative firms. If I were working as a consultant and these 2,000 firms were just one business, and I said to that business owner, "Listen, I'm pretty confident that I can add $100 million a year to your bottom line." What do you think fair compensation for me as a consultant [00:27:00] would be? The answer would be in the millions of dollars, right? Jonathan: Absolutely. Blair: But there's something about the package that is a book that says, "Well, it doesn't matter if you add hundreds of millions of dollars to the bottom line, if you sell it the traditional way, books should cost between 20 and $40, then you're only going to make so much money." Well, that's ridiculous. So, this book is not sold, it's not available on Amazon, it's only available on our website, Winwithoutpitching.com, go to Pricingcreativity.com, and you'll be redirected. [00:27:30] And it's the first pricing book in the world that is priced based on the principles in the book. When there are three different options, I'm not going to give away too much here, but it starts at $320 a copy. And then there's a $199 version. There's a $100 version. Each of those is fully guaranteed, if you buy at any level. And if it doesn't work for you for whatever reason, sent it back to us, we'll send your money back, no questions asked. So, it's fully guaranteed. [00:28:00] And I want people after they buy the book, I want them to go back to the pricing page on our website. And I want them to see after they read the book. I want them to see, how many of the pricing principles in the book that I've talked about that we actually used in the pricing of this book. I expect, based on the math that I laid out to you, I expect to earn a million dollars in this book. And I think that's fair for me as an author. If I were a consultant, I would view it as an [00:28:30] unfair price. Jonathan: Too low. Rochelle: So the million dollars, you see that coming directly from the book not from doing speeches around the book, not from doing training around the book, totally from the book? Blair: Yeah. Rochelle: That's incredible. Blair: And I had an author say to me when I was in London, he said, "You know, you don't write a book for the money." Well, sometimes you do. Jonathan: I think sometimes you do, I agree. I've written five or six books now depending on how you count it. And I've done through traditional publishers and [00:29:00] self published. And it's different. I think it's important to decide which way you're going to go before you write it. "What's this book for? Is this a business card? Am I staking out a claim to a particular aspect of authority in the world? Or is this a revenue move?" And I think there can be some overlap. There's certainly overlap in the results, but I think knowing which one you're shooting for before you start the project is pretty important. Blair: I [00:29:30] agree and I think probably too many business authors don't actually spend enough time thinking about what the goal of the book is, and therefore what the right way to publish it is or to market it. Like the purpose of this book is value creation, to create value for others, that's the purpose of it. I'm very happy with The Win Without Pitching manifest. I'm happy with the impact it has had on the global creative profession. And I can extrapolate into the future and imagine the impact that it will have with [00:30:00] the long term, and I'm very proud of that. And I have the same expectations, but in different avenue, same expectations for Pricing Creativity book. I really expect this to be the standard in the global creative firm community for many years. I don't think it's going to be timeless, as timeless as the Manifesto, but I expect it to be the standard, to be on people's shelves, and more than the Manifesto, which gets people inspired and gets them believing that there [00:30:30] is another way. This is really the here's how to take those principles and the Manifesto and turn them into real income, real profit for you and your firm. So, yeah, the oversized business card is out there, this is the thing meant to follow up on that, to drive more value creation and obviously, create value for me the author. Jonathan: I totally agree with that. I think the Manifesto was a rallying cry and Pricing Creativity is more of a [00:31:00] playbook, or it's funny that you chose the physical format that you did, because it does remind me of old time software manuals or cookbooks, or it earn and I think it also breaks the way you pointed out earlier as a sort of preconceived notion of how much a book costs. And it's like "Well, this one's a little different." You don't even have to believe the value proposition of the book necessarily, you just look at it and you're like, "Okay, this is different. This is not your regular business book." Blair: If you think of [00:31:30] the training that we sell, so we sell a term of training for anywhere between 2,000 and $15,000, depending on how it's delivered, but the content is essentially the same. And when I started writing this book, for the longest time I thought there was going to be a training program version of it. If you buy the ebook, the manual, which has the added tool section in it, and an advance review copy that you've read Jonathan, doesn't have that tool section in it, but the manual [00:32:00] has it. And then four hours of supporting video around it, you're essentially buying training, so it looks like an expensive book, but it's actually cheap training. And so, we've decided we're not at least for the next year or so, we're not building training around them, around pricing. Our training continues to be around selling, selling The Win Without Pitching Way. We also have some stuff on positioning and regeneration, but we're really a sales training organization. So, this is really deeply discounted training on pricing. [00:32:30] If you look at it that way, it's cheap. If you look at it as a book, and some people will look at it as a book and be outraged at the price, it's expensive. Rochelle: But it's this wonderful integration of the idea of a book in an online course. A lot of people are complaining about online courses now, because you're not getting enough deep content. And I like how you put both of them together here. Blair: Thank you. Even our training program we go out of the way to say it's not an online course. This is [00:33:00] coach led training in classrooms, our coaches have more than 10 years of experience of selling The Win Without Pitching Way, because they were clients of mine more than 10 years ago and have 10 years ... So, and I have nothing against online courses, they are just a lot of them out there, and if you put something into the package of an online course, the price drops. It's like an online courses now, it's now encumbered by the same kind of the limitations of the package as a book is, if you buy [00:33:30] a book on Amazon. So, we're trying to break that paradigm too. Jonathan: It's fascinating, I could talk about pricing all day of course. I think you mentioned the 25 pricing books on your bookshelf, I think I have the same because ... In Pricing Creativity, the first section, I'm not sure, I think you had a different name for it, but the first sort of region of the book is, for people who are maybe considering buying it, it is like a crash course [00:34:00] in the best books on pricing that are out there. And you sort of skim across the service and pull up things that are important to this specific kind of reader, which I think is critical because I can't think of any of the pricing books, even implementing value pricing. None of them really speak down to a tactical level to a particular kind of profession. I find when teaching people some of these, let's be honest, these are pretty abstract concepts, [00:34:30] very, very intangible and tough to believe. There are like an optical illusions almost. And when people are new to these ideas, they need someone, the first couple of times at least, they need someone to be like, "No, no, go like this." And that, go like this, whatever it is, is different from vertical to vertical or it can be. This is why, I think for the right kind of reader, someone running an ad agency for example, or creative or design [00:35:00] agency, it's very, very actionable, which I think is going to earn a place on the desk of ... Like you said, I wouldn't be surprised if this was on the desk of every creative owner across the world. Blair: Certainly, we're not going to hit everyone, but that is my intent. And again, I'm traveling in support of that and I appreciate your point of view on the book, because you've identified what I've really tried to do in that first section, which [00:35:30] is called Principles. I really I'm trying to bubble up like the best of pricing theory from most of the books. And a lot of the best pricing books are heavy in theory and a little bit difficult on the application. Ron Baker's Implementing Value Pricing, I'm much a fan of his. Not only the knowledge, I've never met Ron, but we've corresponded. He just absorbs, his capacity to absorb and synthesize information is awesome, [00:36:00] and he's also an excellent writer. I would read anything that he's written, but when I read Implementing Value Pricing, which is his second book after Pricing On Purpose or Pricing and Purpose is the theory, Implementing Value Pricing basically builds on that. You can just read his second book and skip the first one, because he does kind of a recap of all the principles. And he gets into some great stuff, even some level of detail on implementation that I don't. But it is as I read those, a friend of mine said and I talk about this in the book, he [00:36:30] said, "You should write a book on pricing." and I said, "Oh man, there are some great books on pricing, the world doesn't need another one." He said, "Well, your clients aren't going to read those books." He's right. The owners of the typical creative firms, especially people who see themselves as creative first, and kind of price or sales people, business people second, they're not going to read those books. I needed to deliver the principles in a very interesting way, not go too deep into it, and then get right to [00:37:00] do this. So, the next section is, rules, six different rules, six things you always do when you're pricing. And then the section after that is the lengthier section, it's the tips and that's meant to be specific situation, specific guidance for a specific situation. Crafting your high priced options, crafting your low price options, making the margin in the middle. Dealing with retainers, final negotiations with procurement etc, etc. I imagine people read the first two sections and then when it comes time to craft their proposal, they'll go to the back, [00:37:30] the tools section has a quick review of the rules, and then they'll flip to the section in the tools, to get the specific nugget for the thing that they're building for that one client. So, yeah, that's how I've tried to write the book, and also I come from the world of sales. The reason, I talk about this in the book, the reason value based pricing fails in most creative firms, in fact most professional firms, it breaks down at the value conversation. And that's where the theory [00:38:00] of pricing meets the actual reality of selling. I know from my own experience, you cannot become an effective pricer, if you do not at the same time work on your skills as a salesperson. The third one would be negotiating, so selling, pricing and negotiating, it's really hard to be good at pricing if you do not also tackle selling and negotiating. And that's one of the perspectives [00:38:30] that I tried to bring to the book. Jonathan: Definitely, definitely it comes through. So, we're going to hug it out here. I think it's a great book, I think people who are in this space, it's going to be worth every penny. We're running a little long on time, so what I'd like to do is, ask you what might be kind of a hard question, I know this is really big on your radar right now, but I'm wondering, what do you see beyond this? And the reason I ask is [00:39:00] because you have an amazing post, I think it's called No Exit or No Exit is in the title about, never retiring. And how that changes your focus about the business and all of that. So, I'm wondering have you had that sort of head space to even think beyond this at all, Does this still fit into that public declaration? Blair: Yeah. So the post is called A Mission With No Exit, and that's when I realized from a couple of different sources that, and just seeing in my own clients [00:39:30] what the pattern that I saw is, when you get to a certain age like 55-ish, in some principles, maybe a little earlier, maybe a little bit later, but certainly, by the time somebody is nearing 60, they quit making brave decisions in their business. And it's because they have one eye on the exit, and I realized there are few things that damage a business more than the principle of starting to kind of slowly extricate herself from the business. And I just saw this pattern over and over again, and then this is an [00:40:00] idea I first heard from Dan Sullivan, the founder of Strategic Coach, a coaching organization. I have been in for my own professional development and will be in again, I'm not currently in it right now. But early on in their program, they just disabuse you of this idea, that you're ever going to retire, and the rallying cry is effectively die with your boots on. So, I bought into that early on, and also the idea that you'd never sell. Like you come from the software space, and where in the design world, the design world [00:40:30] is changing so fast these days, because the worlds of design, business consulting and software engineering are all coming together. And look, we don't even have agreed on what the names for this is right, now but it's a really exciting time. But one of the things that's going on, is the design is taking a lot of its cues from tech these days, and in Silicon Valley and the tech world, you see a lot of like spinning up and exiting businesses. I' not going to try to make a moral judgment on that other than to say, [00:41:00] that does not appeal to me. But I think that I see some owners of design businesses think that the proper thing to do is like, build this business, spin it up and exit it. And a lot of sales people like to open a sales conversation with the principle of the business that they're trying to sell to, with the question, what's your exit. I think it's such an insulting question, the implication that you should have an exit. Because I think if I could take away from our listeners, those who own businesses. [00:41:30] If I could take away from you, your right to retire and your right to sell your business, I guarantee you the implications are, that you would start doing today all of the things that you've been putting off. Including things in your personal life, you would arrive at a work life balance now. You would start taking vacations now, you would make the difficult decisions around positioning your firm, about the clients that you work with, about the people that you work with, about having a strong number two in place so that you can free yourself up to do [00:42:00] the more meaningful things, both in the business and in the life. You would structure your day to day so that you're doing things that you love and you're energized by, rather than kind of wading through these undesirable things, with this crazy idea that there's some sort of payoff for all your sacrifice, that all your sacrifice now will lead to a payoff in the future. That's a dangerous idea, and I would just love to disabuse everybody of that notion. So, I talk about that in the post A Mission With No Exit. I do this talk around it's called the [00:42:30] Five Constraints. That's the first constraint, I'd say, if I could impose this on you I would. So in terms of my business, I've got visibility into years of my business, and my plan is, I have no plans to retire, I have no plans to sell, I plan to die with my boots on. I do recognize I'm 51, I do recognize that once you're 70, I don't know where the age is, where the line is, but at some point, people, the way, the advice that they're likely to [00:43:00] take from you is different. Your role needs to change as you age, I know that. But I have lots after this, so much is after this. I'm so excited about what's after launching and pushing Pricing Creativity out into the world. I could live three lives and I would never be finished with the things that I want to do in this business. Rochelle: Hear, hear. Jonathan: Amen. Well, that's a fabulous place to wrap up, I think. Where can people, where's [00:43:30] the best place for people to find out more about you online, Blair? Blair: I'm at Winwithoutpitching.com, if you go to Priceandcreativity.com, that will take you to a page on the Win Without Pitching website. I'm Blair Enns on Twitter and also LinkedIn. I don't use other social media. For years I've been saying, I'm not convinced I'm going to stay on twitter much longer. But I am on Twitter now and I'm on LinkedIn now. And you can find me at Winwithoutpitching.com, where you can learn more [00:44:00] about the books and the training program. And if you want to reach out, you can do that through the website. Rochelle: Awesome. Jonathan: Very good. Well, dear listener, that is our show for this week. We hope you join us again next week for the Business of Authority. Bye. Rochelle: Bye. Bye.

Jonathan So and Peter Cameron - What has changed your teaching? by Derek Rhodenizer

It took a bit longer than usual to push this episode out - life can be like that. My family is pretty busy and in the end, I gotta follow their lead ... and it seems like the same deal for Jonathan So. He, like me, is trying to rock the intersection of Fatherhood and Educator. And along the way, we have found that the lessons our own children teach us can sometimes prove to be the most valuable professional development in town. You can find Jonathan on Twitter @MrSoclassroom Chasing Squirrels is on iTunes https://itunes.apple.com/ca/podcast/chasing-squirrels/id1191208370?mt=2  You can find me on Twitter @chrisjcluff and on Wordpress at https://chrisjcluff.com/ If you would like to chat on the podcast, let me know. Music in this episode: Ace of Clubs is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/by-sa/4.0/) Artist: http://freemusicarchive.org/music/RoccoW/

It took a bit longer than usual to push this episode out - life can be like that. My family is pretty busy and in the end, I gotta follow their lead ... and it seems like the same deal for Jonathan So. He, like me, is trying to rock the intersection of Fatherhood and Educator. And along the way, we have found that the lessons our own children teach us can sometimes prove to be the most valuable professional development in town. You can find Jonathan on Twitter @MrSoclassroom Chasing Squirrels is on iTunes https://itunes.apple.com/ca/podcast/chasing-squirrels/id1191208370?mt=2  You can find me on Twitter @chrisjcluff and on Wordpress at https://chrisjcluff.com/ If you would like to chat on the podcast, let me know. Music in this episode: Ace of Clubs is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/by-sa/4.0/) Artist: http://freemusicarchive.org/music/RoccoW/

I had a conversation with Jonathan So, a grade 6 teacher promoting creativity & exploration in all of his students. We talked process vs content, authentic learning, fluidity of information and relationships. Check out his webpage here: https://mrsoclassroom.wordpress.com/