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Before you sell your company, even the odds. This episode features guests Mark Achler and Mert Iseri, authors of the recent book, Exit Right: How to Sell Your Startup, Maximize Your Return and Build Your Legacy. Exit Right demystifies how to conclude the startup journey, a perfect complement to our podcast, which focuses more on the exits of larger middle-market companies. As Brad Feld states in the Foreword, “Mert and Mark set the roadmap for how entrepreneurs and business owners can proactively manage the process of getting to a successful exit along the way”. As Jeff says at the start of the interview: Mark and Mert cover so many great informative topics in the book. There is a wealth of tips to guide business owners through what can be a tumultuous process, getting through the exit. There are also so many topics we align with: relationships matter most, planning for wealth, time kills all deals, and the importance of following a best-practice process.  In this podcast episode, we focus on three topics with a lot of meat to each:  FAIR, Mert and Mark's framework for a successful exit, (3:00)  The“Exit Talk” and how we suggest that all companies adopt this practice with their board (15:00), and Who is involved in the Exit Talk and why? (28:00) What is FAIR? Why does it lead to the best transactions? (3:00) Mert: What we realized as we started to gather stories and experiences from M&A bankers, lawyers, serial entrepreneurs, etc is that the real question isn't, “Let's find out who's going to pay the most.” The real question is, “What's the right home for this business? What's the right home for my people? What's the right home for the vision? Who is going to serve our customers the best?” Our view of an exit went from being a short-term transaction to a long-term partnership. The term “exit” is a poor word choice.  You're not really exiting anything. If anything, it's the beginning of a brand new relationship. So when we ask ourselves, “What makes a great home for a startup?” we focus on these four elements that make exits great. FAIR. Fit, Alignment, Integration, and Rationale.  If you have all four of those, it just so happens that you've also found the person who's willing to pay the most for your business, because they will realize the long-term value and they'll price the deal accordingly. Fit is the cultural fit between the two companies. Amazon and Zappos are a great fit. Time Warner and AOL, are probably not a great fit. It's easily described. Can you sit next to this person for four hours and not want to kill them by the end of the meeting? Can you actually make decisions without written rules? Are cultural values aligned? Are the DNAs sort of similar, cousins to each other between those two companies? Alignment is about being aligned with your co-founders, board, and shareholders in terms of the direction of where you want to go. The acquiring company also must be aligned.  We almost always dismiss the alignment that we need from all sides of the table. This isn't two sides looking at each other. This is two sides looking in the same direction. Integration has to do with the plan for how these two companies will come together. We've seen so many examples of this plan of integration being done as an afterthought. It's not just product and sales integration but people integration, finance integration; many, many layers. And all of these stakeholders have different agendas that need to be individually managed.  Rationale. Can you explain to your grandmother why this acquisition makes sense? How are we going to deliver more value to our customers as a result of this partnership? How is two plus two equal to 100 in this context? Mark: There are profound financial implications to the FAIR framework. Let's take Integration. Integration is the ugly stepchild. People always say, “Oh yeah, we'll deal with integration afterward.”  Turns out that in many transactions, it's not always 100% cash. Sometimes there's an earn-out for future performance. If you're not integrated well (you don't have the resources you need to execute your plan), there are some significant financial implications to the earn-out. Then there are the financial implications to Rationale. Transactions are typically based on looking backward using a multiple. When you create a rationale that says one plus one equals a hundred, if it's a strategic investment, you take your product and we plug it into the larger company's sales force or the larger company's customer base. What could we do inside the larger company? What's the impact of your product on the larger company? The way to maximize value is not looking backward as a multiple, but looking forward using the rationale. Strategically, why is the combination so valuable? If you can get everybody aligned around the rationale and the financial implications of that rationale, that's how you're going to drive a better price for an exit. Mert: No one's going to just sit down and tell you, “This is our rationale.” You uncover it. You unearth it over years. That's why we urge entrepreneurs to put their party dresses on. Talk to many competitors. Talk to strategics. Get out the door. You need to build this trusted relationship over time with fundamental questions. How can I help? How can I help you push your agenda forward? How can I help my customers? This is what great partnerships really look like. We're not saying go share your financials with your competitors or give away all your IP to a larger strategy, but you need to be that trusted partner that advances the mission on all sides and creates a situation where everybody wins. Mark: We wrote the book about exits, but it turns out that the decisions that entrepreneurs make at the beginning of their journey have an outsized impact at the end of the journey. Even though this book is really about the exit, there is really good advice there about the beginning of the journey as well. Jeff: That's exactly right. This book is really about the journey.  All of the steps on the journey influence the end. There's so much wisdom in the book and insights about all the things that you can do to proactively get to the right end. Management meetings are oftentimes the first time that business owners meet their potential acquirers, whether they're competitors or strategics, or investors. But the longer that relationship can be developed, the more that you can uncover in terms of the shared common goal of what can we do together. And the best valuation and the best terms will just naturally evolve. What is an “Exit Talk”? How can founders use it to reach alignment in their boardrooms? (15:00) Jeff: The Exit Talk really struck a chord with me. Let's encourage clients and future clients to have these discussions and this thought process through the FAIR framework to really think ahead. Sometimes we as investment bankers get brought in late in the game. But most of our transactions and our best relationships really span years. We get to know the business, the goals, and importantly the people involved, the operators, the owners, the founders, and the investors. Some of these relationships for us span a decade or more. We give them advice on how to grow their companies. This concept of an exit talk is missing from my perspective. Exit discussions are often secretive or clouded in secrecy. It is a very small universe of folks within a company that knows that a transaction is imminent. It's rarely discussed openly among the senior leadership team until late in the game. What you guys propose is proactive. Through your work and sharing your work with my future clients, I'd like them to embrace this philosophy. I love this quote that you said, “Instead of fueling the awkwardness of the exit topic by staying silent, we are putting forward a new norm that we believe the entire industry should adopt, which is the Exit Talk.” Mark: This is one of our favorite topics. But before we dive into the Exit Talk: We are such big believers in trust. Every deal has its ups and downs. It has its emotional turbulence, it's the journey. Trust is the lubrication that gets deals done through to the conclusion. I just wanted to put a fine point on that topic of trust because it permeates everything we do. The Exit Talk.  It turns out that there's a stigma to talking about exits. CEOs are afraid. They're afraid that if they bring up the topic of an exit that their board and their investors are going to think their heart's not in it. They've lost hope. They've lost faith. In the Venture Capital or Private Equity world, we have a time horizon. When you take our capital, you take our agenda, and you take our time horizon. We're looking for X return over Y timeframe. And if you're in year one of a fund, we've got plenty of time.  Let's go build and grow. If you're in year 10 of a fund, we've got to start returning capital back to our LPs. With the Exit Talk, what we're proposing is that once a year, maybe your first board meeting of the year, you have a regularly scheduled annual talk where the CEO, without fear of being perceived as their heart's not in it, can talk about the exit. The reason it's so incredibly helpful is that you have the luxury of time. If you had 18 months or two years, you have the luxury of saying, “Who's going to be the most likely acquirer? Is it going to be a strategic acquirer? And why? Who is it and why would they want to acquire us? Or is it going to be a financial buyer and what are they looking for? Are they looking for top-line revenue?”  If we're going to sell to somebody who really cares about growth, we may invest a little bit more heavily in sales and marketing. If it's somebody who is more financially oriented and really cares about EBITDA, we might tighten the ship and focus on profitability.  It gives you the luxury of time to get your intellectual property in order, make sure that every single employee has a signed agreement, and make sure that trademarks and patents are filed appropriately. Get your data room pristine. If you have the luxury of time, you can optimize and present your business. And you could take the time to find the best bankers and attorneys who really are going to represent you well. Mert: An outcome of this talk doesn't necessarily have to be “we're ready to sell, or we're not ready to sell”. It can also be an opportunity to start prototyping some of the theories around how you add more value to your customers. This is a great centerpiece for what we believe an exit should be reasoned around. This will help our customers faster/better than what we could do on our own by just raising more money or gathering more capital or resources. For instance, if you are going to have a strategic alignment with a larger company like Google, but you're not ready to sell, it's still an opportunity to start a relationship. Maybe we work on a mutual customer together. Maybe we create some content together where we tell our stories and we share our wisdom with theirs. You want to start charging up that trust battery over time. When you are ready, you are a known entity. The reality is these M&A (Corporate Development) leaders want to buy companies from trusted entities. They don't want an egg on their face either. They want to know the company that they're investing in. They're not viewing this as an acquisition, they're really viewing it as an investment. They want to know they can trust you. They want to know that you can go the distance. It's a really difficult thing to do to create that kind of trust. You're not going to rush through trust. You're going to build it incrementally over years. Even the identification of a strategic partner when you're not ready to sell is extremely valuable because that's an opportunity to generate a relationship. Find out what their priorities are. See if your solution helps move those numbers forward.  Mark: We're big believers in empathy. We have an empathy framework. There are three rules of empathy: 1) It's not about you. It's always about the person sitting across the table from you. 2) Do your homework.  Deeply and truly understand what's important. Mert just said, “Go listen to the quarterly earnings report.” They're going to tell you what they care about. 3) Bring a gift, add value. When I say bring a gift: what can you do? If you're an industry leader, provide some thought leadership about where the market's heading. Share new bits of technology. Not only can you gain knowledge about their strategic direction, you can also share knowledge and be thought of as a trusted thought leader.  If you take those empathy rules and apply them to building relationships over time, that's how you're going to earn trust. Jeff: I love the idea of a trust battery and charging that up over time. You can't do that overnight. You can't do that in one management meeting. You can't do that in a really compressed timeframe. You really need to start early and think about what you can bring to the table. What can you bring as a gift to add value to somebody else so that they can see the value in what you are bringing?  That's really the roadmap that you guys layout in your book: what steps can we take proactively to get to the best outcome. Who is involved in the Exit Talk, and why? (28:00) Mark: Let's separate out the annual exit talk from an actual transaction process. The exit talk is a board of directors-level conversation. Maybe you bring in one or two top lieutenants into that conversation, depending on the relationship between the CEO and maybe one or two C-suite members. But that's a board-level, strategic conversation that's not for the whole company. (For an actual transaction process), there are lots of different ways of handling it. My own personal opinion is that there is a dance that takes place starting as an aperture that broadens over time. One of the challenges with telling any employee about a transaction is human nature. “What's that mean to me? Am I going to have a job? Am I going to get fired? Am I going to become rich? What are my stock options worth?” One of the challenges is that not all deals happen; deals fall apart all the time. So the team has to have their eye on the ball. For the CEO, when they're going through a transaction, it can be all-consuming.  We've seen instances where companies started slowing down, missing their numbers because the CEO was distracted and not focused on running their business.  The way I think about it is starting with the CEO and the board, keeping a really tight circle of information. And then as the conversations start to broaden and deepen in a transaction, then people are going to start the due diligence process.  Make sure your C-suite is involved and your executive team is involved. The people who are going to be part of the due diligence process, obviously you're going to have to inform them. I don't think it's a great thing to just wake up one morning and say to your entire employee base, “Hey, guess what? We just got sold.” There's a middle ground someplace in that continuum. Try to keep it confidential through most of the process. As you start to get to certainty you need to start opening it up so it's not a surprise to everybody. Mert: There's one major stakeholder that hasn't been discussed and I just want to bring that up, and that's your family. Most founders overlook that and think of this transaction as a business event. This is a life event. Your family is a humongous stakeholder. We want to highlight that this is a critical component of whether an exit happens or not. What's happening with your family is just as important as what is happening with your board and other stakeholders. Mark: I couldn't agree with you more. It's not just us, it's our families and our loved ones too that have a stake in this. Jeff: It goes for all key constituents, starting with the family and then moving down to the board members and the C-suite and figuring out what's the right communication style and method and frequency. These things are really critical decisions that most folks don't really spend the time thinking about. Mark: One of the questions we ask CEOs is: when you're done with the transaction, will your employees come back to work for you in the next company you start? Will your investors want to invest in you in the next company you start? Will the biz dev lead of the large company who goes on to the next company, are they going to want to buy your next company? I think what many entrepreneurs fail to understand is that the relationships you build and your legacy live on way past the deal and the transaction.  We're big believers in servant leadership and that the best CEOs don't view life as a zero-sum game. They make sure that they take care of their customers, their employees, and their investors. They try to find the balance of supporting all relationships over time. ABOUT OUR GUESTS While a successful entrepreneur may exit a handful of companies in their lifetime, large buyers close deals all the time. Without decades of experience in mergers and acquisitions, founders don't have the tools they need to get the best results for themselves, their teams, or the new parent company. Through dozens of interviews with M&A leaders at the biggest Silicon Valley acquirers—as well as attorneys, bankers, and founders who have been through the trenches—Exit Right delivers the hard-earned lessons that lead to successful exits. From negotiation to valuation to breaking down a term sheet, managing legal costs, and handling emotional turbulence—this unparalleled guide covers every critical aspect of a technology startup sale. Learn where deals get into trouble, how to create alignment between negotiating parties, and what terms you should care about most. Above all, learn how to win in both the short and the long term, maximizing your price while positioning your company for a legacy you can be proud of. Author Biographies An early employee of Apple and Head of Innovation at Redbox, Mark Achler has been creating and investing in tech startups since 1986. Today, he is a founding partner of MATH Venture Partners, a technology venture capital fund, and an adjunct professor at the Northwestern Kellogg School of Management. Mert Iseri co-founded SwipeSense, a healthcare technology company acquired by SC Johnson in 2020. Prior to that, he co-founded Design for America, a national network of students using design thinking to create social impact, now part of the IBM Watson Foundation. He is currently an Entrepreneur in Residence at MATH Venture Partners. Socials Mark Achler Mert Hilmi Iseri Book About the hosts Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc. Gina received her BA in Economics and an MBA from the University of Chicago. Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, please subscribe and consider leaving us a short review:

There are some important terms you're going to come across as you prepare for retirement. Having a basic understanding of these will help you achieve financial success, so we'll cover what they mean and what you should know on today's episode. And don't worry. We won't go quite so far down the rabbit hole where we expect you to be able to explain how a company's P/E ratio meshes with it's Alpha and Beta ratings to determine how much stock you should buy. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey everybody welcome into the podcast. Thanks for hanging out with John and Nick and I, as we talk about Retirement Planning Redefined here on the podcast. As always, don't forget to subscribe to us on whatever platform you like to use. Find all the information you need at pfgprivatewealth.com. That's the guys website pfgprivatewealth.com. Lot of good tools, tips, and resources to be found there. We're going to have another conversation today about some financial jargon. This is more kind of investment terms you might want to know or have heard and maybe you want to get a better understanding on, especially if you're sitting down and you're shopping for a professional or something like that. You want to kind of understand some of these things that you're talking about. Now we're not going to go super deep. We're not going to get into PE ratios and alphas and betas and all that kind of stuff, but we're going to keep it kind of high level. So we'll jump into that this week on the podcast, Nick, what's going on, buddy? How you doing?   Nick: Pretty good. Pretty good. Staying busy. We're recording this, just kind of closing up tax season. So happy that that is over for-   Mark: I bet.   Nick: Everybody that is at least not filing an extension.   Mark: Yeah.   Nick: But yeah, it's obviously a lot going on in the world. So it's been keeping us pretty busy.   Mark: Yeah that's true. Very true. John, what about you buddy? You glad tax season's over?   John: Yeah. Yeah. It's a fun kind of hump to get over.   Mark: I like that little pause. It's fun. Yeah.   John: Yeah. So, no, it's good. It's kind of a mark that people have on their calendar, so that's over with, and really we start to kind of get busy afterwards.   Mark: Yeah.   John: Because a lot of people kind of delay meetings until after tax season, so excited to get back at it. And then also excited that NBA playoffs started. So Boston Celtics are playing the Nets right now.   Mark: Alright now, there you go.   John: Gearing up for that, so-   Mark: There you go. Very good. Well we probably should have done a show really on tax planning versus tax preps right after tax season because really tax planning is something you should be doing all year long with your retirement professional anyway, but we're not going to do that this week. Maybe we'll do that here in the next couple of weeks, we'll come up and do something.   Mark: But for now let's talk about some terms that people hear and probably should know. Maybe you know, maybe you have that kind of cursory high level view, whatever the case might be. Maybe you don't. So let's talk about a few of these. Let's kind of start with fiduciary guys. And this is a term that I think people should know. They should know what it is. I kind of wish, and I was thinking about this before we started that our politicians had to do what fiduciaries have to do, right? They have that legal, moral, ethical responsibility to do what's right for their client AKA us as American citizens. I wish our politicians had to be fiduciaries, but either way explain what it is and maybe a little bit of the difference between that and like suitability.   John: Yeah. So fiduciary, especially in our world's investment advisor, it's where the fiduciary is obligated to put the client's best interests ahead of their own. So really looking to do what's best for the client, regardless of any other factors. And what you mentioned there with as far as, how does that compare to suitability, where kind of like a broker has to recommend something that's suitable for the client, so there's a big difference when you start to kind of analyze that is something might be suitable for you, but it might not be the best thing for your situation.   Mark: Right.   John: Or maybe there's other things out there that are better. So fiduciary has the due diligence and say, "Hey, I'm making this recommendation. And based on my expertise, my knowledge, everything I've compared it to this is what I believe is the best for you." And also if there's any conflict of interests for the advisor as a fiduciary, they must disclose that to you upfront.   Mark: Yeah.   John: So one thing, what people really need to do when they're interviewing advisors or kind of taking that step to try to find someone to work with, it's really one of the first questions should be asking. I'd say the good thing is the industry is really going in this direction-   Mark: Mm-hmm (affirmative).   John: Over the last, decade or so. It's really been kind of going, fiduciary, fiduciary, so that's.   Mark: Making that the standard, making it more the standard?   John: Yeah. Yeah, no, I think that's a great point. So if I'm getting this right, then maybe to kind of break this down for people, and Nick feel free to chime in, but so if there's three options available, suitability would say, "Hey, any of these three technically work for my client, but this one actually pays me better or there's a reward of a trip or something like that attached to it." You're not doing the wrong thing by picking that. It's still suitable. Whereas a fiduciary has to go with the absolute best thing for the client period. Is that a fair way to break that down in layman's terms?   Nick: Yeah, I think that's a pretty fair way to kind of break it down and it can get tricky because when you really get into the nitty gritty in theory, people can argue about what's better now versus what might be better down the road and that sort of thing.   Mark: Right.   Nick: But if anything, I think what's important for people to understand is the conflicts of interests, the potential conflicts of interest and where they come from. So, if you're working with an advisor that is tied in with a parent company that has proprietary products, then they're probably not able to function as a fiduciary. So-   Mark: Gotcha.   Nick: Understanding that there's a conflict of interest, a potential conflict of interest, there is just something that people should ask about so that they understand it. It can be from experience just kind of chatting with people. It can get a little overwhelming for people to kind of really drill down understanding the difference between fiduciary and standard versus a suitability standard. But people oftentimes understand conflict of interest. And just to kind of piggyback a little bit on your short little rant earlier about politicians, many people would be shocked to know that many politicians are able to invest in companies even though there may be conflicts of interests.   Mark: Yeah.   Nick: And the fact that's able to happen. And there's some websites that track those sort of things, but oftentimes they're privy to information that will impact a company in the marketplace and they're able to take advantage of it even though, the rest of the country can't do that, so-   Mark: Yeah, I was just even talking financially. In just their basic decision making when they pass laws.   Nick: For sure. For sure. But that's a good example of them not passing laws that-   Mark: True.   Nick: Aren't good for everybody.   Mark: Well and to John's point, so there's nothing wrong with asking, right? When you go in and sit down with someone, you just say, "Hey, are, are you a fiduciary?" Right? That's a fair question, and there's nothing wrong with asking that.   Nick: Agreed.   Mark: Yeah. Okay. All right. So let's move on to the other big term right now that everybody's getting hit over the head with, on a regular basis, and that's inflation. At the time we're doing this podcast guys, the CPI numbers came out a couple of weeks ago for March, pretty ugly. Gross is a term that has been thrown around quite a bit some of these numbers, 8.5% on the inflation, we're talking what 48% on gas, 35% up on used cars, food 13 to 17% up. So inflation break it down a little bit.   Nick: Yeah. So inflation has to do with spending power of money. And so one of the easiest ways for people to kind of think about it is, you mentioned food for example, one of the things that we kind of joke around with people is they were able to a couple years ago, do you remember when you could walk out of Publix and get everything you needed for 70, 80 bucks versus it now costing 100, $120 for the same amount of stuff. And the tricky thing with inflation is that it's there on a consistent basis year to year, but every 10 to 15 years, it kind of creeps up on us. And then we realize, Hey, this is kind of annoying.   Nick: And then obviously we have times we're in right now where there's some hyper inflation and kind of pocket books are getting hit. The one thing that I would say just to kind of pour some water on it is that although there are some real substantial issues that people are dealing with, there are some kind of, I guess, what we would almost call acute factors that are having an impact on it, that we would hope subside to a certain extent within the next year or two. But also there are going to be ramifications that we're already starting to see where the FED is doing things to try to combat inflation, like increasing interest rates, which we're kind of already on the docket, but has been getting pushed down. The cans been getting kicked down the road for a while.   Nick: And so things like mortgages, mortgage rates are now I think mid fives I read, whereas a year ago, closer to three. And I was just having a conversation with somebody to kind of put that in real world numbers. A half a million dollar mortgage at rates a year ago, a half a million dollar financed amount is from a monthly payment standpoint is equivalent to around 370,000 now, or if you look at it inverse half a million dollar mortgage at current rates is going to cost you around $700 a month more than it was a year ago. So that's going to have a real impact on housing prices and a lot of other things as well. So those are some real world examples of how inflation kind of impacts our life.   Mark: All right. So yeah, obviously we're hyper aware, we've talked about it before a little bit, but inflation we always kind of think of, at least I do it anyway, like calories, right? We know it exists and we don't often put a lot of thought into it until it's slapping us in the face, so to speak. And it's definitely doing that right now, so a lot people very concerned about that. So when we are talking about that, what happens is you start thinking, well maybe I should take a little more risk or whatever the case is with my portfolio to try to outpace inflation or keep up with it or whatever the case is, especially in these crazy times. So that leads us into risk tolerance guys. So what is your risk tolerance? And is that a wise move to try to take on more risk to combat something? Usually it's not.   John: No, it's not. And this is one of the most probably important things in building a portfolio that someone should really take a look at, and it's often overlooked. So risk tolerance is, to kind of bring it down to the simplest form is how much loss is an investor willing to take in their portfolio? How much volatility can they tolerate? So one of the things that we do when we are building a portfolio for our clients, the first thing actually is we have them go through a risk tolerance questionnaire to determine, are they conservative, moderate, aggressive? And from there we really help us design the portfolio so that way we can kind of match up the expected volatility of the portfolio with kind of what they could bear.   John: Because one of the worst things you could do investing is jumping around. And I hate to say it seeing a little bit right now I've already kind of feel a few phone calls I'm like, hey what should we do with the market? And if this volatility's already got you nervous and it hasn't really, it's been a pullback but it hasn't been anything too significant.   Mark: Right.   John: You really need to take a look at am I invested correctly because as we all know, as you shift to conservative or to cash, and then the next week the market just rally up and all of a sudden you just lost all. You realized your losses and didn't get to recover from it.   Mark: Yeah, knee jerk reaction is not the best right now. Right?   Nick: Yeah. And I would even jump in with that too going along with what John said where I think we have hit that point where people have forgotten what it's like to have bad markets, or even a normal market cycle of having a negative year. Even during COVID when the markets pulled back, 35, 40%, they bounced back by the end of the year. So it was never really realized. There was a short period of panic, but the recovery was quick, but.   Mark: Mm-hmm (affirmative).   Nick: There's a lot of people that don't remember that hey, there are going to be years where the market is down 10% for the year, the whole year. 12 whole months, so that's something that's interesting that's happening right now that we're seeing. Plus, historically where people would shift would be to fixed income or bonds. And that's not necessarily a safe place right now, either. So we're kind of in this, almost unicorn phase that only comes along every 50 or 60 years where there's not a lot of opportunities in many places. And so there's going to definitely have to be some patience involved-   Mark: I like that.   Nick: In the next 12 to 18 months.   Mark: Yeah. I like the unicorn phase. That's a good way of putting it. It's definitely been interesting, that's for sure. So do you guys kind of with the risk tolerance, is it kind of that number kind of system? Do you guys do that risk tolerance kind of thing where you kind of give someone almost like sleep number, if you will. If you're 100 or if you're a 20, how does that work?   John: Yeah. So how we do it and I've used actually some programs that do that. They give you a risk number based on how you answer questions. We have a set of some pretty good questions that give us an idea of what that person can kind of stomach.   Mark: Okay.   John: And what their expected return is. It's really, when you start to break it down, it's a lot of the same questions just asked differently to really kind of understand how the person ticks.   Mark: Yeah.   John: So we do a real good job of figuring that out. And then as advisors, part of our job is to make sure we put them in the appropriate portfolio based on how they answer.   Mark: Yeah. Because it's pretty easy to say conservative, and you go, what does that even mean? Right? Or I'm moderate.   John: Yeah.   Mark: Well what does that mean? That's probably a wide window, right?   John: It is.   Nick: Yeah. And then I would say one of the things that without it sounding like a commercial for ourselves, one of the things that we do that's a little bit different than some places that we do have what's called like a tactical tilt to how we manage money, where if we do have significant concerns, we will tamp down the risk. So maybe if somebody's normally in a portfolio that's a 50/50 mix stock to bond and what we would consider a moderate portfolio, if we have significant concerns in the market, we may drop them down to 30% on the stock side of things in certain cycles where we have high concerns. So sometimes what we found is that helps allay some fears for some people that there's some proactive potential changes, where if we really feel like it's going to hit the fan, we will make that change.   Mark: Right. Okay. So risk tolerance, another big one then definitely making sure that you're having that proper risk tolerance for yourself, especially in these inflationary times. When it becomes, it's hard to not feel, I think as humans, we feel like if we don't do something, we're doing something wrong or we have to take action or therefore we've made a mistake. And sometimes doing nothing can be a smart move. Especially in volatile times when it comes to a financial standpoint, if you don't know the correct answer, making no move might be a good place to start at least. That way you're not having that knee jerk reaction. And then of course, talk with a professional. Get some advice, and get a good strategy in place so that you know the right moves to make at the right time. Let's do another one here, guys, another technical one, dollar cost averaging, what is that?   Nick: So dollar cost averaging is the easiest example that most people have exposure to on a regular basis. And they don't probably realize that they're doing it is when people are contributing to their 401k. So every two weeks, a certain amount of your paycheck goes into your 401k and you have a set allocation and you are buying in to that allocation at whatever price it's at that point in time. So the thought process with dollar cost averaging is that you are balancing, you're investing over a period of time. Where sometimes you'll be buying at a premium, sometimes you'll be buying at a discount, but the objective is to continually invest and make sure that you are not trying to time the market.   John: And part of that is also what we're finding with the current market where it's at, with people with money on the sidelines, it could be a good way to kind of take some of the risk of putting all your money into the market and all of a sudden it dropping. So there's a strategy to basically say every, if I have 100,000 I want to put into the market every month or so, I'm going to be putting in 10 grand into it. That way, if it does dip down immediately, I only have $10,000 at risk. So dollar cost averaging, as Nick mentioned, most people are doing the 401k, not knowing it, but if you have money on the sideline in a volatile market, or if you're nervous, it is a good way to kind of get money that was on the sideline into the market.   Mark: Okay. All right. Well let's do one more guys and we'll wrap it up this week. Asset allocation, another big term we hear. We probably get that tossed around a little bit. Give us the kind of high level view of what that is. And because often I think people wind up feeling like they have a whole bunch of one thing and they're diversified because they've, I don't know, for example, I've got a whole bunch of mutual funds, so therefore I'm good. So explain what asset allocation is and is that correct? What I just said, is that really diversified or not?   John: Yeah. So asset allocation's kind of taken diversification to a different level. You could have seven different mutual funds, but if it's all the same type of funds, for example, like a large cap growth fund, they're going to do the same thing in reality when the market goes up or down. So when you do asset allocation, you're spreading your money, your portfolio within different asset classes, such as large cap stocks, small stocks that Nick mentioned, fixed income earlier, cash, some alternatives.   John: So what you do there is when you're building a portfolio and again, starting with your risk tolerance and your goals, you determine, hey my risk tolerance is X, here's my goals. I should be in a, let's just call it in income in growth portfolio. Well, what's the right mix of asset classes to make that work and to kind of bring it down to layman's terms here? Imagine kind of cooking, you're making recipe for a pie. The pie has certain ingredients to make it work and make it taste good. And that's basically what you're doing in your investments. It could be 20% large cap, 5% small cap, 20% fixed income, and our job as advisors and wealth management is we build that portfolio for the client if they hire us to do so.   Mark: Gotcha. Okay. All right. That's a good way of breaking that down. You just think about like a pie. So, and who doesn't love pie? So there you go. All right guys, thanks so much for the conversation this week. Good stuff talking about these technical terms, some jargon here. Hopefully we kept that pretty high level and it helped out with some of the things that you might be thinking or hearing. And if you've got questions, definitely reach out to the guys.   Mark: As always, before you take any action sit down. If you're already working with them, maybe share this podcast with someone who might benefit from it. If not, if you've been listening for a while, just reach out to them, have a conversation, and chat with them for yourself. You can find all of it at pfgprivatewealth.com. That's their website pfgprivatewealth.com. They're financial advisors at PFG Private Wealth, which makes a lot of sense. So make sure you subscribe on Apple, Google, Spotify, all that good kind of stuff. That way you can catch past episodes as well as future episodes. For John and Nick I'm your host, Mark. We'll catch you next time here on Retirement Planning Redefined.

There are certain age milestones where you should really pay attention to your retirement planning progress. On this episode, we'll look at the most important birthdays as you approach retirement and cover the exact things you should be checking off your to-do list at each age. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey, everybody. Welcome into another addition of the podcast. This is Retirement Planning Redefined, with John and Nick and myself, talking investing, finance, retirement, and birthdays.   Mark: We're going to get into important birthdays in the retirement planning process. As we get older, I don't think any of us really want birthdays, but these are some things we need to know. They're pretty useful. Some of this is pretty basic. Some of this stuff's got some interesting caveats in it as well. So you might learn something along the way. It can go a long way towards that retirement planning process.   Mark: We're going to get into that and take an email question as well. If you've got some questions of your own, stop by the website, pfgprivatewealth.com. That's pfgprivatewealth.com.   Mark: John, what's going on, buddy? How you doing?   John: A little tired. Got woken up at 2:00 in the morning with two cranky kids.   Mark: Oh yeah.   John: So if I'm a little off today, I apologize.   Mark: There you go. No, no worries. You get the whole, they climb the bed, and then you're on the tiniest sliver?   John: I got one climb into bed, I think kicked me in the face at one point.   Mark: Oh, nice.   John: Another one climbed into bed missing out on the other one, because they share a room. Then I had the sliver. I woke up almost falling off the bed.   Mark: There you go. And usually freezing because you have no blankets.   John: Yeah, yeah.   Mark: That's usually the way it goes. Nick's sitting there going, "I don't know what you guys are talking about."   Mark: What's going on, buddy. How you doing?   Nick: Yep. No. Pretty low maintenance over here.   Mark: Well, that's good. Hey, don't you have a birthday coming up?   Nick: I got a couple months still.   Mark: Okay, a couple months.   Nick: Yeah, I just got back from a trip a few weeks ago. Some buddies that I grew up with, a group of us have been friends for a really long time, I guess, going back to middle school. We're all turning 40 this year, so we rented a house in Charleston, and all survived.   Mark: Nice. There you go.   Nick: Yeah. It was good.   John: This is how you know Nick's turning 40. He came back with neck pain.   Mark: Exactly.   Nick: Yeah.   Mark: Hey, when you start to get a certain age, you start going, "When did I hurt that?" It's like, "I didn't even do anything." Yeah. You don't have to do anything.   Mark: Well, you know what? That's a good segue. Let's jump into this.   Mark: We're going to start with age 50. I turned 50 last year. First of all, the thing that sucks is you get the AARP card. I don't know about all that. That's annoying as a reminder that you're 50.   Mark: But the government does say, "Hey, let me help you out a little bit here if you need to catch up on some of the retirement accounts, help building those up." Talk to me about catch up contributions, guys.   Nick: Yeah. Essentially what happens is when you hit 50, there's two types of accounts that allow you to start contributing a little bit more money. The most basic one is an IRA or a Roth IRA, where the typical maximum contribution for somebody under 50 is 6,000 a year. You can add an additional thousand to do a total of 7,000 a year. The bigger one is in a 401(k) or 403(b) account, where you're able to contribute, I believe it's an extra 6,500 per year.   Nick: This is also a good flag for people to think about where, hey, once that catch up contribution is available, it's probably a good time, if you haven't done any sort of planning before, to really start to dial in and understand your financial picture a little bit more. Because if you talk to anybody that's 60, they'll tell you that 50 didn't seem too far back. So that's a good reminder to dig into that a little bit.   Mark: Yeah. It adds up. It's not necessarily chicken feed. You might hear it and think, "Well, a thousand dollars on this type of account over a year, or 6,500 on the other type of account, whoopedidoo." But if you're 50 and you're going to 67, let say, for full retirement age, and we'll get to that in a little bit, that's 17 years of an extra seven grand. It's not exactly chicken feed, right?   Nick: No. It's going to be big money down the road.   Mark: Yeah, exactly. So that's 50.   Mark: John, talk to me about 55. This one's really similar to 59 and a half, which most of us are familiar with, but most people don't understand the rule at 55. So can you break that down a little bit?   John: Yeah. We don't see people utilize this too often, but an example would be let's say you're 50, 55, 56, and for whatever reason, you leave your current job. You have an opportunity, at that point...   John: Let's give a bad scenario. You get laid off. If you didn't have a nest egg saved up in savings, there's an opportunity to actually access some money from your 401(k) plan without penalty. What you'll do is, basically, you take the money directly from the plan, and you just have it go to your bank account, and the 10% penalty's waived.   John: Now, some people need to be careful with this. Once you roll it out to an IRA, this 55 rule here, where the 10%'s waived, ceases to exist. It has to go from the employer plan to you directly in that situation. It's a nice feature if someone finds themselves in a bad situation, or they need access to money, and the 10% penalty's gone, but you still have to pay your income tax on that money [crosstalk 00:05:03]   Mark: Of course. Yeah. That caveat being, it's only from the job that you've just left, right? It can't be from two jobs ago kind of thing. It's got to be that one that you've just walked away from, or been asked to leave, or whatever the case is. That's that caveat.   John: Correct.   Mark: It's basically the same rules, Nick, as the 59 and a half. It's just is attached to that prior job. But 59 and a half is the more normal one. What's the breakdown there?   Nick: Yeah. Essentially what happens is, at 59 and a half, you are able to take out money from your qualified accounts while avoiding that penalty without any sort of caveats. One thing to keep in mind is that usually you're taking it out from accounts that...   Nick: For example, if you're currently employed, the process of taking it out of the plan where you're employed can be a little bit different, but it's pretty smooth and easy if you have an IRA or something like that outside of the employer plan.   Nick: One other thing that happens in most plans, for people at 59 and a half, is, and we've seen it a bunch lately, where a lot of 401(k) plans have very restricted options in fixed income and those sorts of things, where most or many plans allow people to take inservice rollovers, where they're able to still work at their employer, but roll their money out of the plan to open up some options for investments outside of the plan.   Nick: That's not always the best thing for people. Sometimes the plans are great. Fees are really low. Options are great. So it may not make sense, but oftentimes people do like having the option to be able to shift the money out without any sort of issue.   Mark: Okay. All right. So that's the norm there. You got to love that half thing. You always wonder what the senators or whoever was thinking when [crosstalk 00:06:56]   John: Finally, they got rid of the 70 and a half [crosstalk 00:06:58]   Mark: Yeah. They get rid of that one. Yeah. We'll get to that in just a minute as well.   Mark: John, 62, nothing too groundbreaking here, but we are eligible finally for Social Security. So that becomes... I guess the biggest thing here is people just go, "Let me turn it on ASAP versus is it the right move?"   John: Yeah. So 62, you're now eligible. Like you said, a lot of people are excited to finally get access to that extra income. You can start taking on Social Security.   John: Couple of things to just be aware of is, any time you take Social Security before your full retirement age, you will get a reduction of benefit. At 62, it's anywhere, depending on your full retirement age, roughly 25 to 30% reduction of what you would've gotten had you waited till 66 or 67.   Mark: They penalize you, basically.   John: Yeah.   Nick: Yeah. Actually, if you do the math, it ends up breaking down to almost a half a percent per month reduced.   Mark: Oh wow.   Nick: Yeah. It really starts to add up when you think about it that way.   John: Yeah. We always harp on planning, so important if you are thinking about taking it early, once you make that decision, and after a year of doing that, you're locked into that decision. So it's important to really understand is that best for your situation.   John: Other things to consider at this age, if you do take early, Social Security does have what they call a earnings penalty slash recapture. If you're still working and taking at 62, a portion of your Social Security could be subject to go back to them in lieu of, for a better term, [crosstalk 00:08:27]   Mark: It's 19,000 and some change, I think, this year, if you make more than that.   John: Yeah.   Mark: Yeah.   John: Yeah. Anything above 19,000 that you're earning, 50% goes back to Social Security. [crosstalk 00:08:36]   Mark: Yeah. For every two bucks you make-   John: 5,000 goes back to Social Security. So that's really important.   John: Something that I just want to make, last point on this, is that earnings threshold is based on someone's earned income, and it's based on their own earned income, not household. That comes up quite a bit, while people say, "Well, I want to retire and take at 62, but my husband's still working. Am I going to have a penalty if I take it?" The answer is no. It's based on your own earnings record.   Mark: That's where the strategy comes into play too. Because if you are married, then looking at who's making more, do we leave one person's to grow, as we're going to get into those in just a second, to grow towards that more full number.   Mark: Again, that's all the strategy. It may make sense for one person to turn it on early, and the other person to delay it. That's, again, part of the strategy of sitting down and talking with a professional, and looking at all the other assets that you have, and figuring out a good move there.   Mark: Nick, let's go to Medicare. 65 magic age.   Nick: Yeah. Actually, my dad turns 65 this year. So we've been planning this out for him. He is a retired fireman, so he has some benefits that tie in with his pension.   Nick: One of the things that came up, and just something that people should think about or remember, even if they are continuing to work past 65, is it oftentimes makes sense to at least enroll in Medicare Part A. You can usually enroll as early as three months before your birthday. The Medicare website has gotten a lot easier to work with over the last year or two.   Nick: Part A, the tricky thing is that you want to check with your employer, because usually what happens for the areas that Part A covers, which is usually hospital care, if you were to have to be admitted or certain procedures, it's figuring out who's the primary payer, who pays first, who pays second. So making sure that you coordinate your benefits. Check in with HR, if you're going to continue to work.   Nick: If you are retired and are coming up on that Medicare age, make sure that you get your ducks in a row so that you do enroll. Most likely you're going to start saving some money on some healthcare premiums.   Mark: Technically, this starts about, what, three months early? It's a little actually before 65. I think it's three months when you got to start this process, and three months before and after.   Nick: Yep. Yeah. You can typically enroll three months before your birthday, and then through three months afterwards. There can be some issues if you don't enroll and you don't have other healthcare, at least for Part A. There can be penalties and that sort of thing.   Nick: Frankly, with Medicare and healthcare in retirement, this is a space that we typically delegate out. We've got some good resources for clients that we refer them to, because there are a lot of moving parts, and it can be overwhelming, especially when you start to move into the supplements and Advantage plans, and all these different things.   Mark: Oh yeah. And it's crucial. You want to make sure you get it right. A lot of advisors will definitely work with some specialists, if you will, in that kind of arena. So definitely checking that out when we turn 65.   Mark: Again, some of these, pretty high level stuff, some of this stuff we definitely know. But we wanted to go over some of those more interesting caveats.   Mark: Let's keep moving along here, guys. Full retirement age, 66 or 67. John, just what? It's your birthday, right?   John: It is your birthday. That's the time that you can actually take your full Social Security benefit without any reduction, which is a great thing to do. Then also that earnings penalty we discussed earlier at age 62, that no longer exists. Once you hit your full retirement age, 66 or 67, you can earn as much as you want and collect your Social Security. There's no penalty slash recapture.   John: When that happens, people have some decisions to make. If they're still working, they can decide to take their Social Security. I've had some clients that take it, and they use that as vacation money. I've had some other ones take it, and they take advantage of maxing out their 401(k) with the extra income. Or you can delay it. You don't have to take it. You get 8% simple interest on your benefit up until age 70.   John: So full retirement age, you got a lot of big decisions to make, depending on your situation. But you want to make sure you're making the best for what you want.   Mark: Definitely.   Nick: Just as a reminder to people that that 8%, and you had mentioned it, but it does cap out at age 70. So there's no point in waiting past 70, because it doesn't increase any more.   Mark: Right. Thanks for doing that. It wasn't on my list, but I was going to bring it up real fast. So yeah. People will sometimes email and they'll say, "Hey, I want to keep working past 70. How's that affect Social Security." It's like, "Well, you're maxed out, so you got to just go ahead and get it done." You can still work if you're feeling like it. Your earnings potential is unlimited, but it's just a matter of you're not going to add any more to it. So I'm glad you brought that up.   Mark: John, you mentioned earlier, they got rid of the other half. Thank God. The 70 and a half thing, just because it was confusing as all get out. They moved it to 72.   Nick: Yeah. Required minimum distributions, as a reminder for people, are for accounts that are pre-tax, where you were able to defer taxation. 401(k), traditional IRA, that sort of thing. At 72, you have to start taking out minimum distributions. It starts at around 3.6, 3.7% of the balance. It's based on the prior year's ending balance. It has to be taken out by the end of the year.   Nick: An important thing for people to understand is that, many times, people are taking those withdrawals out to live on anyways. So for a lot of people, it's not an issue at all. However, there are a good amount of people that it's going to be excess income.   Nick: Earlier mentioned, hey, at age 50, really time to check in and start making sure that you're planning. One of the benefits of planning and looking forward is to project out and see, hey, are these withdrawal going to cause you to have excess income at 72, where maybe we're entering into a time that tax rates could be higher, tax rates could be going up, which is fairly likely in the next five to 10 years. So if we know and we can project that, then we can make some adjustments to how we save, should you be putting more money into a Roth versus a traditional, and how we make adjustments on the overall planning.   Nick: So making sure that you understand how those work, and then the impact that it has on other decisions to take into account for that situation, is a huge part of planning.   Mark: Definitely. Those are some important birthdays along the way. You got to make sure you get this stuff done. 72, there's the hefty penalties involved if you don't do that. Plus you still got to pay the taxes. All this stuff has some crucial moments in that retirement planning process, so definitely make sure that you are not only celebrating your birthday, but you're also doing the right things from that financial and that retirement planning standpoint along the way.   Mark: Again, if you got questions, stop by the website, pfgprivatewealth.com. That's pfgprivatewealth.com. You can drop us an email question as well, if you'd like. That's what we're going to do to wrap up the show right now.   Mark: We got a question that's sent in from Jack. He says, "Hey, guys. I've thought about meeting with a financial advisor to plan my retirement, but I've never used a budget or anything like that before. So I'm wondering, should I budget myself for a couple of months before I meet with a professional?"   Nick: Based upon experience, putting expense numbers down on paper is one of the biggest hurdles for people to get into planning. But with how this question is phrased, I would be concerned, because it's kind of like the situation of starting a diet. You start a diet. You're going to eat really good for two to three weeks. You're trying to hold yourself accountable. You're functioning in a way that isn't necessarily your normal life.   Nick: One of the things, as advisors, that we want to make sure that we understand are what are you really spending. It's great to use a budget, but if you're budgeting to try to look good in the meeting, which we've seen happen, you're painting a false picture, and you're not letting us know what the finances actually look like.   Nick: So I would actually say to put down the real expense numbers in place, let's see what it really looks like, and then if we need to create a budget after we've created a plan, then that's something that we can dig into.   Mark: Yeah. John, let me ask you, as we wrap this up, sometimes people associate seeing a professional financial advisor with a budget. Also, people have a cringe to the B word. They think, "Well, I don't want to live on a fixed budget," or something like that.   Mark: That's not necessarily what we're talking about, right? That's not probably what Jack is referring to. He's just trying to figure out, I guess, more income versus expenses, right?   John: Yeah, yeah. The first step is to analyze your expenses. That could be what he's referring to as far as, "Hey, should I take a look? Should I get my expenses down before I meet with someone?"   John: I'd agree with Nick, even if that's what you're looking at, versus the budgeting, I would say no. I think the first step is sit down with an advisor, because they can assist in categorizing the expenses correctly based on today's expenses, versus what expenses are going to be at retirement.   John: I think it's important just to get going rather than trying to prep. Because we've seen a lot of people that have taken ... They've been prepping for years to meet. That's years where they haven't done anything, and they've, unfortunately, lost out on some good opportunities, otherwise, if they just said, "Hey, I'm going to sit down first, see what's going on."   Mark: Yeah. It gives you that built-in excuse.   John: [crosstalk 00:18:26]   Mark: It gives you that built in, "Well, I'm not quite ready." Well, you might never be ready if you play that game. Especially a lot of times when it's complimentary to sit down with professionals, have a conversation. Most advisors will talk to you, no cost or obligations. So why not right? Find out. Just get the ball rolling. That's the first step. It's usually the hardest part too.   Nick: Yeah. One thing that we typically tell people is that we are not the money police. We are not here to tell you that you can't use your money the way that you want to use it.   Nick: The way that we view ourselves, and what our role is as an advisor, is to help you understand the impact of decisions. Whether those decisions have to do with spending money, saving money, whatever, it's to make sure that you understand the impact of your decisions so that you make better decisions. That's it.   Mark: There you go. Yeah. It's your money, at the end of the day, your call, but certainly having some good, well, coaches in your corner, if you will, advisors to help advise, that's the whole point. But I like that. Not the money police.   Mark: All right. That's going to do it this week, guys. Thanks for hanging out. As always, we appreciate your time here on Retirement Planning Redefined. Don't forget. Stop by the website.   Mark: If you need help before you take any action, we always talk in generalities, and try to share some good nuggets of information, but you always want to see how those things are going to affect your specific situation.   Mark: If you're already working with John and Nick and the team at PFG Private Wealth, fantastic. Then you already have a lot of this stuff in place. But if you have questions, or you're not working with them, or you've come across this podcast in whatever way, or maybe a friend shared it with you, definitely reach out and have a chat. pfgprivatewealth.com. That's pfgprivatewealth.com. Don't forget to subscribe on whatever podcasting platform app you like to use.   Mark: We'll see you next time here on the show. For John and Nick, I'm your host, Mark. We'll catch you later here on Retirement Planning Redefined.

On this episode, we'll breakdown a recent CNBC article that analyzes a recent Morningstar study. The study found that most of us have at least one money bias, some of us more than one, and that those biases are very possibly costing us money in our checking, savings, investing and retirement accounts. Listen to see if you might be impacted by a specific money bias and for strategies to get it back under control. Helpful Information: CNBC Article: https://cnb.cx/3KKXSHf PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey, everybody. Welcome back to the podcast. It's another addition of Retirement Planning - Redefined with John and Nick from PFG Private Wealth. We got to fun and interesting podcast this week to talk about, money biases and what those are, and are they costing you a little bit? If you have a money bias and you're going to be probably surprised to find out that you indeed do most people, I think do have biases about a lot of things. So, that's going to be on the podcast this go around. And of course, if you've got questions you need some help, always reach out to theguys@pfgprivatewealth.com. That's p-f-g, private wealth.com. John, what's going on, buddy? How you doing?   John: Hey, doing good. How are you?   Mark: Hanging in there. Doing pretty well. We were chatting a little bit off air and just talking about life, moaning and groaning a little bit, but overall you're doing okay? Hanging in there?   John: Yeah. Yeah. We, we just wrapped up a golf tournament that we hosted with Bern's Steakhouse. It's our second one.   Mark: Nice.   John: Yeah. Finalizing the numbers, but looking like a pretty decent donation to a couple of local Tampa charities here, which are Blue Star Families and then Jackson In Action, 83 Foundation, both a military base. So, so we're excited. It was a great event and we look forward to delivering the check soon.   Mark: That's fantastic. Awesome. Nick, how you doing my friend?   Nick: Doing pretty good. It's been a little bit of a crazy month, but have some vacation coming up, which will be nice, although I'm going to Key West and it'll be my first time going there, so...   Mark: Okay.   Nick: I'm looking forward to seeing what that's like.   Mark: Well, I don't know how you're getting there, but I filled up my truck yesterday and it cost me triple digits for the first time. It was over a hundred bucks.   Nick: Yeah. Luckily I'm flying. So...   Mark: All right.   Nick: We're good to go.   Mark: Well, the inflation numbers came in for February 7.9%. I don't know if you guys saw that at the time we're taping that they just came out this morning, so yay. Right? So people are definitely frustrated and we're kind of concerned. There's a lot going on, obviously the stuff in the world and the market's been reacting to that inflation is up. And so I thought it would be interesting to kind of have this chat. And we were talking about these money biases and how we feel about some of the different things. And I thought maybe it'd be a good idea to share some of this stuff with the listeners. So what we'll do is we'll also put a link to the article. This was a CNBC article guys, that was based off a Morningstar study. And I'll let you guys talk about Morningstar if you'd like to, just to explain that to the folks in a second.   Mark: But the study found that most of us have at least one money bias, some of us more than others, and that biases are very possibly costing us additional money in our checking, savings, or investing in retirement accounts. So, we'll see how this kind of impacts you and you'll kind of learn a little bit about this along the way. So a couple of key points before we dive in is that everybody has different attitudes about money. No real shock there, right? We know that, but that new behavioral financial study from Morningstar found that 98% of the respondents exhibited one or more. So when we say just about everybody has one, that's pretty true and that they are likely costing them some money. So we'll jump right in and get going here and with take away number one. Nick, what are the four main biases that they talked about and that you guys see?   Nick: Yeah, we really wanted to kind of focus on this with this chaotic as the beginning of the year has been. we think that people taking a little self inventory on, on how they might make some decisions would be beneficial. So right. The first bias is called a present bias or really kind of like present time. So really what this focus is on is kind of the tendency to go for immediate rewards over long term goals, or, the good old instant gratification. I would say that, what's interesting is, this can definitely be different for different age bands. So for people that, kind of like in that baby boomer era, they have their toes in this, for sure, whereas younger clients definitely. I would say it's a little bit more dominant just because of the things that they're used to and convenience and instant gratification.   Mark: Sure. The world we have. Yeah.   Nick: Yeah, for sure. And I think this is something that's real important because this become a stronger and stronger bias just with things that we're used to like news cycles and stuff like that. So, so that's, that's the first one.   Mark: Well, let, let me ask you a follow up on that real quick, Nick, before you move on. So with that present bias basically like it's that idea of, I feel like I need to do something now. Right? So like we'll use the market falling as an example. Right this minute we're down about 10% I think in the S&P or into a correction, I guess officially. So I must... I must need to do something now, so I can see the response, the immediate response. That way I feel like I've done something that's really what a present bias is.   Nick: Yep. Very much reactionary.   Mark: Okay.   Nick: Typically, and usually for most people, taking action at something like this, it's oftentimes too late. So that can really turn into this kind of yo-yo effect of, waiting where this is one of the things that lead people to buy high in sell low, which is kind of the opposite.   Mark: Which is the wrong. Yeah. Okay.   Nick: Yeah.   Mark: So that's the first one.   Nick: Yep. And then second one, is what's called base rate neglect. So really what happens is, this is kind of focused on how you judge the probability of something happening based upon new information, while you essentially ignore your original assumptions. So this is something where, for example, the whole concept of best laid plans. So this is where planning can really come into play, where might get a call from a client that, maybe it's a certain sector of the market. Hey, I want, I really want to jump into this certain sector of the market and they're not taking into consideration that maybe they already have exposure to that.   Nick: Or again, maybe it's a little bit too late and they're forgetting all of the effort and all the time that has been put into kind of creating the overall plan and then overreacting to good or bad news. And, this is definitely something like, for example, for myself, right. That I have to have, people remind me, I know that this is something that happens to me where it's like, because I do try to consume a lot of information and process, a lot of information and news where, dependent upon what's going on. This can kind of throw me a little bit for it.   Mark: I gotcha. So let, let me, John, let me of get you in here on this for a quick second. So for example, what I'm hearing then, so the NASDAQ for example, is technically into bear territory now, cause it's down 20 plus percent. So people calling up and saying, Hey, I need to get out of tech might be an example of this base rate neglect because they're seeing the current situation and they're reacting to the news versus does it make sense for their overall long term strategy?   John: Yeah. A hundred percent. It's the whole, kind of going into behavioral finance where it's, you're selling out when, when you shouldn't be, in reality, now's the time you know, if, as Nick mentioned, it's probably too late at this point.   Mark: Sure. Right.   John: It may be best just to stay of the course and stay in it, but a hundred percent that's kind of what we typically see.   Mark: Okay. All right. Go ahead Nick, what the third one for us?   Nick: Sure. So third one is overconfidence. This is an interesting one. Also, one that I know that I have a bias, where it's the whole concept of putting too much weight in your own abilities to make good financial decisions.   Mark: Sure. Yeah.   Nick: So, another way to think about this can be, is wanting to be right. And we tend to all want to be right. But then sometimes we will, double down or not take into consideration a concept of like a sunk cost where Hey, we're not always going to be right. And sometimes it's okay to make mistakes. You just want to learn from that. Oh definitely. And not double down, triple down, that sort of thing. So understanding that there's law of large numbers and there's efficiencies in different areas of the market and or planning. So being over confident, and again, this is something where if you look at the pie, you want to have your plan, your investment strategy, all that you want that pie to be, around 90% or so of the very strong part of your fundamental long term plan.   Nick: So sometimes having some of these biases on a small portion will help you really learn, usually people don't, they try to do it on a much larger portion. So that's a little bit of a takeaway too, is in moderation. Some of these things can be good because there are places where you can have a lot of upside that if you do it with the right amount of money and you take a little bit of risk with a smaller amount of money can help you kind of work through some of these biases without over overacting over correcting.   Mark: Oh, definitely. And if you think about the overconfidence bias here, Nick, I mean, we've basically been on a 12 year run, 12 plus year run with the market. So everybody's been feeling pretty confident. I mean, 1920 and 21 all finished up with double digit years.   Nick: Right.   Mark: So it's easy to feel confident when, when everything's going up, everybody's a genius, right?   Nick: Oh yeah.   Mark: So it's when it's going down that you start to get a little more concerned and maybe that overconfidence comes into play. And since we mentioned down, go ahead and go to the fourth one, which is the final one.   Nick: Sure. So the fourth one is going to be loss aversion. So a classic case of this is, because there's different types of risk as well. And one of the risks that we talk about sometimes are inflationary risks, which we're seeing now. So in other words, for people that might be way too heavy in cash over prolonged period of time, or they're afraid to take any sort of risk, they don't necessarily think about the trade off. So they, again, this is the concept of having a plan and having balanced, not only in your investments, but in your strategies and your overall planning is really important because as we see, sometimes people's thought processes, well, hey cash, if I'm in cash, it's okay. I just don't want to lose my money while, in times of massive inflation or just compared to other areas of the market, there can be significant downside to, the concept of what some people may think is no risk can actually have quite a bit.   Mark: Okay. So those are the four biases then. So you've got the present bias, the base rate neglect of the overconfidence bias and the loss aversion. So John here's the interesting part to me about this whole thing is take away number two, is that 98% of people are exhibiting at least one of these, what they found was the lower, the level of bias, the better your overall financial health. So if you only have one let's say of these four, then you're probably in better shape than someone that has two, which again, it kind of makes perfect sense, but there was some interesting statistics and information in this. So why don't you talk to me a little bit about that?   John: Yeah, yeah. That is pretty interesting. Basically the lower level of bias you have, the better financial health you end up having. And it's one of the ones here is like the present bias where basically research showed, if you have a low level of present bias, you were three times as likely to spend less than the money you that you make. So basically you're going to be saving more money. So again, it's kind of... You kind of look at this in life. You don't have that instant gratification. You're kind of looking at the long term of, Hey, I don't need this today. You know, if you go to the store and buy something, do I really need that now? No, I don't. I can hold off on it. You know, just making better financial decisions all around when you kind of break it down. Another one that was interesting with, with that, with the present bias was there's seven times more likely to plan for the future.   Mark: Yeah.   John: So, so I get... [crosstalk 00:11:36] go ahead.   Mark: I was trying to say, so what I'm hearing there is then, is if they don't re... If you don't react, if you don't give into the instant gratification bias, you typically were a better saver. Sounds like.   John: Better saver, better planner, just not reactionary to what's going on. So it's really the long term goal seems to be in mind with these type of people.   Mark: Seven times more likely. That's pretty good.   John: Yeah. It makes me think I need to... I need to be a little less into gratification for myself.   Mark: There you go.   John: You know, it's, I'm getting off topic here, but it's funny. I was talking to my wife the other day with, we got Disney plus for the kids.   Mark: Sure.   John: And it's like, oh, I want to watch this. And I started thinking, I'm like, man, I just remember just sitting there looking at the guide until, a TV show would finally pop on or a move I wanted to watch because you couldn't watch things right away. You back in the late eighties.   Mark: And in those places, it's great. Right. We enjoy that kind of stuff. But then what happens to this kind of this point is next thing you know, you've got 12 subscription services and you're not using them all. So yeah.   John: Yeah. So anyhow, starting off on a tangent.   Mark: No, you're fine.   John: But yeah, another one would be, overconfidence, lower level bias there. They found that people would have basically more savings. So again, back when Nick was staying with overconfidence in and I fall into this quite a bit, it's like, ah I have some time I can build that up or whatever. And I've seen this quite a bit with some retirees. So, if you're not over, you tend to save a little bit more and last one is the loss aversion of having lower 401k balance, the less bias you have towards that, the more apt you are to take a little more risk and save more into your 401k. And just as Nick mentioned here, not sit in cash and try to outpace inflation.   Mark: I gotcha. So yeah, if you, if you're a bit more overconfident, you feel like you can kind of well, I'll take some chances, right. Because I can get it back. So therefore I can build that savings back up or whatever the case is. So really interesting takeaways from that standpoint, when you think about it, because we all fall into one of these, whatever it might be. And so the lower level of money bias, typically the better financial health. Nick, so talk to me about some of the solutions Morningstar offered because they called it build a money life that fits your priorities, which makes a lot of sense for what you guys do as advisors to kind of find that right mold or fit for the individual.   Nick: Yeah. So it's pretty interesting in... We joke a decent amount of time with clients and among each other that, our business is probably 20 to 30% finance and 70 to 80% therapist. And really it's helping people with these sorts of things. So some of the things they talked about as far as what they call building a money life is kind of put some speed bumps or have a process in place for your decision making. So, one of the things that we try to get our clients to do as an example is that we have the... Because we are a planning focus firm and we use planning tools and software to help people model out different scenarios, we try to get them to start thinking through that realm because a lot... People have often like the quite, well, what about this?   Nick: Or what about that? Or should you know, one of the most common is, do I put extra money towards the mortgage or do I save some money? And the answer for everybody is different based upon what they've done up until that point. And so, for those that work with us, what we try to get them to do for those speed bumps is to say, number one, number two; number one, if there's something that you're concerned about, walk us through, what is the scenario that you're concerned about? So for example, if you're concerned about, the cost of fuel, cost of inflation, those sorts of things, in what way are you concerned about how that applies to you specifically? So not just the world and everybody on the news and all that kind of stuff, but how does it involve you specifically?   Nick: And so, okay. So, sometimes what people realize is that it's not going to impact their life in a dramatic way. It could have some sort of impact on, the economy and those sorts of things. But most of the times it's not going to have a massive impact on their life. And then we take it. So maybe, we figure that it could have some sort of impact. So then we can kind of go to the planning software and kind of model it and say, okay, well, if these things happen, let's take a look and see what it looks like. And okay, so now that you see what it looks like, here are some of the decisions that you can make to bring that sort of risk down and have a little bit of clarity. And then we can go ahead and try to implement those decisions.   Nick: So instead of just these open-ended concerns of things that are not in anybody's control, let's look at the things that we do have in control. And those decisions that we can make to impact and make it easier. And kind of referring back to what we talked about earlier, where that kind of high level of base rate, and then the overconfidence for lower savings and checking, sometimes what ends up happening is that, and we try to remind people of this is, having a solid base of savings, cash savings is your permission slip for a lot of different things. So when people look at and realize like, Hey, that this is... These are exactly the times that we emphasize having this cash handy because we can deal with these fluctuations in the market. We don't have to make irrational decisions because you've built this buffer and you've given yourself this permission slip to deal with these different sorts of circumstances.   Mark: That's a great point. Yeah.   Nick: Yeah. So that can be interesting. And then if, you're doing it on your own, maybe making some sort of process where, hey, you've got a couple of rules that you take into consideration where once you get to certain gains on an underlying investment, you're okay selling, or you sell with half and maybe you let the rest of it ride. Or you just kind of give yourself a buffer time. You know, sometimes people will joke that they have rules for emails, like when they're mad. So, give it an overnight, you're ready to fire off an email, maybe it's to a coworker it's to a family member, whatever.   Mark: Right. Yeah.   Nick: Or text message.   Mark: Wait till you cool down.   Nick: Yeah, wait to cool down. And, or maybe haven't had an adult beverage and give it a little bit of time because oftentimes, when we sit on it, we see that maybe even though we didn't think we were, maybe we were a little over confident in what our thought process was previously.   Mark: So yeah. I like that idea, John, what do you think? Like one of the things they had on there, and I think this is a good idea was the whole, wait three days to make an important decision. I'll use an exam... I mean, you've got the little ones there. That's great advice to try to, raise kids on as well. My dad used to do that with me. Hey man, if it's a good idea, on Monday, it's still going to be a good idea on Friday. Right. But if something changed or you don't feel like it's a good idea, then it's good that you waited before you took action. I've been thinking about buying a muscle car here recently. And of course, gas prices have got me second guessing that. So I went and looked at one last Friday and I still haven't made a decision because I wanted to take that time to make sure I was making that right choice. Right. Don't... That's that instant gratification, I guess, take a few days... [crosstalk 00:18:48]   John: [crosstalk 00:18:48] A hundred percent.   Nick: [crosstalk 00:18:49] Or you might be getting a really good price right now. I mean...   Mark: Well, that's true too, but.   Nick: So if you really want it...   Mark: What do you think, John?   John: I think it's always best to wait a couple of days to see if that's something you really want. I think, like you said there, it's going to be there, and the price could jump up in three days in this environment. But I think it's always best kind of way it a little bit before you make financial decisions. So you ultimately feel comfortable with decisions that you made. That it wasn't kind of an impulse buy or decision...   Mark: Right. [crosstalk 00:19:20].   John: That could affect the rest of your life.   Mark: So, well, the speed bump idea was really good, right? The Morningstar, they called it speed bumps to place your... Slow down your decision making as Nick alluded to. And if you think about the stock market, right, they've got those circuit breakers in place. We saw that with COVID right. When the circuit breakers would kick in to prevent any more trading because it was falling so fast. So if you want to kind of use that same analogy, have some speed bumps or some circuit breakers in place for your decision making process. So lots of different ways we can look at it.   John: Yeah, another one in the article I was reading through is really, and it goes back to what we're saying here, and what we always say is having a plan, a sense of direction and to tune out the news and really stop taking advice from your friends where it's basically, "hey, I did this", or "I'm buying this." And especially with, we don't advise on crypto, but you know, "I'm buying some crypto" and stuff like that. It's really, have your plan and stick to what your plan is for versus listening to what other people are doing. That was also in the article, which I thought was an interesting point.   Mark: Yeah. Very good points. Well, I tell you what, like I said, we're going to link this into the, to the show notes and information there. So if you'd like to check that out, you can. And as always, if you've got some questions, we'll wrap this up this week about a money bias, your own money bias, which one you may be affected by. You should be able to tell if you suffer from the present bias that give me now thing, that base rate and neglect where you just react to the news, the overconfidence of feeling like you've got it all figured out, you've mastered it all. Or maybe just the loss of version where that fear of losing money, just really kind of cripples you either way, it could be costing you money. So reach out to the guys, if you've got questions on how to control this.   Mark: And I think that's some of the value that an advisor brings to the table is they're not going to have those biases about your portfolio plan because it's not their money, right? So they're there to help guide you and be that sounding board and be that coach. So reach out to John and Nick, if you some questions at PFGprivatewealth.com, that's PFGprivatewealth.com. Before you take any action, you should always check with a qualified professional, like the guys, they are financial advisors at PFG Private Wealth. Don't forget to subscribe to us on Apple, Google, Spotify, or whatever platform you'd like to listen to. And if you'd like to learn more about some of those charities that they were... John was talking about earlier in the show, or maybe attend the next time they do one of those events, again, reach out to them at PFG Private Wealth. For John and Nick, I'm Mark, thanks for hanging out with us. We'll see you next time here on the podcast, Retirement Planning - Redefined.

For thousands of years all drawings were 2D, but in today's digital age anyone can create 3D digital models. With all that 3D drawings offer, why would anyone want to keep their drawings on paper? Are 2D drawings really still necessary, or should we transition to 3D only? To shed some light on both sides of the debate, on the latest Digital Battle Thom Singer and Craig Brown welcome back Digital Enterprise Society Content Trustee Mark Pendergast for another round, this time about drawings.  There are strong arguments for both keeping and eliminating 2D drawings, and with strong opinions on both sides from Mark and Craig, and maybe even some switching sides, this is a digital battle you won't want to miss.   On today's podcast, you will learn: An overview of 2D vs 3D according to Craig 2D is just the way it's always been done. Precision manufacturing enhanced 2D drawings were used by skilled craftsmen to obtain key measurements. The evolution of 2D drawings came with what was needed on the factory floor. The three-dimensional model offers infinitely more views than the 2D model, for better and for worse. Transitioning to 3D models requires a willingness to change, which isn't easy to come by. The end of 2D models will come when only machines are making parts.   An overview of 2D vs 3D according to Mark There will be reasons to live in the 2D drawing world forever. Commercial and legal requirements will always demand 2D drawings. Manufacturing is still largely stuck in the 19th century, which demands the specificity of 2D drawings. The 3D drawing doesn't draw your focus into any one point, while a 2D drawing clearly highlights the critical points. The clarity and specificity of what is important drives the value of 2D drawings. 2D drawings can more easily be shared and understood by anyone.   The challenges of eliminating 2D drawings Manufacturers don't always have access to the technology required by 3D drawings. 2D drawings don't require specific software sets or tools to be read. 3D drawings need to be auto-generated and free to be widely accepted by manufacturers.   Hiding and sharing proprietary information Proprietary data structures are challenged when 2D drawings are eliminated. Hiding proprietary information is easier with 2D drawings. There is significantly more control with 2D drawings. 2D drawings allow for specific communication of what you think is important, while the 3D model requires that you share everything.   Finding the right balance between 2D and 3D Paper clearly isn't going anywhere anytime soon, so a balance must be found. If a 2D model exists, generate a 3D model as well. 3D should be the king and 2D should be generated only when needed (according to Craig). 2D is king and 3D is around only because it makes it easier to make 2D (according to Mark).   Continue the conversation with us within the Digital Enterprise Society Community at www.DigitalEnterpriseSociety.org.   Digital Download: Virtual Round-Table Series

In every way, people have the most beautiful dreams deep inside, but often lie buried. Mark and Crystal Hansen share how a simple ASK! will uncover that which is hidden. Mark Victor Hansen and Crystal Dwyer Hansen have been married for ten years, parents to their combined five children, and Grampy and Mimi to six precious grandchildren. You probably know Mark Victor Hansen for the Chicken Soup for the Soul Book series with over half a billion books sold. He is a prolific writer with 307 books authored or co-authored including The Aladdin Factor and The Power of Focus just to name a few. Crystal Dwyer Hansen is a transformation life coach, wellness and nutrition expert, and author of her book, Skinny Life. Both are international speakers and entrepreneurs.   "You don't get what you deserve in life. You get what you ASK! for.” ~  Mark Victor Hansen   CONNECT with Mark Victor Hansen CONNECT with Crystal Dwyer Hansen BOOK: ASK! Enjoy the multitude of topics discussed including presence, love of words, naiveté, and God's bucket list plus so much more. Lifestyle Presence COVID-19 Grandkids Love of Words Mr. Reinhart Dr. Ben Carson Nurture The Dance Teacher Rita Davenport ChildHelp.org The Fable Naiveté Model Opportunity ASK! Yourself Well-being God's Bucket List   CONNECT with Mark Victor Hansen CONNECT with Crystal Dwyer Hansen BOOK: ASK! "Do I love myself enough to give myself the best?" ~ Crystal Dwyer Hansen #MyStrengthIsMyStory #CreateYourNow #ASK Quotes and statements within the interview: "We've talked to 7 million people and got more airline mile I think in our butts than anybody in it." (Mark) "There's just something about being in their child-like presence and exuberance that puts you back into your child-self." (Crystal) "I wis in remedial reading from first to sixth grade." (Mark) "I grew up in a family of nine children, same two parents. I was the third eldest child. So I had a lot of responsibility but I would say, you know, I also had a lot of love." (Crystal) "I'm just so thankful that my mother questioned, you know, she ASKed the right question." (Crystal) "If they learn how to get on the ASKing journey, they'll pivot." (Mark) "I'm limited to what I know." (Crystal) "Start from the nth degree in mind Start with your greatest imagination because God gave you this imagination." (Crystal) "You literally start to engineer your perfect life backward from the question, from ASKing the right question." (Crystal) "We believe totally and absolutely that everyone is coded at birth of DNA and RNA with some destiny." (Mark) "You cannot ask anything without getting an answer, now it may not be immediate. But it's inevitable and ultimate." (Mark) "When you read this book, really open your heart to the messages that it's giving you because as you become more like a child, you're also walking in faith and trust instead of walking in worthiness because children believe they deserve everything."   What has your story gifted you? A wonderful, wise wife "My ASKing has gifted me the most beloved, wonderful, wise wife that a man could ever want to have or experience." (Mark) Breakthroughs "My ASK has gifted me, you know, basically with breakthroughs that just have allowed me to experience so much success and so much joy in my life and overcome, you know, everything that I needed to overcome basically. Truly." (Crystal)   Resources mentioned in the episode: CONNECT with Mark Victor Hansen CONNECT with Crystal Dwyer Hansen BOOK: ASK! BOOK CLUB Mark Victor Hansen Facebook: https://www.facebook.com/MarkVictorHansenFanPage Instagram: https://www.instagram.com/markvictorhansen/ Twitter: https://twitter.com/MarkVHansen LinkedIn: https://www.linkedin.com/in/markvhansen/ YouTube: https://www.youtube.com/channel/UC1WRGxfPQ5JMQL-NDa_jO8Q Crystal Dwyer Hansen Facebook: https://www.facebook.com/crystaldwyerhansen Instagram: https://www.instagram.com/crystaldwyerhansen/ Twitter: https://twitter.com/CrystalVision LinkedIn: https://www.linkedin.com/in/crystaldwyer/ YouTube: https://www.youtube.com/user/CrystalDwyer "One step at a time leads to miles of greatness!"   Subscribe to Create Your Now TV on YouTube. Listen to Create Your Now on Spotify and Pandora. Listen to Create Your Now on iHeart Radio. Click here. The Create Your Now Archives are LIVE!! You can subscribe and listen to all the previous episodes here.  http://bit.ly/CYNarchive1 and http://bit.ly/CYNarchive2 and http://bit.ly/CYNarchive3 and http://bit.ly/CYNarchive4 and http://bit.ly/CYNarchive5 and http://bit.ly/CYNarchive6 and http://bit.ly/CYNarchive7 Contact me at YourBestSelfie@CreateYourNow.com THE NO FUSS MEAL PLAN Instagram @CreateYourNow @Kristianne Wargo Twitter @KristianneWargo @CreateYourNow Facebook www.facebook.com/TheKISSCoach www.facebook.com/CreateYourNow   PERISCOPE USERS!!! 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This episode of the Live Better Seller Better Podcast features Mark Kosoglow, VP for Sales at Outreach. To sell effectively, sellers must be passionate about what they're selling but also understand the reason why their buyers are so passionate about buying too.Mark shares their discovery framework and how it is the job of the sales rep to create the hype and demand around their product. He explains the two ways to create demand, namely aspirational and pain selling, and how you can use these strategies to unsell clients on what they have and buy into yours.To close, understand that what buyers want, like lower prices, must come as a trade to what you want. The skill of negotiation uses "sales judo" by throwing questions and objections right back at clients. Nine times out of ten, clients end up answering their own questions.SHOW NOTESHIGHLIGHTSBe passionate and understand why people are passionate about buyingBuild reps' confidence by embracing risks and being supportive of managersCreate a discovery framework and create demandTo sell someone something new, unsell them on what they haveIdentify champions and sell to themClose effectively: Ask 'are you willing to buy?' and negotiate a tradeLive better advice: Leaders need to make a conscious decision to enjoy peopleQUOTESMark: "I think that the thing is you can understand how they buy, but the more important part is why they're passionate around buying it. So go figure that out. Get yourself pumped up. If you're not excited about what you sell, KD, get out."Mark: "We have a saying here, let your passion overcome your professionalism. You're so worried about selling smart, you're so worried about phrasing stuff the right way that you're not afraid to get a little ugly, a little dirty."Mark: "I should be able to do, in two meetings, get you so hyped up about what we're doing that you go create the budget, authority, need, and timing."Mark: "There's two ways to create demand, one is aspirational selling which means they want to go up to something that they aren't currently at, and the other one is pain selling, meaning they want to go from somewhere they are up to a different level." Mark: "Sales judo is a very subtle and awesome thing in that people forget you don't have to give the answer every time. They can give an answer to their own question, and they will, if you give them a chance."You can find out more about Mark in the links below:LinkedIn: https://www.linkedin.com/in/mkosoglow/Website: https://www.outreach.io/

Fire extinguishers, airbags in your car, and smoke alarms in your house are all examples of things in life that don't really seem to matter until they're the only thing that matters. On that rare occasion when you need one of those items, you'll either be very glad that you have one, or really regretting the fact that you don't. Let's talk about some of the things in the financial world that don't matter until they do. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey everybody, welcome in to another edition of the podcast. This is Retirement Planning - Redefined, with John and Nick from PFG Private Wealth. And we're going to chat today about some things that don't matter, well, until they do. And I've got some pretty good examples of that, so we're going to get into that in just a second. But I don't know, Nick, I feel like I should pick on you a little bit. Things that don't matter until they do, is that the Buffalo Bills again this year or what?   Nick: Those are fighting words. It's a good thing we're in a different state. Now, what's your football team?   Mark: I just had to pick on you because of the whole Tom Brady thing. I was going to talk to you about it, so you just couldn't get away from this guy, right? He was kicking your butt in New England, then he comes down in your backyard and still knocks your team out. I actually felt for you this past playoff, so.   Nick: Yeah, it's all good. We've got a real quarterback now so I'm okay with it.   Mark: Yeah.   Nick: I'm not a complete...   Mark: My team is total garbage, so you can pick on me all day long, so it's no worries. My team is the laughingstock of the NFL pretty much on a regular basis.   John: Are you a Panthers fan?   Mark: That's close. You think I would be because, same thing with you guys, I'm next to the Panthers so you think I would be. But no, I'm a Cowboys fan. Yeah. It's the worst.   Nick: Nah. Trust me. It's not the worst.   Mark: We get a lot of flack for Cowboys fans. That's for sure.   Nick: Yeah, but it's not the worst.   Mark: Gotcha. John, what about you? Do you pull for anybody?   John: The Patriots.   Mark: Oh my God. Wait, what? Oh my gosh, you two must have really gone back and forth.   John: Yeah, I grew up in right outside of the Boston.   Mark: That's right, I remember that now yeah. So you guys have had some fun times over the last few years, haven't you?   Nick: John used to ask me to watch games-   John: He refuses.   Nick: I couldn't be around. I couldn't be around people in public watching the game, but now that they're a little bit better-   Mark: They had a great year last year, they really did, so.   Nick: They made the playoffs three out of the last four years.   Mark: Yeah, they did. They're definitely on the run. So I just had to give you a little bit of a hard time, but it's all good. It's all good.   Mark: So listen, things that don't matter until they do. So here's some real examples, like a fire extinguisher, right? Who thinks about a fire extinguisher until you need one? Or the airbags in your car or smoke alarms in your house, all these things we just don't pay any attention to until we actually really need one. And then we're awfully glad that they're there.   Mark: So I've got a couple of these financially speaking fellas. So talk to us about the importance of why these things can be kind of out of sight, out of mind. But man, we really need to have those ducks in a row. And let's just start with an easy one, legal documents, right? Won't matter until they do, but when you need it, man you're going to be glad you've got it in place, and right.   John: Yeah, this is a great example of that. And where when you're living and this happens is you have some type of health event and I just had a family member who just got an accident and healthcare surrogate had to step up and make some decisions and help them out during that process. So that's something that you really need to consider doing some of these things. Meeting with an attorney that's qualified to do this stuff, to make sure that your ducks are in a row.   John: And the unfortunate one where it's too late is if you pass away and then now your beneficiaries are dealing with whatever estate, whether it's trust, wills, documents that you did or didn't do. I'll tell you from Nick and I have helped a lot of clients kind of navigate that, if it's not done correctly it can be a nightmare for your beneficiaries just to figure out where everything is and who is responsible.   Mark: Yeah. And it's one of those things that's easily avoidable, right Nick? I mean, this is not that hard to fix. This is, of the low hanging fruit that can be out there, you can do this stuff pretty easy. Especially things like beneficiary designation, updating those, so on and so forth. Wills and trusts, sure, they can be a little more complicated, but even that it's not that complex. You've just got to get with an advisor and an attorney.   Nick: Yeah. What we've seen is that often times people don't personally know an attorney or somebody in this space that can help them. Or, if they do, they're private and they don't necessarily want them to know everything about them. Or we'll see people that just... It makes them extremely uncomfortable to talk about death, dying and, or being sick.   Nick: And so it's a classic avoidance behavior. And like we had talked about previously, time flies and all of a sudden it's five or 10 years later, and your mom and dad that you've had listed as the beneficiaries are no longer alive and kids are grown up or you had another child that's not listed anywhere. Or maybe you got divorced or remarried.   Nick: All these things happen and if the documents aren't in place or they're lagging and inaccurate, it can turn into quite a quagmire if something happens. And I'll say this too, is oftentimes when people think of the legal documents, they think of death and not necessarily what John referred to as far as healthcare proxy and a power of attorney, those sorts of things where there's a health event and you're still alive, but you need help making decisions and that can really get pretty squirrely.   Mark: No, I agree with you. And I think the other one we hear sometimes too as well, is, that's for rich people, right? A trust is for rich people or so on and so forth. And it's like, okay, that's not really the case. And it's really not as expensive to get some of this stuff taken care of as we often think it is. I think we build it up in our mind or whatever. We just kind of have this, oh, that's for rich folks or it costs too much money so I'm just going to avoid it. Pretty easy to handle this stuff.   Nick: Yeah, I would say that's accurate, as well as, and we've talked about the run-up in the markets over the last five or 10 years. There's a lot of people that, seven, eight years ago they maybe had a third of the money that they have now. And so they still kind of are in the same train of thought or the same thought process. And they don't realize maybe what they perceive... They still think of themselves in that same way as they did eight to 10 years or even 15 years ago. And there's a little bit of disbelief. And so it kind of leads into kind of procrastinating and you almost have to kind of take stock and realize, okay, hey, this is something I really need to get done.   Mark: Yeah, exactly.   Mark: Well, that's hopefully what we try to provide here on the podcast is there's a little useful nuggets of information that might spark that conversation. And speaking of which, John, life insurance, not something that you're really popping up at the dinner table saying, "Hey, let's have a rousing conversation about life insurance." Right? It doesn't kind of go that way. But, again it's one of those things that don't seem to matter until you need it. And it can be quite important and quite useful tool.   John: Yeah, a hundred percent. I'll say this is probably one of the most disliked conversations for people, is talking about life insurance and what happens after if they were to pass away or a spouse or whoever.   Mark: Right.   John: Especially with children, because when you have kids, and I have two daughters, one of the big things you look at is, I'll use myself as a scenario, I'm gone. So there's my income gone for the next 20, 30 years. So you really want to look at it from that standpoint when you're talking about needs planning for life insurance is... I'm no longer here. My income's no longer providing for my family. How do I replace that? And really life insurance is a great vehicle to go ahead and replace someone's income for a 20, 30 year period. And there's ways to back into what amounts are correct, but definitely something you need to look at when you're doing a plan.   John: And going into retirement can be the same way depending, and Nick mentioned it on the last session where everyone's situation is different. Well we've had scenarios where, there may be still is a need for life insurance in retirement because maybe one person has a heavy pension. And if that person passes away, that pension now is gone. And maybe that's a big requirement for the plan to work.   John: So everyone's situation is different. It's definitely something that needs to be considered. You just want to take a look at it and see what would happen if someone did pass away and there wasn't any life insurance. I'll say a lot of these things that we're going to go over too, I think it's easy to address, there's definitely people that can help you out. And it's just a matter of getting it done. And once it's done it just kind of provides a nice peace of mind that it's kind of like a bandaid, just do it, rip it off.   Mark: There you go. Exactly. I think life insurance too, I will be honest. It's a very important tool even for retirees, there's a lot of ways it can be used. It's not our daddy's Oldsmobile like those old commercials. There's just so many different nuances now to life insurance, where it could be a useful tool for various times of life, but I can't help but thinking of Ned Ryerson and the Groundhog Day movie, when he comes up on Bill Murray, that insurance guy. I think that's what a lot of times people think of when they think life insurance or life insurance agent, and it's just changed so much. But it is a great movie.   Mark: Lifetime income streams. We kind of talk about this fairly often, but I mean, look, it's one of those things maybe you don't think about. You think, well, I've got these accounts, right? I got all this stuff, but how do I turn it into money because I do need money all through my retirement? I need a paycheck coming in.   Nick: Yeah. So, one of the things that we'll say is that in retirement, income is king. Assets are great and assets are the thing that people love to talk about and kind of chat about, but income is king. And I'll say too that everybody knows about social security. They realize in theory it's important, that sort of thing, but many people, and this is something that we'll kind of review with people often, is that they don't quite realize like, well, hey, if your household is getting $60,000 a year in income from social security, which these days, a lot of people are. That is really equivalent to between one and $2 million of nest egg assets from the standpoint of generating a saving [column 00:09:37] , having it last your lifetime and getting inflationary raises.   Nick: So, building a portfolio or an overall strategy where, we've got quite a few clients that they have rental properties, that rental income, they purchased a property a little bit when they're younger. They get the house or the property paid off, and the rental income supplements their income in retirement.   Nick: John referred to pensions, that can be a big deal. Annuities can provide a guaranteed income as well. So, trying to balance forms of guaranteed income with assets can be really important. And just a little caveat to throw in there, although income is king, it is important to have assets. So the reason I say that is we have had some clients come to us that have been, whether it's between social security and pension, they've been income rich and asset poor, and that can also lead to other issues as well. So a good balance is really just like so many other things is really the most important part.   Mark: Well, balance is key, definitely balance is key to anything. And we all know we got to have these different forms of, or we have to have some income coming in, in retirement. But having the multiple streams and turning things on at different times, and whether you want to call it bucket strategies or laddering or whatever the case is, but just having these different various forms to be able to pull from at different times is going to make obviously all the difference in keeping up with our retirement. Because nobody wants to go backwards in their lifestyle in retirement. They want to kind of continue on the way they have been, or maybe even more so in retirement. So that's some things that- go ahead.   Nick: And let me jump in on that too, that point that you made about not going backwards or maintaining is important. Because there are times, and I've had this happen a couple of times, when it comes to retirement and income in retirement and when it comes to life insurance, two of the topics that we talked about, in people's minds they have an enormous amount of confidence that all of a sudden they no longer need any of the things that they've wanted and bought for the last 25 or 30 years. It's like all of a sudden they flip the switch and it's going to be the cheaper food, the cheaper restaurants, the cheaper car-   Mark: I've got plenty of clothes. I don't need to buy any new clothes.   Nick: Yes. And in reality, people don't live like that. And so that's an important-   John: In reality, it's typically the reverse. They have more time on their hands to go buy things.   Mark: Right, yeah. My dad always said every day was a Saturday when he got to retirement and he spends the most money on a Saturday, so, that always stuck with me.   Nick: Yeah most people live in a state of want versus need and it's often, that's a pretty common thing, so anyhow.   Mark: That always stuck with me. That's a great point. Well, I'll tell you what, that's some things that don't matter until they do so, again, whether it's legal documents, pretty easy fix, life insurance, certainly a worthwhile conversation to have no matter what stage of life you're in. And making sure definitely that you've got those income streams set up for life. Some key topics there that we talked about this weekend.   Mark: We're going to take some email questions and wrap up because we want to get back to a couple of these here. We haven't done these lately. And of course, anytime you submit a question, you're going to get your question answered, but to just talk about someone here on the show, we kind of do those from time to time. If you'd like to drop a line, go to pfgprivatewealth.com, that's pfgprivatewealth.com or call (813) 286-7776 if you've got some questions for your own situation that you need to get answered, and the guys will certainly tackle those for you.   Mark: But for right now, let's see what we got from Linda who had sent an email question. And guys, she says, "Fellas, my daughter just turned 18 and I'd like to help her get off onto the right foot with some retirement savings. What's a good idea for something to get her started with?"   John: Yeah, I'll take this one. So, we've had this come up quite a bit with some of our clients and their kids, when they turn 18, they want to just get them used to investing or just understanding it which we think is very important. Some of the things we've done, it just depends. If the child is working, we might do a Roth IRA where we'll go ahead and just open up a Roth retirement account. It's a great vehicle for kids because they can tax free money in retirement. They could use it for a first time home purchase, et cetera, et cetera. So we've done that. We've just got to make sure that they're working because you need earned income to contribute to a Roth.   John: If they are not working, there's definitely some kind of joint accounts you can set up, but it's definitely a good thing to do. Because I'll tell you, we've done that for some clients and we've had those kids become clients early, right when they graduate college. And they're pretty aggressive in saving. I have one where, as soon as he graduated he got in touch with me and then just started aggressively saving in his early twenties, which is very uncommon. And now he's early thirties and he has a pretty sizable nest egg. And now he's got kids and all this stuff and he can't save as much because he does not have as much discretionary income. But it really set that foundation for him to really start saving for retirement, understanding how important that is.   Mark: No, I think that's awesome that you're having some people do that, especially at a younger age. And so kudos to her for getting her daughter start off on the right foot. And for people that just in general kind of have that interest. I had a young kid that I knew for a couple of years ago that used to work for me. Same thing. Early on he was very into saving money for his future self, which is fantastic. I think because his parents hadn't done a very good job and so sometimes we see that mental shift, right? Where you see your parents do something and you want to do the opposite and so on and so forth. And in this case, that was a good thing.   Mark: So very cool question. Thanks so much for submitting that. Hopefully that helps you out a little bit and keep listening to the podcast. We certainly appreciate it. And let's do one more guys before we wrap up here, [just 00:15:13] go around, and we've got one from Patty. You guys got to put on your counselor hats here. Patty says, "My husband and I argue almost every day about money because we haven't done a very good job planning for our retirement and it stresses us both out. Is this a normal thing between spouses or do we need some serious help?"   Nick: So I'll jump in on this one. So, there's a couple of things here. So the first thing is that this points out specifically the importance of a plan. And what we mean by that is that when there's not a clear picture of what people actually have, what their life actually looks at, when there's a high amount of uncertainty on the future, that's when there's often anxiety and bickering, arguing those sorts of things when it comes to money.   Nick: And so, step number one is take an inventory, build a plan. So once that's done, if it is truly terrible, then you can fight, but at least let's figure out what's there. But all joking aside, so then the next step is to kind of come to grips with the fact that, hey, we are where we are today. There's nothing that we can do about it. If we can focus on the future and start making decisions that are positive and maybe make some changes that'll be helpful, then that's great.   Nick: From our perspective as advisors, one of our kind of golden rules, and we oftentimes tell clients this is that, we can't care more about your money and your situation than you do. So ultimately it has to start at home and then they have to be willing to take guidance and advice and make changes. And then really what we found is that in 12 to 24 months, the momentum can be significant in a positive way. And things can really swing strongly. And once that happens, it becomes kind of addicting. It's kind of like when you're in your early twenties, for most people maybe they're just starting out at the first job and the first time you started to hit a few thousand dollars in your account that stays in your account, maybe 5,000 is your threshold and you're like, "wow, this is great." I've never had this amount of money in here before.   Nick: And then maybe down the road you hit 10 and as you get older that number changes. And what's interesting is that it also becomes more stressful and you kind of get this hoarding mentality where once you hit these certain thresholds, 50,000, a 100 thousand in your savings account. Once get there and you realize the comfort and the peace of mind that it provides, you never want to go back. And so we like people to kind of get that, to taste that so that they can understand that. And then usually it's full speed ahead.   Mark: Yeah, no, that's a great way of looking at it. My daughter, she's still pretty young but is definitely, she kind of got that. She was constantly just spending her check and spending all her money when she wasn't making too much. And then once she got started getting a decent check in from the Navy and she got a couple of bonuses and she put it in there and she watched her account grow, she was like, "wow, this is-" and so now she's gotten bitten by this bug to kind of see what she can get the number to. She'll message me every so often, "The number is this now. And the number's that now." And so I'm like, "Hey, cool. You're 24 years old. You got a long time for that to grow and compound." So yeah, it definitely can be addicting.   Mark: And of course, if you're closer to retirement and obviously that sounds like that's the case for this question. I think that's a great piece of advice. Find out what you got, get an assessment, get a plan put together, look at it. And then see, you guys might be fighting over nothing too, so think about that. You guys could possibly be in much better shape than you even realize. And therefore you're fighting for [not. 00:18:55]   Mark: So reach out and have a conversation with the guys. Just give him a jingle and call them at (813) 286-7776, or stop by the website, pfgprivatewealth.com. And that's going to do it this week for the podcast. Again, don't forget to subscribe to us on Apple, Google, Spotify, iHeart, Stitcher, or whatever platform you like to use. You can find it all at the website, pfgprivatewealth.com. For John and Nick, I'm Mark, we'll see you next time here on Retirement Planning - Redefined.   Nick: Go Bills.

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Manufactured in an ISO9001 certified facility Boost Your NAD+ Levels — Healthy Ageing: Redefined Cellular Health Energy & Focus Bone Density Skin Elasticity DNA Repair Cardiovascular Health Brain Health  Metabolic Health   My  ‘Fierce' Sports Jewellery Collection For my gorgeous and inspiring sports jewellery collection, 'Fierce', go to https://shop.lisatamati.com/collections/lisa-tamati-bespoke-jewellery-collection.   Here are three reasons why you should listen to the full episode:  Find out Mark's experience with meditation and how this made him into an ultimate warrior. Discover how a positive internal dialogue can train your brain to be focused. Know about recapitulation and how it can help in dealing with traumas.   Episode Highlights [05:34] Mark's Background Mark's experiences with his father forged his mental toughness and resilience. This laid the foundation for him to be an ultimate warrior. He grew up boating, hiking, and running trails through the mountains. Athletics was his escape, but he wasn't able to think about his future.  When Mark left college, he was fortunate enough to get a job in a big accounting firm; this allowed him to go to a top business school.  Despite school and work, Mark was determined to continue his athletic career. He then became interested in Seido karate. Meditation made him realise that he wasn't following his true path.  [15:13] Becoming an Ultimate Warrior Mark came across a Navy recruitment centre, saw their poster, and applied to be a SEAL. Mark graduated with his entire boat crew. He was number 1 in his class.   Mark credits this achievement to meditation training and the team building activities that compelled you to tame your ego. [19:59] The Importance of Meditation and Yoga Mark meditated and trained in yoga every day in the war zone. He felt stronger and more confident.  Yoga is the oldest science of mental and personal development.  Mark learned that training one's physical, mental, emotional, intuitional, and spiritual aspects mean you can access more of yourself and your potential. Yoga, in a sense, is integration; it is coming back to who we are and being whole.  Listen to the full episode to learn how Mark got into yoga and how this contributed to him becoming an ultimate warrior. [26:33] The Importance of Emotional Strength In SEAL training, most of those who quit were physically strong but lacked the emotional strength to handle extreme moments of crisis and doubt. The person subconsciously created the injury to quit.  Mark tried to be flexible and didn't let anything bother him during SEAL training.  Mark trains SEALs by teaching the Big Four: box breathing, positive internal dialogue, visualisation, and micro-goals.  [35:19] Examining Your Internal Dialogue Meditation is a critical part of examining one's internal dialogue.  How you talk to yourself has an incredible impact on your energy and motivation.  The term 'feeding the fear wolf' means to allow negative dialogue, imagery, and emotions to control and weaken you.  Positive thoughts, or ‘feeding the courage wolf', creates a higher vibration, bringing in more energy and access to creativity.  Controlling your breathing and adding a positive mantra can be very transformative; it helps you develop concentration and increase productivity.  [41:33] Imagining Victory Our belief systems are made out of statements that may or may not be true.  Pay attention to your thoughts and make them positive. Know that you are competent.  Although you may not feel it yet, continue meditating to get rid of that negative side.   When you understand your capabilities, you can project them into the future and have an image of your success.  When positive thoughts overcome negative ones, you can see your true self more clearly, and powerful thoughts start to spread.  [46:10] The Zen Process Meditation is challenging, especially for active people. We have to disconnect from various distractions and be still.  You can't evolve if you are constantly active; the only way to go inward is to slow down and be quiet.  The first step in meditation practice is box breathing. It releases stress and brings brain-body balance.  In the second step, the box pattern turns into concentration practice. The mantra is also added to train concentration and attention.  The third step allows you to put less energy into concentration and observe yourself from a witness perspective.  [53:00] The Importance of Doing Emotional Work Doing emotional work is the foundation of meditation.  Without this, you don't get the full benefits of meditation. Meditation requires patience.  The process is different for everyone.  [55:44] Going into the Witness Perspective In this part of the process, you empty your mind and allow any thought streams to come in. You experience a metacognitive split here.  You see the thoughts that come up from a perspective that's separate from them.  Through this, you realise you're not your thoughts and emotions. And so, you have the power to change your story. When you visualise from the witness perspective, you see what your spirit wants you to see. You realise your true purpose.  If you do this every day, you attract the future that's right for you, and you feel connected to the world. Through this, you eventually gain enlightenment. [01:02:43] How Meditation Can Help Athletes Meditation supports total health. Through it, you'll become more healthy, strong, and motivated. Awakened athletes and warriors who serve the world can change it. Athletes can do so because they are emotionally balanced. [01:05:25] What Is Recapitulation? Recapitulation is where we use imagery to go back into our past, relive traumatic events, recontextualise them, and forgive.  It is to see yourself forgiving your younger self and changing the image and energy associated with your traumas.  Awareness and identification of traumatic events is the first step to the recapitulation.  Recapitulation can be used to go back and overcome big traumas and to make sure you are not dragging past regrets.  Recapitulation then becomes a daily practice of letting go of regrets and resentments. Listen to the full episode and hear some examples of this!  [01:18:28] How to Be a Good Leader Show up as the best version of yourself. Be humble, authentic, trustworthy, courageous, and respectful.  It takes time to develop those qualities and work on them with your team.  Listen to the full episode to know how Mark does leadership training in his programs!   Resources Gain exclusive access and bonuses to Pushing the Limits Podcast by becoming a patron!  Harness the power of NAD and NMN for anti-aging and longevity with NMN Bio.  Listen to other Pushing the Limits episodes: #183: Sirtuins and NAD Supplements for Longevity with Dr Elena Seranova #189: Understanding Autophagy and Increasing Your Longevity with Dr Elena Seranova #199: Episode with Dr Don Wood Connect with Mark: Website | Instagram  The Unbeatable Mind Podcast with Mark Divine Bedros Keulian on Learning How to “Man Up” How to Deal with Trauma with Dr Don Wood Check out these books by Mark Divine!  Staring Down the Wolf  Unbeatable Mind  8 Weeks to SEALFIT The Way of the SEAL  KOKORO Yoga Autobiography of a Yogi by Paramahansa Yogananda 2021 Unbeatable Challenge   7 Powerful Quotes from This Episode ‘It was about physical, it was about mental, it was about emotional, it was about intuitional and spiritual aspects of our being. In that, I learned that if you train those together, then you will integrate, you'll become whole again.' ‘Human beings have not learned to be whole, and they don't recognise that we're all interconnected. And every one of our thoughts, every one of our emotions, every one of our actions has an implication or impact on the whole.' ‘How you talk to yourself has an incredible impact on your energy and your motivation. Literally, we use the terminology “feeding the courage wolf” versus “feeding the fear wolf.' ‘Understanding your capability as a human being, the potential that you have, the power that we have, you can then project that into the future and say, “What does victory look like for me?”' ‘I think that there's two reasons we're on this planet. One is to evolve to become the best version, highest and best version of yourself in this lifetime. The second is to align with our calling or our purpose.' ‘Ultimately, we create our own reality. It's all basically, it's all experienced with [the] mind. So that's powerful.' ‘You can do anything, one at a time.'   About Mark Mark Divine grew up in Upstate New York. He has a degree in economics from Colgate University and an MBA from NYU. He is a New York Times best-selling author, leadership expert, entrepreneur, motivational speaker.  Mark is also a retired U.S. Navy SEAL Commander. He spent nine years on active duty and 11 as a Reserve. With 20 years in service, he served in over 45 countries. During his time in the military, Mark created a nationwide mentoring program for SEAL trainees. Because of his success, he decided to start SEALFIT. This fitness company aims to prepare civilians for the physical and emotional demands of a SEAL-like lifestyle.  Mark knows the value of emotional strength in transforming lives. With this in mind, he published Unbeatable Mind in 2011, which includes an at-home study program. Mark also has several other entrepreneurial endeavours and books in his name. He's also the host of the Unbeatable Mind podcast. With all these ventures, Mark's ultimate aim is to create more resources to improve the lives of everyone he meets.  If you want to know more about Mark and his work, check out his website and Instagram.     Enjoyed This Podcast? If you did, be sure to subscribe and share it with your friends! Post a review and share it! If you enjoyed tuning in, then leave us a review. You can also share this with your family and friends so they can be motivated to be their real selves through meditation. Have any questions? You can contact me through email (support@lisatamati.com) or find me on Facebook, Twitter, Instagram and YouTube. For more episode updates, visit my website. You may also tune in on Apple Podcasts. To pushing the limits, Lisa   Full Transcript Of The Podcast Welcome to Pushing the Limits, the show that helps you reach your full potential. With your host Lisa Tamati, brought to you by lisatamati.com. Lisa Tamati: Well, hey everyone, Lisa Tamati here. Fantastic to have you back at Pushing the Limits this week. Now I have a wonderful man who I've followed for a number of years. He's one of my heroes, I was a little bit of a fangirl in this interview I have to admit. But it was pretty crazy. I have Commander Mark Divine on the show. Mark is an ex-Navy SEAL. He was a Commander in the Navy Seal. He was there for 20 years, and he was a fantastic leader. He was deployed in over 45 countries around the world. He also trains, trains a lot of the SEALs who are going into BUD/S training. He was number one on his course when he went through BUD/S, and that's saying something. That's nine months of hell on earth, so if you get through that, you've got to be pretty cool, and to be number one in the end of the whole 190 that went on, that's pretty amazing.  He's the author of a number of books: Staring Down the Wolf, Unbeatable Mind, and SEALFIT, and runs a number of multi-million dollar companies. As a leadership consultant, he trains, not only does he train the military, he helps people prepare for SEAL training. He also now runs through his innovative SEALFIT and Unbeatable Mind training systems. Kokoro crucible is one of his programs. He shares the same secrets with entrepreneurs, executives, and teams through his book and through his book, and through his speaking, and through his award-winning podcast. He has his own, and I have the privilege of being on that one shortly. He runs world-renowned leadership and team events. Wonderful man to talk to, someone that I really, really look up to and respect. His discipline that he brings to everything that he does is quite amazing. So I hope you enjoy the show. Before we go, I just want to remind you to check out our epigenetics program, if you haven't already. Head over to lisatamati.com and hit the work with us button, and find out about our Peak Epigenetics program. This is all about understanding your genetics, and how to optimise them for your best performance. So everything from food, to exercise, what types of exercise to do, what times of the day you should be training, what times of the day you should be eating, and how often. What type of diet is right for you, right down to the nitty gritty. You know, eat almonds, don't eat cashew nuts, right specific to your genetics, so to speak. It also looks at your whole mood and behavior, what makes you tick, why do you think the way you do, what areas you may have problems with, your predispositions.  That's not to be all deterministic, and negative, that's all to be like this is what you're dealing with, and this is how we can hit things off at the pass. This is a really life-changing program, and we're really proud to bring it to you. We've been doing it for a number of years now. We've taken hundreds of people through this program, and we work with corporate teams. So if you're out there and you have a corporate team that might be interested in doing either this or our boost camp program, which is all about upgrading and learning all about how to manage stress, how to reduce the effects of stress, and be more resilient and bring a higher performance to your game, then please reach out to us. Go over to lisatamati.com. and check out all the programs that we have here.  Just a reminder too, I have a new book out called Relentless: How a Mother and Daughter Defied the Odds. If you've listened to this podcast for a while, you would hear me harp on about my amazing mum and the journey that we've been on back from a massive aneurysm that left her at the age of 74 with hardly any higher function, and a prognosis that said she would never ever do anything again. And they were very, very wrong. So I want to share this book, I want to share the story, because it's a very empowering story. So if you haven't read the book Relentless, I really encourage you to go and do that. I'm really keen to get this out there because this will empower and change lives, and already has, so make sure you read Relentless. Right, over to the show with Commander Mark Divine. Hi everyone, Lisa Tamati here. I'm super, super excited. I'm jumping out of my skin, I can't sit still. I have one of my great heroes that I've followed for such a long time, so I'm a little bit, being a bit of a fangirl right now. But I'm sure I'll calm down in a minute or two. Commander Mark Divine is with us. He has such a huge history. You are known, really, as the warrior man, Unbeatable Mind, SEALFIT. You've done a heck of a lot in your life. Mark, it's just, I can't wait to share some of your insights, because what you do and what you've done is just absolutely amazing. So, welcome to Pushing the Limits. Can you give us a little bit of background, Mark, on where you come from and what you've done and how you've, just to give us a little bit of, because you, obviously you've been in the SEALs, you're a commander in the SEALs, you're a trained SEAL. So let's start there. Let you come to it. Mark Divine: Oh, my God, where to start? Lisa: Maybe childhood. Mark: I was born at a very young age in a very small town in upstate New York, a province of the United States. I'll try to keep this short because sometimes I have a few run-on sentences. Go like 40 minutes, right? We don't want that to happen. That's when we have a good time. So yeah, I was a pretty normal kid growing up, running around the woods of upstate New York, crazy family, lots of alcohol and anger. The belt would come out pretty much every other night. My brother and I would literally just provoke my father just to do it, because we stopped taking him seriously after a while. In that regard, I feel pretty fortunate that my young spirit was like, ‘You can't break me'. I realise now that we all choose our parents, let's just say, from a spiritual perspective, I certainly believe that. For certain experiences, and for a while I played the victim, woe is me.  But now I look back and thank God, that really forged my mental toughness and resiliency. I had to unpack some crap from that, obviously, but it made me a Navy SEAL warrior, right? When I went through Navy SEAL training, you could not hurt me, because nothing was compared to my dad. Anyway, so that's a little aside. Upstate New York had a really— it's beautiful. I've been to your country in New Zealand. It's just absolutely gorgeous. I feel the same way about America in certain places, the much bigger. New York is one of those areas that, 6 million acres of unfettered, protected land in northern New York called the Adirondack Mountains, and that was my playground. And our summer home was on the west shore of a lake called Lake Placid where the Olympics were, you're probably familiar with that.  Lisa: Yeah.  Mark: There was no road access to my house. There was no TV, no internet. Still, there's finally internet after but no TV, and we would have to take a boat to get there. And so I grew up with boats and I grew up hiking in the Adirondacks and a lot of time alone in the wilderness, which is one of the reasons I became kind of an endurance athlete. I know you're an endurance lady. Because I was comfortable, being alone. I was comfortable running the trails in the mountains, and I used to have a friend, we would run up Whiteface Mountain, which is at the base or the foot of Lake Placid. Not a huge mountain, it's 4,000 feet, but you know it took a couple hours. If you're going to hike up there it takes a few hours. For us to run up there, took us 45 minutes. People used to think we were crazy. When we got to the top we would wrap our ankles and our knees and we would play tag on the way down. The trails are steep and just rocks and ruts and roots. It's amazing we didn't kill ourselves.  So that was my like early childhood upbringing, nature being in the woods and in the water were my solace away from the family dynamics. That led me to be a competitive athlete in high school, 12 varsity letters and then into college, I was recruited for swimming and I became a competitive rower. And then I started triathlon. So, I was an athlete, but the athletics really was my escape and kind of my grounding rod, like it is for so many athletes, right? When I— then I wasn't sure what was going to happen. I didn't really spend a lot of time in my youth thinking about my future, I kind of accepted a lot of the stories for my family that I was going to go back and be part of the family business. That business was really the place that Divines go, you know, we don't go into the military, we don't go into academia, we don't do those things. So anyways, it's as your listeners are hearing this, they're probably like, ‘Yep, check.' Lisa: They may have done that. Mark: That's the norm, right? That's not, I wasn't off, but it's certainly not what I teach today, right? Because, right, I think if we're— if we don't follow our passion and find our calling in life, then we're going to have discomfort later on, and discomfort is going to lead to existential crisis. So I was very fortunate, incredibly fortunate that when I left college, I got a job with a big accounting firm, consulting accounting firm called Coopers and Lybrand, which became accountant, became— Lisa: You were an accountant. I mean, that makes me laugh, really. Mark: I was an accountant. Lisa: I was on the way to being an accountant too. So because of what my dad wanted, and I'm about as far from an accountant, as you can get, you know.  Mark: I was too. Lisa: That's a good story. Mark: But I stuck with it long enough to become a certified public accountant, I had to pass the exam.  Lisa: I didn't. Mark: I got my— I tell you what, I would rather go back to BUD/S Navy SEAL training than try that darn exam again. That told me something right there. But you know, it is a great opportunity. Because here I am, you know, I got a degree from a pretty good university called Colgate. But I didn't really have any skills. And so this job opportunity gave me and sent me to a top business school in the United States called NYU, New York University. So I got my MBA in finance, and I became a certified public accountant for four years. I got to work on a lot of different companies as a consultant and auditor. So I saw a lot. But, so that was kind of formative, in a sense, like, I learned a lot. What was probably more formative, or more substantial for me was, once I got into that suit and tie, and I was working eight hours a day, mind you, they allowed me to work only 8 or 10 hours a day. Most people in those scenarios work 15 to 20. But because they were sponsoring this small group of us to go to business school at night, they had to let us off, and then we would go to school full-time during the summer, and just come in on Fridays. It was a really cool program. So I was working 8 to 10 hours a day, going to school at night. And it's— I was an athlete, right? And I was like, ‘How am I going to, how am I going to stay as an athlete?' Right? Most people don't. Because you know, in the corporate world, and I was like, ‘I've got to, I've got to continue my athletic career.' And so I would get up really early in the morning and go for a six mile run. And then at lunchtime when all my peers would go have a beer or martini and lunch, I would go to the gym and do like this, what I now know is a high intensity functional workout, which back then nobody talked about. Because I had to go fast, and I was wanting to do a lot of different variety, and I had to be in and out of there in 45 minutes. And then after, they let me go at five o'clock in the afternoon, and my first class wasn't till 7:30. So I'm looking at that saying, ‘Look, I got two and a half hours. I could do some training here.' So one night, I wasn't sure what I was going to do. But one night, I was walking down 23rd Street, I was living on 22nd in Manhattan, and I heard these screams coming out of this building. And I stopped and I looked up and I was standing under the flag of the World Seido Karate Headquarters.  ‘Oh, interesting. Maybe it's a martial art.' And I had been intrigued with the martial arts. But in Upstate New York, that just wasn't much. There's nothing as a matter of fact, in my time, and so I didn't really get a chance to study anything. So I went in there and I was floored. I was stunned by what I saw. It was an incredible art. This was the headquarters of a worldwide art called seido, they had three or 400,000 students. And the Grand Master, the founder was on the center of the floor, this Japanese man, 10th degree black belt, looked like a frickin' tank. And he was, his name was Nakamura, and he became my mentor, my first real mentor. Yeah. Now what's interesting, he says it wasn't really the karate that changed me. It was the zen training. And he is one of the few masters who kept the old ways of training the mind and the body and the spirit, and understood that they all had to be in balance, and they all were part of the package of developing these corrupted, these trainees.  I loved the zen part, and there was a zen class we had every Thursday night for an hour, we would sit on that little wooden zazen bench. And honestly, this studio is the headquarter, had well over a thousand students. There were ten of us in this class, most of them black belts, and I was a white belt, and I was like, ‘Where is everyone else?' I didn't get it. And then there wasn't a lot of understanding or talk about meditation back then. But boy, I did this thing to do meditation. I had all the usual kind of resistance to it, and my monkey mind going all over the place and wondering if it really worked. I trusted Nakamura and the way he acted and presented himself as a character, just who he was, was so different than any other human I've ever seen or experienced. And I was like, ‘There's got to be something to this, right?' So I stuck with it. And it literally changed almost every aspect of who I was and how I saw the world and what I perceived to be my calling and my purpose in life. And it was sitting on that bench that I realised that I was going down the wrong path with this MBA, CPA, working in the corporate world. Even if I went back to the family business, it just wasn't what I was meant to do. That was the first time in my life that I allowed myself to examine my core story that said, this is who I am, and to recognise it was built on a lie. Lisa: Yeah. And you weren't following your true path. Mark: I wasn't following my true path. But my true path wasn't exactly laid out for me, in those meditation sessions. It was more like the archetypal energy in the arc of my life was shown to me and that that art was to be a warrior, and then it would lead somewhere else that wasn't quite clear to me, but the warrior part was very strong. And it didn't— I didn't get messages while I was meditating, saying, ‘You're going to be a Navy SEAL.' What I got was ‘warrior' and, ‘You're going down the wrong path with this business stuff.' It was when I finally started to accept that, that I learned about the Navy SEALs, right. Remember, this is 1987, 88, there was no TV shows and movies, no famous names.  Lisa: They weren't famous back then.  Mark: Nobody knew them. In fact, the few people that did know them were like, crazy guys. So I— one day, I was walking home from work, and I came across a Navy recruiting station. I didn't even know it was that but I saw a poster in the window. I took a double take of this poster. I was like, well, the title of that poster was, ‘Be Someone Special'. And it had Navy SEALs doing really cool shit. Jumping out of airplanes, yeah, blocking out little mini submarines, sneaking through the water. It's just so cool for me. I just sat there kind of transfixed, looking at that, and I didn't say anything about the SEALs. They said, US Navy, and I was, ‘Huh, interesting.' So I went back and I talked to the recruiters so what, ‘Who are those people in that poster?' They said, ‘Oh, they're crazy Navy SEALs. You don't want to do that.' I said, ‘Yeah, I do. Tell me more.' So long story short. I started that whole CPA, MBA bullshit, 1985. In November of 1989, I got my black belt, I got my MBA, I got my CPA and I was on a bus. I was on a bus to Officer Candidate School. Lisa: That was the next mission. Mark: On to the next mission. I wandered away from, I walked away from probably what would today's dollars be $200,000 salary to get paid $500 a month?  Lisa: Wow. That takes— Mark: For heading off as a candidate. Lisa: That takes courage. That alone takes courage. Mark: But I didn't question that. You know, I knew it. I knew this is the right path. And when I got to SEAL training, what we called BUD/S, basic underwater demolition SEAL training. Man, I felt like I was home, and there was no way that they were going to get me to quit. I mean, other people said this, but I said this very clearly: ‘You have to kill me to get me out of here.' And I don't think they can legally do that. Although they sure do try. Lisa: It can get pretty close. Mark: It can get pretty close, yeah. I sailed through SEAL training. We had 185 in my class, hardcore, awesome guys. And 19 of us graduated. I graduated number one in my class and my entire team, my boat crew that we trained together from day one, graduated with me.  Lisa: Wow.  Mark: So there's something about that meditation training, Nakamura and the skills, and the values on team building and taking my eyes off myself and putting them on others, the taming of the ego, it really allowed me to help lead my team to success, right? We made it about the team and not about me, and everyone else was about them. And they— the team's, the instructors are, their job is to select the next crop of teammates that they will go to war with.  Lisa: Yeah.  Mark: So what they're looking for is not who's the toughest guy, not who's the best athlete—  Lisa: Not the coolest, yeah.  Mark: Yeah, exactly, not the best looking whatever. It's, ‘Are you a great teammate? Are you gonna have my back?' So that's something that I guess I demonstrated.  Lisa: Wow, that's a brilliant intro into your background. What fascinates me with you too is that you like— you know, because the SEALs are known for being hard asses. I mean, you know they are hard people, they have been through tough stuff, they go through tough stuff every single day that you're out there. But you've got this meditation side, you do a heck of a lot of yoga. You do, you talk about authenticity, and I know you don't like the word vulnerability, but you're quite, you're open about the stuff. That's quite the opposite of most, in the training that you get. I suppose this comes from Nakamura being your master, that he taught you that very early on, they're sort of the both sides of the coin.  I get that question quite a lot, too. When they— when people read what I've done and achieved and so on, they're like, ‘Wow, you must be a super hard ass.' And then they meet you and realise that you're actually very vulnerable or cry a lot. I'm very full of mistakes and problems and stuff that I'm working on at all times. But the difference is, I think, that you embrace both sides. And that you are always in pursuit of excellence, and you're always improving, and you're always developing. And I found that a really interesting combination in someone who's so physically tough and mentally tough to have had both sides. Was that a hard thing in the beginning with the SEALs? Mark: I think you're right. I did learn that initially from Nakamura and so every day, you know, I was so committed. Every day I would stretch and I would do my breathing practices and my visualisation while I was going through SEAL training. Every day in the SEALs, I do some version of that. It was you know, it's difficult for a military operator to keep a daily dedicated practice going if you're up 24 hours a day, and you're in combat. Honestly, when I went to Iraq and combat, I meditated and trained yoga every single day. And it had a profound effect on me, right? In the war zone, all my teammates are just getting frayed at the edges, and I felt strong and confident, and I knew I was going to survive, because I did, I had that vision. I was going to be home with my child, you know, my wife and son.  So it came first from Nakamura, and then I started into yoga. It's not my career, it's important people know, I did plus-20 years in the Navy SEAL, but about nine years active duty and 11 years reserve. So as reserve, so nine years after I joined, even while I was on active duty, I started to get into yoga. But when I got off active duty I had more time. I went full on in, and that was because— actually it is a blessing in disguise. I was living in San Diego and there was no seido karate out here. Otherwise I would have gotten back into seido karate. So first I got into something called goju karate, I got a black belt there. It was very similar to seido but it lacked the spirit and like the mental, the meditation, so I didn't really stick with that. And then I got into ninjutsu, thinking ninjutsu might be a little bit more spiritual. I really liked the teacher but he was a horrible business guy, so right on the cusp of getting my black belt, he shut his school down and ran out of money.  And then I found yoga kind of about the same time as ninjitsu. But I didn't really understand it until I read Patanjali's yoga sutras and also Paramahansa Yogananda's autobiography yoga. And those just absolutely shattered my paradigm of what was possible and what yoga was, as the oldest science of mental and personal development. So I fully went into yoga and I ended up getting 700 hours of certifications and started my own yoga program and wrote a book about it eventually, but, and started teaching it to SEALs. And so all this I was still a SEAL officer. Because I didn't retire from the SEALs in 2011, but I was able to do all this and build a business that started to teach Navy SEALs everything I would have been learning. And that's called SEALFIT. That was the business that everything I've been learning and applying in my own life, right? And this was this integrated model of development. It started with Nakamura where it wasn't just about the physical. It was about physical, it was about mental, it was about emotional, it was about intuitional and spiritual aspects of our being. In that, I learned that if you train those together, then you will integrate, you'll become whole again. What that means is you'll become more, you have access to more of yourself. You have to put more potential. You can maintain peak performance, you can serve more profoundly, you can do more, you've got way more energy, way more enthusiasm, way more motivation, way more peace of mind, way more clarity.  It's extraordinary. In a sense, it's like coming back to who we are. That's why I call it integration. In fact, the word ‘yoga' means union or integration, and so does is zen, believe it or not. Those practices and traditions are really all about becoming whole as a human again, as opposed to fragments and separate, separate from yourself and separated from others. So I stumbled upon this, and created my own path or my own model. And then when I had started to teach it to SEALs and special operators, and other military operators, a ton of people, even from New Zealand, some of your listeners might have been to my training. Then I started to recognise that, ‘Wow, this is necessary in our culture.' Because most Westerners have no connection to this, this way of living of, taking care of the internal while you are working in the external, the yin and the yang, the balance between being and doing, becoming whole again, so you can do your work from a whole perspective as opposed to a fragmented, separated self. Which leads to suboptimal results, at a minimum, in at least a flat out crisis or destruction at the maximum level. And that's, we're seeing that both in from the investment in violence, military build-up, conflict, as well as environmental degradation is because human beings have not learned to be whole, and they don't recognise that we're all interconnected. And every one of our thoughts, every one of our emotions, every one of our actions has an implication or impact on the whole. Lisa: Yep. This is really good. Because I think, we live our lives very much in the doing. We're busy all day, we're busy with a billion million things, we're running businesses, we're— we've got families and so on. And it's really hard to find that stillness. And I know that even as an athlete who, I think for years, I was just headed through the wall, you know, taking— Mark: Most people are, that's how they learn, until they hit the wall, right?  Lisa: Yeah, no, I hit the wall a couple of dozen times before, because I was a bit thick. I didn't wake up, said, ‘Hang on, this stuff isn't working anymore.' And it works when you're 20. And it works when you're 25. And it works when you're 30. And but when you start hitting your 40s, and you're still smashing the crap out of your body, and you're not really not refilling the tank, and you're not re-examining what the hell are you doing, I think that's when the wheel started, when the wheel started to fall off for me. And I'm like, ‘Hang on a minute, this— why isn't my body doing like, it wasn't what it was supposed to do?' And when you've grown up, though, with that expectation of, you have to be tough, you have to be hard. And I grew up different to you. But I had a dad who was very, he was an awesome father, but he was a hard ass. And he expected you to be tough and mentally tough, physically tough. He didn't really tolerate a lot of weakness or sickness or anything like that. And he was an amazing dad, but he pushed really hard. And that sort of makes you think, well, you have to be hard all the time. And then when you break down, then it's you being weak. Instead of looking at the whole picture, and quieting the mind and doing these things like meditation was for me. Yeah, I know, I hear it's really important, but I can't sit still. I need it twice as much. Mark: Yeah, well, there's a reason for that. It'd be fun to talk about. But think about, when I reflect back, and my SEAL training and all these other guys were trying to be hard, and they had the same thinking, because America has a real soft side to it. But there's a lot of freakin' warriors in America. And we have that same kind of what your dad's talking about. Gotta be hard. Like, there's no room for weakness. It's got to be tough. You think about the metaphor, the guys who quit were just bad asses. Yeah, why did they quit? They quit because they didn't— they lacked the emotional strength to understand what was happening to them in their either most extreme moments of crisis or moments of just doubt, right? And then they're like, so they let uncertainty in, let doubt creep in and corrupt their decision making and then, one mistake leads to an injury we call, quinjury. And you've probably seen this in endurance athletes' is when all of a sudden the injury kind of crops up and then the person's out. And then really, reality is they created that injury to quit.  Lisa: Yeah, because they wanted a way out.  Mark: Because they wanted a way out. It's very subconscious. It's not prepared. It's not preparing properly. It's not recovering properly. It's not understanding that this is a long game and getting your ego out of the way. Lisa: It used to prop up for me every— before any big race, that in the week ahead of that race, I would get sick. And I would, I'm sure that that was my subconscious trying to stop me do it. Mark: Yeah, I've given you an out, right. And so— Lisa: You've got a cold, you've got the flu. Mark: Think about the metaphor between, if you got a tsunami coming, like, consider tsunami a metaphor for a crisis, or a big challenge, like BUD/S or a 50 mile or 100 mile race or something like that. There's a tsunami coming. Would you rather be a mighty oak facing that tsunami, or would you rather be like a reed?  Lisa: A reed, definitely. Mark: Yeah, if so, when I went to SEAL training, I tried to be the reed, right? I tried to be really flexible. I didn't let anything bother me. You know, structures would come up and, during Hell Week for us, which week seven back then. But now it's more like week three or four, seven days non-stop training around the clock, no sleep. Everyone's heard about that. Like a day, Thursday, like the day before, we're over it most of it, we're down to 60, 35, maybe 45 or 50, actually, in our class from 185 already. And instructor evil comes over and he's like, ‘Mark, I don't like you, I'm gonna make you quit.' And in my mind, I was like, ‘Good luck.' And I even think I started— Lisa: That confidence! Mark: I don't know, it was just my spiritual strength saying, ‘No, you're not going to get me to quit, you can't.' And so I actually was challenging him in my mind, and it must come through on my face. And he goes, ‘I'm gonna wipe that smirk right out that effing face.' And he just made me start doing 8-count bodybuilders, which are like a burpee, basically. And I remember in my mind thinking, ‘Okay, all right. Let's do this.' Right? All I got to do is one 8-count bodybuilder at a time, until he gets tired. Lisa: Until he gets tired. Mark: Exactly! So that's what I did. I just did one. I just want, did one 8-count bodybuilder. And then I just did one 8-count bodybuilder. And then I just did one 8-count bodybuilder. And when we got up to like— Lisa: You broke him. Mark: 800.  Lisa: Holy heck.  Mark: Which is nothing, right? I did 24 hours of burpees last, a couple of years ago, as part of our challenge. We did, check this out: we did 22 million burpees as a tribe to raise money for veterans. And part of that was to break a world record where our six-person team, you would love this, three men and three women, we did 36,000 burpees in 24 hours, so I did 7,500 or something like that. So 700 is nothing. Back then I didn't know if it was going to be 700 or 7,000 or 70,000. But he got bored, and he walked away at about 700, and I have to say, that worked. That's a good strategy.  Lisa: What about the burning in the muscles and the exhaustion and the running out of glycogen—  Mark: You can do anything, one at a time.  Lisa: Wow.  Mark: It's just like in a race, I'm sure you get to a point where all you have to do all you are saying to yourself is, ‘Just one more step.'  Lisa: One more step. Yep, absolutely.  Mark: Same thing. We call them micro goals. And so we teach— I started teaching these to SEALs, and the best guys already did this. But now we teach it, the SEALs are teaching what I call the Big Four. And they're teaching box breathing for controlling their stress, they're teaching positive internal dialogue, and mantras. And they're teaching visualisation, visualise every event and visualise what the end state looks like for you and then visualise the mission and whatnot. And then micro goals. Like go to BUD/S thinking about eight months of training, you go to BUD/S thinking about, ‘What do I got to do today to win this?' And then when today gets hard, you just collapse. ‘What do I need to do to win this evolution or event that I'm in?' And then when that gets harder, you know, it's like, ‘What do I got to do to get to the next five minutes?' Anytime you quit, or you have the thought, ‘Well, this sucks. I think I want to quit.' You just say, ‘Well, let me just push through to another— let me just push through another five minutes.' Or, ‘Let me just get to that berm up there,' if it's a run, or Log-Pt could go on forever. ‘Let me just finish this evolution, then I'll make a decision.' And so you just keep kicking the can down the road of the pain and the quit decision and the suffering and eventually the suffering goes away, because that's a temporary state. Lisa: And this is like that you just dropped so much golden inside of two minutes. Take a couple of those because these are things that I've took me 20 years to learn. Mark: Play it back in slow motion. Lisa: You know, like this. That's how that's how I break down. You know, every mess of the like, I remember and my listeners have heard me tell the story. But I ran 2,250 kilometers from New Zealand for charity.  Mark: Wow. Good for you. Holy cow.  Lisa: Yeah, no, it's like, but I've been so busy in the build-up doing— I've been at other races around the world, done Badwater in the States, just come back from that, just launched a book and then I'm standing at the start line. I've been so busy in the thing that I actually hadn't thought about actually running the— because I was just like, ‘Yeah, I got everything, sweet.' And then I'm starting at the start line and I just had a panic attack, like the first real big panic attack. And I'm not, because you're staring down the barrel of this—  Mark: Like, holy shit, this is too high to climb. What the heck have I done? Lisa: What the frick was I thinking? And I went home, we had media, we had all my crew and everybody there and I just went away behind the one of the cars and got my mum, my mummy ‘cuz she's my safe place, went to my mummy and I just bawled my eyes out. And said, ‘Mum I can't do this, I don't know what the frick I was thinking. I can't, and there's no way out.' And mum's just like, ‘Hey,' as she hugged me, as mums do. And she said, ‘You don't need to do 2,250 today. All I want you to focus on is that little box up there,' you know, that was a couple of hundred meters up the road. ‘That's what you got to do right now. And then you're going to, you're going to get through to lunchtime, and then you're gonna have lunch. And then we're going to get through to this and that.'  She just broke it down into pieces, and she took all of that load that I was just like, ‘Oh my God, this is huge,' and she broke it into one step at a time, basically. And that was some of the greatest learnings that I've taken away for every event that I've done when— and there have been times when I've broken and I've just crashed on the ground. I don't know how to get up and people have come along and they've got me up and walked me through the next few steps. Or the next— and that has gotten you over that hump, you know? And I just wait, you know, that's so much gold, right there, what you've just said. I think if we can do that in daily life so when we're faced with some big scary thing coming at us, how do I just get through this moment? And we're very— if you can get through these impulses, you know, like there's 30 seconds, through the 30 seconds almost, sometimes you can get to a place where you can cope again. And then you can sort of get back up. Mark: And this goes back to like the internal dialogue. Most people don't examine their internal dialogue. And this is where meditation is so critical. And you can also consider, like running or swimming or biking, endurance sports generally, are also very good for examining internal dialogue, because you're going to meet resistance. How you talk to yourself has an incredible impact on your energy and your motivation. Literally, we use the terminology ‘feeding the courage wolf' versus ‘feeding the fear wolf'. Feeding fear is allowing negative dialogue and negative imagery and negative emotions to kind of run the rule the roost of your psychology, and that weakens you. Negative thoughts demonstrably weaken you as a human being.  Lisa: Yeah, because—  Mark: They're gonna not just weaken your motivation but literally musculature-wise you get weaker, and that's been proven through kinesiology. So positive thoughts create a higher vibration, which bring more energy, more access to more creativity and motivation. And so you got to train positive thoughts. That's what I mean by feeding the courage wolf. And the more you feed the courage wolf by training positive mantras and positive thoughts, then the more you starve the fear wolf until he goes away, until he just doesn't have the food anymore. And those patterns dry up and blow away. So I created a bunch of positive mantras that I would say in the SEAL training, and they're still with me today.  As soon as I start a hard workout, they kick back in. ‘Feeling good, I'm looking good, ought to be in Hollywood. Feeling good, I'm looking good, ought to be in Hollywood. I can get out of me in Hollywood. I've got this easy day, piece of cake. Boo yeah, hey, got this. Easy day, piece of cake. Boo yeah, hey.' And then I'll synchronise that with my breathing. So, hardcore, run three steps and inhale 1, 2, 3, ‘I've got this. Easy day. Piece of cake.' Exhale 1, 2, 3. Right.  Lisa: And the rhythm is good too, hey. Mark: Yeah, exactly. So I was synchronising those before, the big four. The first skill I said, box breathing, it's really breath control. Running, anything you're doing, always breathing through your nose as best as possible, and controlling the breathing and creating a nice rhythmic pattern with the breathing. It's going to be different depending upon what you're doing. If you're lifting weights, gonna be one thing, if you're running another, swimming another. Swimming creates its own little breathing patterns, because head in the water versus out of the water. But just starting there, controlling your breathing and adding a positive mantra, or a positive internal statement that's linked to the breath is transformative. Not only does it keep you in the game athletically or whatever, but when you do this during your regular day, day in and day out, you're training your mind to be really positive and to be very concentrated. So you're developing concentration power. So you're turning your mind from like a scattered floodlight, which is flickering on and off, the monkey mind, to a very, very concentrated laser beam that you can point that laser beam on anything, any task, any project, and it deeply improves your productivity, the ability to get things done, you know, significantly.  Lisa: Wow.  Just interrupting the program briefly to let you know that we have a new Patron program for the podcast. Now, if you enjoy Pushing the Limits, if you get great value out of it, we would love you to come and join our Patron membership program. We've been doing this now for five and a half years and we need your help to keep it on air. It's been a public service free for everybody, and we want to keep it that way. But to do that we need like-minded souls who are on this mission with us to help us out. So if you're interested in becoming a patron for Pushing the Limits podcast, then check out everything on www.patron.lisatamati.com. That's P-A-T-R-O-N dot lisatamati.com. We have two Patron levels to choose from. You can do it for as little as $7 a month, New Zealand, or $15 a month if you really want to support us. So we are grateful if you do. There are so many membership benefits you're going to get if you join us. Everything from workbooks for all the podcasts, the strength guide for runners, the power to vote on future episodes, webinars that we're going to be holding, all of my documentaries and much, much more. So check out all the details: patron.lisatamati.com. And thanks very much for joining us. Mark: And then the imagery, right, the imagery. Well, let me backup. The other thing that that process of paying attention to the quality of your thoughts and changing them to positive thoughts, and increasing your concentration power, as you start to look at the dialogue too, in your head. What is actually going on? And you recognise that typically what's going on in your head is a series of statements that are also based upon belief systems, but it can be framed as questions. When people say, ‘I don't think I can do this,' what they're really saying is, ‘Am I worthy? Am I competent?'  We can begin to recognise that our belief systems are based upon questions and statements that may or may not be true. And so you want to take a look at the ones that are questionable, especially if they have a negative quality, and say, ‘Is that true?' And you realise, ‘It's not true. I am worthy. I am competent.' Now, I may not feel that yet. But the more I tell myself that and the more I can see that in myself, and the more that I meditate and actually feel into my worthiness and my confidence, and the more I work to eradicate the emotional side or shadow that may have, be tied to related to that — for me, it was because of the childhood abuse, I kind of felt a little unworthiness and whatnot, even though I was capable as a SEAL, it's still kind of plagued me for a while, until I had to stare down that wolf of fear and be like, ‘Yeah, that's all bullshit. That's just a story that I'm holding on to and I was able to release all that energy and feel that worthiness now.' Then that leads to a whole nother set of questions, which are extraordinarily empowering, right. So when I— understanding your capability as a human being, the potential that you have, the power that we have, you can then project that into the future and say, ‘What does victory look like for me?' Right? ‘If I'm going to run this 2,000 meter, or 2,000 kilometer race, and I'm going to raise money for charity, what is that for? What's my ‘why'? And what does victory look like?'  You get a clear sense of what victory looks like. And then you can even do that with the micro parts. So you chunked it down into 100 kilometer segments, let's just say. What does victory look like for that segment for the next five days? What does it look like for today? What does it look like— this is, in a sense, what your mom was doing, but she was doing it from the other way around. What does it look like for the next six hours? What does it look like for the next three hours? You get a clear picture because you're asking the right questions, and you're winning in your mind before you step foot into the battlefield. So asking really powerful questions like, what does victory look like? Who is on my team? Who's got my back? Why am I doing this? How is it related to my purpose in my life? These are the questions that we start asking, because now we've drowned out the negative incessant chatter, which is just holding us back and distracting us. We've created this space, and I use the metaphor still water pond. We've taken our mind and we've created it instead of this choppy, you know, bouncing all over the place, turbulent thought stream, largely negative, we've calmed down. And it's now this still water, and on this still water, you can look at it, you can really see a reflection clearly. So that's kind of a nice thing, you get to see your true self more clearly, but also, what you drop into that water in terms of the thought is going to ripple out and affect everything. So you end up dropping thought seeds that are really powerful, instead of chaotic and negative. Lisa: Because there's this whole, these automatic negative thoughts and if we think about how we evolved that was there for our survival. Because we needed to be aware of dangers and things in our environment, so we were always looking for the bad thing that was going to come at us. But in our world now, where we just, we have this constant chatter in our head. And it's, you know, I've certainly dealt with this for a long time, and I and I fought against the whole sitting still thing, and focusing inwards. Because it's very unpleasant, when you having— when you want to move, you just want to move. Give me a hard ass workout, any day, over meditation, you know, because it's just like this energy, this agitation, but that's why I need to do it. So that I can break through that piece of the puzzle. And then you can tap into strengths that you didn't know you had, and quietness, and then you start to really reflect and like, for me, it has only really been, even in the last few months where I've been— My dad passed away, and it was one hell of a battle for his life. And I, yeah, it was a real— I was fighting against the system. And it was a mess of battle. It's all good when you win, but it's also good when you don't win. And so this one, just been— I was a bit of an existential crisis after that, because I'd lost this battle for my dad, who I loved dearly. And it made me go inward. It made me start to really question some of the biggest things because you start realising that life's short, shorter than I think it's gonna be. You want to understand why, and then going inside and doing some deep work and doing some trauma work and doing all that sort of hard stuff has been great. There's always good that comes out of shit. You never ever want to go through things like that, but when you do, you can always turn them into something, a learning curve of some sort. And having that, I was listening to you with Bedros Keulian, who's also is another one that I— Mark: Yeah, he's an awesome guy. Lisa: Yeah, he's just a rock star. in you, when you were talking about how you went through the zen process where you were, for a start, you started meditating, but you're just learning to quiet the mind. And then after a few months, that became then mindfulness. Where you're starting to observe yourself from outside in splitting the mind or somehow you put this and you're actually observing yourself as this higher self, if you like. Can you explain that a little bit? And how does that— Mark: Yeah, so glad you brought that up. Because I wanted to talk about that. Because you're right. It's— meditation is hard, especially for active people, which everybody, everybody listening, everybody in the Western world is pretty much hyperactive. Yep, that's what we're taught; it's reality. Like, ‘Go, go, go. Do, do, do.' We get over-committed. Now we have, you know, constant distraction with our iPhones and social media, and it's just gonna get worse, worse, worse. Wait until we get plugged in with a neural link, you know, like, wow. So we got to push back against that. The only way to push back against that is to disconnect from all that and to sit still, or stand still, or take a walk. But don't do anything, right. Don't do it for a goal. Don't do it to check it off a box. Don't do it to be the best meditator you know. Lisa: Tick that box.  Mark: It doesn't work, right? Lisa: That was what I was going to— Max: There's no goals here. Right? It's about becoming still, getting that clarity and this still water mind back, if you ever had it, but we had it when we were kids, of course, but in a different sense. So that you can evolve. You know, let me start there. I think that there's two reasons we're on this planet. One is to evolve to become the best version, highest and best version of yourself in this lifetime. The second is to align with our calling or our purpose. And those two really kind of go hand-in-hand or hand-in-glove. You can't evolve if you're constantly doing. You actually will stay stuck. You'll keep getting your ass handed to you. You'll keep suffering. You'll keep feeling victimised. And you'll keep looking outward for the solutions. And you'll keep blaming other people, or society, or taxes, or the government, or God. Lisa: A lot of fingers are turned. Mark: The answers lie within, right? And so the only way to go inward is to slow down and just be quiet. Right? So it's imperative. Now, why do most people fail? A) Because everything I've just talked about, they haven't been taught this. And B) because they're body mind, their body brain is very, very agitated. It's amped up because you've been taking all this stress on throughout your life. So what I teach is that the first step in meditation practice isn't mindfulness. It isn't a mantra practice. It's just a box breathe, which is a pattern breathe, five-count in, five-count hold, and five-count out, five-count hold, or four, or three, if you have trouble with that. And just let that nostril breathing in that massaging that the vagus nerve, stimulate the parasympathetic nervous system. And it's bleeding off stress and bringing your body brain back into my balance.  Lisa: Yep.  Mark: When your body brain is back into balance, your brain is going to experience that as a lower frequency rate. Lower frequency means fewer thoughts, right? If you're in gamma, it's like tick-tick, popcorn brain. But if you're in alpha, like listening to beautiful music, classical music, or you're maybe doing some journaling, your mind stops racing. It starts to get into— Lisa: A lovely alpha state of focus.  Mark: Yeah, and so the box breathing practice trains your mind to get back into alpha, trains your body to de-stress, and you do this. It might take you months, usually about three months. I— my clients have this extraordinary calming that comes over them. And they're already changed. But this is, you know, just the preparatory work, right? This also, for those who are working on their physical structure in their health and their weight, this also has enormous benefits because you begin to feel a lot better. And you begin, you know, you're starting to breathe in that life force again. You're getting more oxygen with every breath, and you're retraining the breathing patterns so this becomes your more natural state. If you, let me just pause here, if you train for 20 minutes a day, have a five-count box breath, that's three breaths per minute, over time, and might take a year or more, you're gonna eventually settle into a natural breath pattern of six breaths per minute, which is now proven to the optimal. Lisa: Exactly.  Mark: I've been doing this for years, I never knew that, it just settled out there to where six breaths per minute through the nose was standard for me, or a standard, and that's what will happen to you.  Lisa: Yep.  Mark: Yeah. But those are full breaths, full exhales, getting all the toxins out there.  Lisa: Basically the exhale. Mark: It's enormously beneficial for your body, and everything starts to come back into balance: you start losing weight, you start eating better. Because you want to eat better, you start sleeping b

Mark Cronin '80 and his son John Cronin join Maura Sweeney '07 to speak about how they came to found John's Crazy Socks. A serial entrepreneur, Mark passed along this passion to John.  In the spirit of Holy Cross, theirs is a company created to do good.  Through John's Crazy Socks they are living their mission to “spread happiness,” while also serving as advocates for workplace equality and voices for people with differing abilities. Interview originally recorded on March 17, 2021. Due to the ongoing effects of the pandemic, all interviews in season 2 are recorded remotely. --- Mark : It's the nature of the social enterprise, you've got to have a mission. You can't be, we just want to make money. It's got to be something larger than yourself, an impact you want to have on the world. And when you're driven by that, it's so motivating. All the petty stuff falls away. And that's how you can go and connect with people. We get asked, what's the key ingredient? What skill? A lot if it is just belief. If we have a mission to spread happiness, just believe. Maura : Welcome to Mission-Driven where we speak with alumni who are leveraging their Holy Cross education to make a meaningful difference in the world around them. I'm your host, Maura Sweeney from the class of 2007, director of Alumni Career Development at Holy Cross. I'm delighted to welcome you to today's show. Maura : In this episode, I speak with Mark Cronin from the class of 1980 and his son, John Cronin. Mark and John are co-founders of John's Crazy Socks. A company whose mission is to spread happiness, where over half of the employees have a differing ability. An entrepreneur at heart, Mark has been creating opportunities and organizations ever since his days at Holy Cross. From creating The Lunchbox Theater as a student, to running political campaigns, to founding a software company, his career path shows what can be done when you pursue an idea. Maura : Every step of the way he's been driven by mission. And every step of the way has prepared him for his role at John's Crazy Socks. Our conversation focuses a lot on the incredible work that Mark and John are doing through John's Crazy Socks, to raise awareness about people with differing abilities. They live the motto, to whom much has been given, much is expected, and they do it well. We are lucky to have people like Mark and John working hard to improve the lives of millions of others, because it's not just the right thing to do, it's also good for business. Maura : Mark and John, it is really wonderful to be here with you today. How are you today? Mark : Pretty good, right? John : Pretty good dad. Mark : Life remains interesting. Maura, thank you very much for having us on. Maura : It is my pleasure. It is my pleasure. I have been really looking forward to talking to you about Mark, about your career journey and John, about how you came to help co-found John's Crazy Socks, and the incredible work that you're doing together to really make a difference for people with differing abilities out in the world. Before we get to that, and before we get to John's Crazy Socks, because I could go down a rabbit hole there. First, I'd love to know more about you and your family. I know that you're both New Yorkers. Have you always lived in New York? Mark : So, we live in a town called Huntington on Long Island. I tell the story about that with John. He sometimes laughs at me about this. So, I grew up here on Long Island in part of Huntington, Huntington Station, and when I was 19, I set out for the world. I was leaving and I'm never coming back to Long Island. So in 1997, by that point we had three kids. Our eldest was in first grade and we had moved several times. And if you move two blocks with a little kid, their world turns upside. So we said, we'll buy a house and we'll stay in one place until you get out of college. And we wound up buying a house in Huntington Bay in Huntington, not out of college, out of high school. We said, we'll stay here. And there were a few times where boy, all I wanted to do was travel and move. Mark : There was one point I had this interesting opportunity in Hong Kong, and I sat the family down and I gave them a pitch and they all listened and they nodded and they said, "Dad, that sounds great. And why don't you send us a postcard when you get there, because we're not going." But then, so our two elders, they get up and leave and John, he got an extra three years of high school, but now he's in his final year of high school and I'm thinking, and my wife, Carol is also a Holy Cross grad. We're thinking we can move. We can relocate. Mark : Even after starting this business, we thought you could run an online business from the moon. We could go anywhere. Well, the good news is the business took off faster than we expected. So, we started with a three-year lease and now we have a bunch of employees, and I am going to die on Long Island. I'm not getting away. Maura : No. Well, and I can tell too, just from what I've seen in just the different media footage and the stories about the way you run John's Crazy Socks, is it's also a community organization. Mark : We think about community a lot, we think about the community here. I'm always wary of businesses that say, we're like a family. I don't know about that. But we're building a community there. We think about the community that we're building around here, our customers and supporters. But we also think about the local community and you've got to be good citizens. You got to be engaged in their community and giving back and involved. So, there is a lot of things we do, and that's important to us. Maura : Well, thinking about community and thinking about Holy Cross, because you're an alum from the class of 1980, I know community is a huge part of someone's time at Holy Cross. I'd love to hear about your days on the Hill and what brought you to Holy Cross from Long Island. Mark : So, a different day and age. Okay. I'm getting out of high school in 1976 and I really knew nothing. I didn't really know anything about looking at schools. At a college fair, I got a booklet that seemed interesting. I applied to three schools. I really applied to two. I applied to Holy Cross and Boston College. A third school came in and started recruiting me for football but by that point, I wasn't thinking of playing football. I got in both Holy Cross and Boston College, and was going back and forth. I didn't really know how to choose. So, Boston College had me up for a weekend with a group of students and they greeted us saying, we think you want the leaders of the class of 1980. Mark : And as soon as I heard that, I was like, well, I don't want to come here. If you think I'm one of your leaders, you're in trouble. So, I wound up at Holy Cross and there were a few points. Freshman year, where I was like, I don't know if this is really the right place. I thought of leaving, but once I made the commitment to stay, well, then you're all in. And like most things, the more you put in, the more you get out. And I was thinking, I just sent a package of socks to a guy named Father Carlson, who was my freshmen advisor. And I took him for a survey of Greek lit, but I was particularly thinking of one moment, just a small moment that altered the course of my life. Mark : It was sophomore year, second semester, sophomore year. And he called me in his office. I was trying to think, how did he get me? There was no email, there was no text. But he had me come into his office and he sat me down, and he was the head of the honors program. And he gave me a picture he said, "You should really apply for this." I was like, "Me. Nah." That's not how I thought of myself. I could talk. I was a pretty serious student, but I did a lot of other things too. I didn't do a lot of sleeping. Mark : I walked out of there and thought, oh. I still, I'm not very... I'm kind of... Not counting on it... To inviting you to an honors program. I was really not very smart because I'm thinking, well, I still don't have a chance. Not even thinking well, the head of the program asked me to do this. So I apply and got in the program. And now I spent my junior year at Trinity College in Ireland. Mark : But among the other little things, you got to take the seminars and it was so wonderful. So I took a seminar in non-Euclidean geometry with a guy named, I think his first name was Ted. Ted Cecil, math professor. It was just wonderful. Blew my mind of opening up the world and different ways of thinking. And I could tell the story a little bit, but on graduation, I wind up teaching math and religion. And first question was, did you study any math in college? Yes, I studied non-Euclidean geometry. Mark : And I got to spend a year working with Bob Cording, writing a thesis on a book-length poem by Galway Kinnell, called The Book of Nightmares. And I had met Galway because he was a visiting writing instructor, actually for the Worcester Consortium. So, I was able to take a poetry workshop with him when I was a sophomore. But to spend a year engaged in writing, I learned how to read, I learned how to write. It was so wonderful. Mark : So, just that experience and the confidence it gave me and helped me, it challenged me to think, you're really not that much of an idiot. But then jump ahead a couple of years, I'm bouncing around doing different things. I'm working for a Congressman in New York and I want to get into public policy, public affairs. He's advised me to go to law school. So I apply to some law schools, and I get something in the mail from the Kennedy School of Government at Harvard. And I read it and say, "This is what I should do." Mark : So, I apply there and I get in. Later, I served on the Admissions Committee at the Kennedy School and realize how the heck did I get in? And I know the crucial factor was, I was in the honors program and Holy Cross. So for some reason, Father Carlson took that time to call in this knucklehead and say, "You may want to do this." And in that way, it was just a conversation, but it had this impact on my life. And I'm 62 now and it's still blooming, and those are special moments. Maura : Well, and that's one of the things that I really enjoy is I get to have conversations with alums like you in this podcast, is to hear how many times individual people reaching out and knowing you as a person has a tremendous effect. And the fact that Holy Cross is small and allows people to get to know you and to see something in you that you didn't recognize in yourself at that moment. Mark : There were things you got to do. Some of this was day and age. So late seventies, there was so much freedom. My sophomore year, I realized that we were at this giant buffet table and it was all you could eat. You could get whatever you wanted. And so at the time, you would take four courses each semester, but you weren't limited to that. So I saw it as, well, naturally I'll take a fifth. I don't have to pay more. And then I would find out and sit in on other classes, then I would find out if you didn't see a class that you wanted, you could just make one up. Now I know Independent Studies, but that wasn't structured then, so sophomore year went to John Mayer, who was the chair of the English Department, and he taught myself and my two housemates a course on Bob Dylan, which was awesome. Maura : That's great. Mark : I remember mentioning it to my parents saying, "I'm taking a course on Dylan," and they were like, "What are you doing?" But it was awesome. Or senior year, my girlfriend, now my wife, we were college sweethearts. So she started on a course, which is not unusual at Holy Cross, of a bio pre-med and quickly wound up as an English major. But now, in senior year and she's got to make up some of her English credits. She's not seeing a lot, she can fill it up, but she needs one more course. We'll just find one. Mark : And I'm like, "Who are some of your favorite authors?" And she hits on Joseph Conrad. I said, "Great. We'll get a class on Conrad. You and I, we'll go do this." And she goes, "How are we going to do that?" "Don't worry." And so, Pat Bizzell in the English Department approached her and she said, "Sure, this would be great." So the two of us would read a book a week, and then we would meet with her, and how awesome is that to be able to have and go and do those things. There were a lot of things like that, but it's also, there were other things that were more extracurricular. Mark : So, sophomore year around Christmas, I read Tom Wolfe's Electric Kool-Aid Acid Test about Ken Kesey and the Merry Pranksters. And they would have what you would call today, a rave. And I'm reading this with the house band, The Warlocks, which changed their name to be the Grateful Dead. I'm reading this and I'm like, I would love to go to something like that. But what do I know? So then decided we'll have our own, and went off and did things, which now I look back like, wow, that was pretty good. I got a group of people together, today we could call a board. Everybody put money in, we sold tickets. We bought some things that we resold. I won't go into that even if the, what do they call it? The standards, the laws say that they can't arrest me anymore. And we had this three-day party with bands. It was just wonderful because you could go do that. Like again, different day and age. Mark : That year, I'm sleeping in Beaven, and every Wednesday night we had a cake party where we would charge money, and $1 would go to buy the cake for the next week, and 1$ would go towards this three-day party. So, I was learning to be an entrepreneur and then repeated it at a different level senior year. I came back from Ireland, wanted to do something and we created something called The Lunchbox Theater. During the lunch hour, we would put on plays and poetry readings, and concerts, and just had a blast doing this. And I'd run around and line people up and get people to agree to stage a play. What great fun. And we could go and do it. No one was going to stop you, and that it was encouraged and that was great. Maura : Well, and I can see now why you didn't sleep at all? Mark : No. Between that and work. I had a professor, Brendan Kenelly at Trinity College who would say, you go to university to find out what you don't know. And I didn't know. Eventually Father Carlson before, so I'm taking this Greek lit class freshman year, and now we come on to our first blue books, and I was in Carlin, which then was primarily a freshmen dorm. You could feel the stress level rising. And I'm like, well, I should be worried. I should do something. And that's when I realized I had no idea how to study. I had no idea how to take notes, no idea how to study. I didn't know really what to do. So I stayed up all night, re-read The Odyssey and The Iliad and I showed up with no sleep, but it's all fresh in my mind now. A lot of it, because I was so unsure of myself and insecurity that gets flipped sometimes as bravado. Mark : I remember it was a Bob Cording class sophomore year, and okay, different time and age, and I am ludicrous. It's a 10:30 or an 11 o'clock class and small class. I think everybody was a senior, I'm the only sophomore in the class. And I'm showing up in my bathrobe, sitting in the back of the class. And he turns, he hands out the first paper, and Bob was so diligent and detailed notes, but very demanding. Hands this out and he announces to the class, "I'm really disappointed and they're poor. And I'm telling you now, you're going to have to rewrite these." Because the highest grade, there were like two Cs and everybody else got a D. And I'm thinking, what the hell? People are slumping. He says, "But was one paper that just hit the mark and I'm going to read it to you." And he starts reading it. And all the people, I'm like several rows back from everybody, they're all looking at each other because they all know each other. Is that yours? Is that yours? Slowly they realize it's the freak in the back of the class. Mark : Again, it was somebody, Bob coming to me and saying... It's a lesson I had to keep learning. Don't be a fool. You can do things and now that becomes an obligation. You got to make something of that. Plus, there's friendships. I was texting last night with a buddy of mine from Holy Cross. We're still close. For a long time at that house that I mentioned, we would have like 25 people come down for president's weekend, bringing their families. We had this at a mini reunion. My wife, Carol, during the pandemic at six o'clock every Tuesday night, there's a Zoom call where they call themselves the Carlin Girls. They're in their sixties. They're not girls, but they do a Zoom call and they'll get 20 people in it. And every five years, they take a trip together and they go to Miami, or I guess, The Bahamas they've been to, all because there's this rich connection that was made at Holy Cross. Maura : It is. It's a special, my best friends in the world are from Holy Cross. It is, it's a special time, and it's nice when you can make those connections. It's amazing to see them last. Mark : And there's something about the Jesuit Mission and the liberal arts that always has you asking, inquiring and asking for more. It directly feeds into the business we have, which is a social enterprise. We have a social mission, and where do you get that from? Well, you get it from some of the activism and some of the yearning that was instilled in me in college. Maura : Well, and it seems like, looking at your career, from Holy Cross, you mentioned the Kennedy School, and then fast forward to today with John's Crazy Socks. It seems like, and I'd love to hear from you, but it seems like there's this thread of entrepreneurial-ism and mission and 'striving for the more' that seemed to be woven throughout your path. Mark : I look back and I guess I've always been an entrepreneur. I didn't always have the language to use it, but early on, everything and again, I didn't always necessarily have the language, but everything was mission-driven. So, I got out, I taught school for two years. Pure happenstance that I did that, I went to graduate school for literature. I was in a doctoral program and I'm sitting in there, sitting in a class the day the US invaded Grenada. And I don't know if people remember. It was this tiny island and we had to go rescue medical students. It was crazy. And I'm like, I should be doing something. So that's how I got the job at the Congressman. I showed up at his office and said, "I want to work with you." They said, "Well, we don't have any jobs." "That's all right. I'll volunteer. I just want experience." Mark : We move into a community and you'd connect. I can remember when we moved into Greenpoint, Brooklyn, we were early hipsters. It was before it boomed, and through the church and we set up a food bank, we set up a clothing depository. We work with the local recycling program to set something up, because you go and do that. I spent much of my career in the healthcare field. I wound up running the Medicaid health service program in New York City, and then ran a series of companies that were trying to figure out, how do you better deliver healthcare to the poor? How do we better organize care? Mark : But some of that Holy Cross thing was always there of the liberal arts and how do you pursue that mission and those values and still be carrying things out? But that wide interest, it fueled a lot. I started a software company. I ran political campaigns. I did a fair amount of writing. I published some of my less than really terrible fiction. And even this enterprise, we've now been doing this for four years, but people would say, well, when did you get into it? How long have you worked in retail? How long have you been in the sock game? Got no background in it. But I'm 62 today, everything I have done has prepared me for this moment. Everything I have done in my life has prepared me for this interview. Maura : Well, and that is the perfect segue to pull you into this John too, and to talk about John's Crazy Socks, and talk about the incredible work that you are doing. Because you're making a lot of change and you're doing a lot of good in the world through this company. Mark : We're very fortunate, but what are the two things you always talk about? John : Try to do for others. Mark : Try to do for others. It sounds trite, but the more we can do for others, the better off we are. We're living a dream. We get to do what we want to do. We have no excuses. We can't blame it on the board. We can't blame it on headquarters. And it also speaks to the way we run the business and our appearance. One of the internal ambitions, and I've always wanted this to be a way, I want this to be a great place to work. I want people to love working here. We work at that and you make that happen, and that runs through... What's our overall mission pal? John : Spread happiness. Mark : Spreading happiness. Well, you got to start at home and people got to be happy, and you have to understand it can't be lip service, it's got to drive through everything you do. So, here's an easy way. When it comes to customer service, you heard the old saw, the customer is always right. Nonsense. The customer can be damn wrong. But we're not in the business of being right. We're in the business of making customers happy. So, we don't limit any time that people spend with customers. People that work with our customers know they can spend 200 hours on any customer, at any time, doing anything they want, just go and wow that customer. Mark : We had something last week. Somebody had ordered something they said they were going to pay by check. That's pretty rare, somebody say they pay by check. And what our folks did was they said, "Okay," but they didn't fill the order until the check arrived. And when they did, it was an item we had sold out. So we sat and I said, let's think about this. First, in four years, maybe we've received 15 checks. It doesn't happen. Every time somebody says, they're going to send us a check, they send us a check. So, why not just live in a world where we trust people. And as soon as we get the order, we ship it out and trust that we're going to get the check. And my colleagues are looking and saying, "Can we do that?" "Why not? We can do whatever the hell we want to do." Mark : And they were like, "Well, what if people do this or that?" I said, "Nobody does that. Would you do that? So why don't we just treat people that way?" And it's so easy. And wouldn't you rather live in that world? Maura : Yes. Mark : Now, if we get burned, if all of a sudden people are fake, but it doesn't happen. We doing the same thing with our returns. You don't have to send us anything. Just let us know. If there's any problem we're going to replace it. We're going to give you your money back. We want to make you happy. What results of that? Well, if we treat you that way, you tell other people. Aren't people happy, because we're not going through stuff. We're just trying to make you happy, and our return rate last month, our refund rate was 0.6%. Businesses would kill to do that. We give away anything we can. Maura : Well, and I know that the origin story, if you will, of John's Crazy Socks is out there for people to read and to watch. But I'd love to hear from you about that moment, because I talk to so many people who dream of starting their own business. Who say, someday, I'd love to do this, but there's a very small percentage who actually do it. So what sparked that courage to really go and make this happen? Mark : Well, first of all, it is, again, it's much simpler than you think. Worst thing that happens is, you fail. And you go on. But ours grew out of a specific situation, this particular business, and origin stories matter. Because you take your DNA and they run through everything. So ours, it's the fall of 2016, and where were you buddy? John : I'm in school dad. Mark : Which school? John : Huntington High School. Mark : So, he's in Huntington High School in the states, and this is across the country. You can remain in high school until you either graduate or turn 21. If you have a disability, you can stay until you're 21. So this was going to be John's last year at school. Like everybody else, he's trying to figure out what do I do next? What are you looking at? John : I looked at shop programs in school. Mark : See anything you like? John : No, I never saw anything I liked. Mark : Well, the answer is, there's not a lot of great choices. John grew up in a household where he saw me starting different businesses and running things. And I'd like to say he's a natural entrepreneur, because he did things like that himself in school. I remember showing up at his summer school, we've got a summer program, and came into some and the principal came out and said, "I want to talk to you about John." And that was always good. Particularly my middle guy, Jamie, the principal comes, wants to talk to me, that's not good. That's the same way with me. But with John, okay. Well, it turned out John wanted to run a talent show, and he organized a talent show at the school. Never mentioned to me. He didn't think why I have to ask permission, I just go and do this. Mark : So, he doesn't see anything he like, the natural entrepreneur doesn't see that as a problem, but as an opportunity. So what do you tell me? John : I want to go into business with my dad. This is my idea. Mark : I was starting some online businesses. He comes and tells me that, it's like, okay, let's go do this. And traditionally, what you do in a business, once you get the idea, is you stop everything to prepare a business plan. Work out your competitive analysis, your market research, your operational projections, financial projections. We did none of that. We went what's known as the lean startup route. We were bootstrapping. Let's just get something up and running. I've worked with venture capitalists before and done that. We didn't want to do that. Just get something up and running. And he's the perfect partner because he just believes, of course this is going to work. Maura : Why wouldn't it? Mark : Why wouldn't it? And so much of what we've been able to do is why not? So, I'll let you know on something that's coming up on March 30th. This is top secret information. On March 30th, we're going to introduce our unity socks, which are blue socks with American flags on them. We want them to symbolize inclusivity and unity, and we get this idea. We want to give them to every member of Congress. So on March 30th, we have two local congressmen coming, a Republican and a Democrat, to help us introduce these socks, and we're going to give them to every member of Congress. We've already been invited to come up to Albany and do it in the New York State Legislature. And we see ourselves that we can go across the country, just symbolizing look what's possible. Have John be handing out these unity socks. What a wild, ridiculous idea and yet, okay, who's going to stop us? Maura : And yet it's so perfect. What a perfect idea. Mark : And it just grows. Not every idea is a good idea. We have bad ones. We do a lot of presentations. Right before this, we were speaking virtually to a school in New York City. Last week, we got a question from a high school student, need to ask permission from to do these things. It's like, no, that's part of the power. You don't have to ask anybody for permission. Just go and do and come back to... It's the nature of the social enterprise. You've got to have a mission. Mark : You can't be, we just want to make money. It's got to be something larger than yourself, an impact you want to have on the world. And when you're driven by that, it's so motivating. All the petty stuff falls away, and that's how you can go and connect with people. We get asked, what's the key ingredient? Which skill? A lot of it is just belief. If we have a mission to spread happiness, just believe. So when you ask on the origin story, okay, we'll find a way forward and we'll go test it. And it turned out it went well, right buddy. Maura : Well, I think even more than just believe, you talked about wanting to make a great place for people to work. And I think that the fact that you care about your employees, and you care about the people, both who work with you and who you serve, that is another really big piece. Mark : It's all the whole. So yes, our mission is to spread happiness. You do that by hiring people with differing abilities and showing what they can do, by giving back and by making personal connection with our customers. When it comes to this workplace, one of the things we're trying to share with other employers, hiring people with differing abilities is not altruism. It's good business. And what do we see? Morale is way up. Productivity is high, retention is through the roof and it helps us recruit. And it makes for a better workplace. You think the benefits would mainly accrue to the people with differing abilities, but everybody is better off and everybody is happier. Mark : But I've worked over the years into, in essence, a formula on employee engagement. One, you have to start with a mission in which people can believe. It's got to be something greater than ourselves. It's got to be something that can matter. Two, everybody has to know how they fit into the mission, how their job matters. There's no leg work. There's no, I'm just a cog in a machinery. Yes, our webmaster knows, but our sock wranglers, that's what we call the pickers on our pick and pack warehouse, they know their job matters. Mark : Three, put people in a position to succeed. Don't ask them to do what they can't do. Give them the tools. If they need a special chair, get them a chair. If they need a software tool, a webmaster needs some analytical tool, get that for them. As a manager, you have to be a leader. And in doing that, what you have to make clear to people is, I work for you. My job is to put you in a position to succeed and if you have problem, if you have a limitation, my job is to try to help remove that limitation. Mark : Four, recognize what people do. People care. It's as simple as saying, thank you. I saw you doing this. What you do matters. We value. And then the last, stay the hell out of the way. Let people do their jobs and they will thrive. But some of this comes down to, it's like a Christian thing. Do unto others, treat people the way you would like to be treated. If you treat people poorly, they will respond that way. If you treat people that I don't trust you, so I have to manage and inspect and micromanage, they will respond in kind. Maura : Well, and I know that you've had a lot of opportunities to spread this message. I recently saw that you joined this CEO Commission on Disability Employment. And I know when we've spoken before, you mentioned going before Congress in the past. Mark : We've been very fortunate. We've had a fair amount of media coverage. We've had some viral experiences, and we go out and basically proselytize. John, you love the speaking engagements, right. John : Yeah. I love speaking engagements. Mark : So yes, we've done things. We've testified twice before Congress, we've spoken to United Nations. We're part of the State Department Speakers Bureau. So they had us take a little speaking tour in Canada. We didn't get tour T-shirts made up, next time we will. And yes, we're on the CEO Commission for Disability Employment. And I laugh. This was founded by Voya Financial and the Society of Human Resource Managers. How are we on this? Like, we're on this National Autism @ Work Roundtable with IBM and Microsoft and Ernst & Young and Warner Brothers, and John's Crazy Socks? Mark : We appreciate the opportunities and you could go back to Rome and find this motto, and you can see it with the Kennedy's and with Spider-Man. To those who are given opportunities, come great responsibilities. So I'll give you an anecdote on that. We're down on Capitol Hill, and we get a phone call here in New York in the office, from a customer in Houston who says, "I see that John and Mark are on Capitol Hill. My mother works there. She's a big fan of John's, would it be possible for them to meet my mom?" Person says, "Sure. Here's Mark's cell phone. Just text him your mom's name and contact information and he'll do it." Who's mom? Nancy Pelosi. Mark : So now, we get an audience with Nancy Pelosi and forget about right wing, left wing. We vilify our politicians too often, or deify them. They're just people. She's a grandmother. She comes in, her eyes light up seeing John, and she brings out pictures of socks that she gave former President Bush, because John had become a sock buddy with former President Bush, George H W Bush, where they exchanged letters and socks, and all this is great. We take photos, but now we have this opportunity that creates an obligation. Mark : So it's yes, but Ms. Pelosi, we have to talk about some other matters. One, we have to talk about repealing section 14(c) of the Fair Labor Standard Act of 1938, great piece of American legislation. It created the 40 hour workweek, it eliminated child labor, it created overtime. But it allows employers to pay people with a disability less than minimum wage. So, there are 400,000 people being paid as little as five cents an hour. And we are grateful that we have this opportunity, but we are now going to take advantage of this. Mark : I'll give you a recent one where, despite our best efforts, we contracted the COVID virus, John, my wife and myself. And for Christmas, we gave John a hospital stay. He was admitted on Christmas Day, it was dicey for a few days. People say it's nothing, it's just the flu. Now very healthy, got out eight days later. So, we held an event at the hospital because we know we can attract media attention. So we went back to the hospital and you got to thank everybody, right? John : I did. Mark : But we also used it to do two other things. One, to raise awareness about the risk that people with down syndrome face, they're not more likely to get the virus, but if they do, five times more likely to be hospitalized, 10 times more likely to die. So, we want to get that word out. The other thing, the hospital let me stay with John the entire time, even when he was, because things went bad for a day or two. When they moved him to the critical care unit, they let me stay. Now, Federal Regulations require that people with a disability, that they get access to their caregivers. That's not the way it's practiced, particularly during COVID. So, we wanted to highlight look, this is better for everybody. That there's always a little medicine with the sugar. Mark : So, we keep driving that mission and you can't separate the two. We'd like to make money, we'd like to live indoors, like to pay the rent. And if the business doesn't succeed, then we'll go home and all this stops. So you got to make that happen, but like the giving back. So, we baked into it from day one. We donate 5% of our earnings where? John : Special Olympics. Mark : Special Olympics. Why the special Olympics? John : I'm a Special Olympics athlete. Mark : And then we've created a whole series of products that celebrate causes and raise money for charity partners. So the first one was a down syndrome awareness sock, raises money for the National Down Syndrome Society. But more recent ones, an EMT tribute sock raises money for a local EMT squad. Last April, we wanted to thank people. We introduced healthcare, superhero socks, and they've raised over $50,000 for frontline workers. Mark : And there have been different points when very smart people have said to me, you're not making money. What are you doing making these donations. But we wouldn't have the business we have if we weren't doing that. Willingness for the long haul. So, among things that are really cool, our little business we've raised over $400,000 for our charity partners. Maura : That's amazing. Mark : John here is a special Olympic athlete, who's raised over $100,000 for the special Olympics. We make sure everybody who works here knows they're all philanthropists. It's very cool. We're so fortunate. So in the end, we are these knuckleheads running a sock business and this is a small business, and all we want to do is change the world. How much fun? Maura : And you're doing it too. That's the incredible thing. Is even if it's in small ways, as you showed all of these donations, one pair of sock here, the one conversation there, it's changing hearts and minds. Mark : That has been the thing that has surprised us the most, and it's still hard to wrap our minds around and we have to be really careful about. But people take inspiration and there is a deep, emotional connection. I could tell you all sorts of stories of things we get to see, but I'll tell you one that my wife likes me to tell because I tear up sometimes. Mark : The National Down Syndrome Society sponsors Buddy Walks around the country, but the biggest one is in New York City. Before it starts, they rent a billboard in the city in Times Square, and they want like a video with faces on it of people with down syndrome. So, we go there and John's like a rock star in that community. People are swarming him. But a woman comes up to me and just hugs me and says, "Thank you." Mark : Okay, what's going on? And she explains that she is from Curacao, an island just off of Venezuela. And she tells us that her daughter had gotten pregnant and tested that she was going to have a child with down syndrome. She explained that on Curacao, people were ashamed of people with disabilities, that they hide them. It's something they don't want deal with, talk about it. And in fact, everybody knew that her doctor said, "This is what you're going to do. You're going to get an abortion." And to me, this is not really an abortion story. This was just, this was grant. This is what's going to happen. And the family came home and they saw a news story about John and John's Crazy Socks. Mark : And she said, it changed their entire outlook. And she introduced us to her one year old son. How awesome. We get people coming up to us all the time, thanking us and telling us how they want to do this with their child, or it gave them hope. And we have to be careful. We have nothing special. We're just out doing these things and sharing. So when John stands up in front of a crowd, be it 10 people at a SEPTA, be at 22,000 people at Madison Square Garden, and they see what he can do, it changes people's minds. And we are very fortunate to be able to do that. Maura : I think you really are living that mission of spreading happiness and of doing great things with the opportunities that you've been afforded. Mark : We've been given a lot. We had our family and I could go on about my other boys and the love of my life. We'll be married 40 years. John : It's 39 years still. Mark : It's still 39, I know. Mark : There's a reasonable chance that we'll make it to June. Reasonable chance. Maura : Fingers crossed. Mark : Well, you know. I'm still a Dylan fan. There's that line, when I see you, I don't know if I want to kiss you or kill you. A lot a marriage in that. Here's just some of what we get to do, and how fortunate. We get to see minor miracles all the time. So one of our colleagues, Thomas, his mother calls us in October of 2017 and says, "I understand you hire people like my son. I need you to give him a job." We're not hiring, we'll post when we are. She calls every day and the moms are persistent. She's not the only one who's done this. So I got on the phone with her and I said, "Well, tell me about Thomas." Mark : She says, "Well, he's early twenties. He's on the autism spectrum. And he's in a very bad way. He's very depressed. We have trouble getting him to come out of his room. He won't shower or shave. He doesn't want to deal with anybody. We can't get him to join any programs or activities. It's so bad he hasn't spoken to his father in over six months." Sounds like a great employee. Mark : So, we have an opening and bring him out. And the opening is for our sock wrangler position, that's kind of our entry level position. We pay $15 an hour to start because everybody, you got to pay a fair wage. The way you get the job, you meet with John and me. We want to make sure you understand the mission and our values. Then one of our current sock wranglers will train you and they love doing it. You've trained people. John : Yes. Mark : They love doing it. And then when you're ready, you have to pass the sock wrangler test. You got to pick six orders, 30 minutes or less, show us you can do the job. Well, Thomas comes out and after an hour of training, says, "I'm ready." And he passes that test as if he was put on this earth to be a sock wrangler. Today, on the days he works, Thomas is ready, showered and shaved at 6:30 in the morning for his father to drive one hour to work. When he gets in here, the young man who wouldn't look at anybody or talk to anybody, goes around and wishes everybody in the building a good morning. Mark : I want to be really clear here. We did nothing. We did no special training, no government funding, no special programs. All we did was give Thomas the opportunity to earn a job, and how fortunate are we? And so Holy Cross, the imprint that studying and understanding the liberal arts in the way it gets you to think and prepare, the way you imbue. Some of this comes from studying literature. You imbue different levels, different things all in the same action. That runs through what we do. I've spoken to students. Mark : So, I was an English major, I got out in 1980. There was no internet. Fax machines had not come, they've come and gone. There were no cell phones. We run an E-commerce business, I couldn't have studied that if I wanted to. But the liberal arts let you understand how to learn, how to figure things out, and so this runs through what we do today. And a lot of my classmates would be shocked to think that someone would be interviewing me for a Holy Cross alumni network. You've met those friends. John : I do. Mark : Paul, you should be talking to him. Paul Miles running a charter school and John Flynn, who's got this bicycle recycling program in Hartford. Charlie Brown or Chris Potter and Sue Mack and all these good people. Maureen, lots of good stuff. Maura : John, what's the best part for you about working with your dad? John : One thing I love working with my dad, I'm so lucky to be where he is. I'm never without my dad. He always, I've changed I can, if possible. I love my dad. Third and lastly, about my dad going to Holy Cross. I am a proud son because I am so, so happy of him being my father. Mark : What about your mom? You got to speak up for her, right? John : Yeah. I'll never forget mom. I am proud son. I am so proud of my dad, my mom accomplished. They are amazing accomplished. Mark : And you like hearing the stories of how we met, right? John : Oh yeah. Dad is so romantic. Mark : Romantic? Ricky, Kevin and I were looking for beer. And I can tease something for you. I'm not going any further than this. I've read in the alumni magazine and seen references to the fingers on the Jesus statue in the quad. I can tell you I was there and I know what happened. But that's it. No names, no details. Maura : Living mystery. That's what that is. Well, and my last question, this has just been really wonderful. What is your favorite pair of socks? Mark : What's your favorite pair? John : My favorite pair, my down syndrome superhero socks. Mark : Down syndrome superhero socks. Maura : Yes, that sounds like a good pair. Mark : Whose face is on those socks? John : Me. Mark : You. Maura : Good choice. Mark : You're a funny boy. Maura : I think we'll all have to check out that pair of socks. This has been an absolute pleasure. Is there anything else you want to share with listeners before we go? John : I want to say something. It's something that I said before... Mark : Go ahead. John : I am so proud of my dad's career. I am so proud of my dad's career and college. I am a proud son. I love my dad and what he did. It's wonderful. Mark : Well, there's a late poem from Yates where he recounts his achievements and those were notable, part of the revolution, part of the day of the Senate, winning a Nobel prize. But the refrain is what then sang Plato's ghost, what then are you going to do for me next? And we get to keep doing things, right? John : I love you dad. Mark : My boy. Maura : Thank you both so much. This has been just such a pleasure. John : I'm so proud of you Dad. Mark : Well, you let us know if there's ever something we can do. You got to put the pitch in. Where do people get stuff? John : At JohnsCrazySocks.com. Mark : There you go. Maura : Perfect. Yes. And I can say, I treated the alumni relations team to a pair of donut socks last year for Christmas, and they have been a big hit. So, I am a fan of John's Crazy Socks. Thank you for everything that you do. Mark : Well, thank you. John : I'm a big fan of my dad. Mark : You're a fan of your dad. Boy, you are being nice to me today. Maura : That's our show. I hope you enjoyed hearing about just one of the many ways that Holy Cross alumni have been inspired by the Mission to be people for and with others. A special thanks to today's guests and everyone at Holy Cross, who has contributed to making this podcast a reality. If you or someone you know, would like to be featured on this podcast, then please send us an email at alumnicareers@holycross.edu. If you like what you hear, then please leave us a review. This podcast is brought to you by the Office of Alumni Relations at the College of the Holy Cross. You can subscribe for future episodes wherever you find your podcasts. I'm your host, Maura Sweeney, and this is Mission-Driven. In the words of St. Ignatius of Loyola, now go forth and set the world on fire. Theme music composed by Scott Holmes, courtesy of freemusicarchive.org.

更多英语知识，请关注微信公众号: VOA英语每日一听 Sorie: So Mark, you and I are married and we've lived in—Mark: We still are, aren't we?Sorie: We are married. I said we are married. And we've lived in several special places and I'd like to share our experience of Ogasawara.Mark: Ogasawara is amazing, isn't it?Sorie: Yeah. Can you tell us the place, and where it is?Mark: Ogasawara is a group of islands that's in the Pacific Ocean. And there's no airport there and if you want to go there, you got to take a boat that goes from Tokyo. And that boat takes 25 hours to get there, and it runs just once a week.Sorie: That's right. It's 1,000 kilometers away from Tokyo.Mark: Yeah, directly south.Sorie: Okay. And the population?Mark: There's two inhabited islands in Ogasawara. One is called Chichi-jima and there's 2,000 people, roughly, there. And Haha-jima is about 400 people.Sorie: Yeah. And Chichi-jima is Father Island and Haha-jima is Mother Island. And Father Island is a little bit bigger than Mother Island.Mark: Yes. And we lived in Chichi-jima.Sorie: And we lived in Chichi-jima. That's right. And what kind of—we had an amazing lifestyle there. Do you remember how we ended up there and what we were doing?Mark: Well, our good friend Rio-san has a eco village in the mountain there. And he built the whole place on the side of a mountain with his bare hands basically, with wood and he built his home where he lives with his wife and two children. And he built loads of like cabins, as you might in Thailand or Philippines or somewhere like that, which is quite unusual in Japan. But he built these also with his own hand and he like connected them together with like wooden bridges.And yeah, that's where he lived and we really wanted to live so close to nature. So we saw Rio-san and found out that he had a little shack at a bit lower down from his house, and the girl that was living there was gonna move out. So we really wanted to move in there. So we asked him and we ended up living there.Sorie: Yeah. I remember the day we went to see that little shack. And it was extremely small, four-by-three. I would say, 4 meters by 3 meters.Mark: 4 centimeters by 3 centimeters.Sorie: It was really small.Mark: That's how small it seemed.Sorie: And it was hanging on the side of the hill. Yeah, it was raised on a scaffolding, and because it's a very wet place, so it gets really humid and you don't want any contact with the building and the land. So we were hanging on the side of the hill.Mark: And there's the ants. Do you remember the ants? They had to build it on the scaffolding because there was white ants. They called them termites, that can eat the wood.Sorie: That's right.Mark: Do you remember seeing those ants?Sorie: I remember that. I remember how scared we were when the hurricane -- the typhoons would come and the whole shack would shake. And we'd be like praying so that we wouldn't slide to the side of the hill.Mark: Do you remember our chickens?Sorie: Yeah, we had four chickens. What about our toilet, do you remember?Mark: I remember our toilet. Digging the toilet. I remember digging the toilet and making the compost and moving the toilet every now and then. I remember growing all the vegetables. I remember collecting the eggs.Sorie: Yeah. One of the hardest things was the showers. We had this solar panel-run showers, and when it was cloudy, in the middle of the winter, I would suffer. It was so hard to take cold showers.Mark: Yeah. It wasn't like very cold was it really compared to mainland Japan but it really, really did feel cold with the wind there. Like you say, when the cloud came across because there was no hot water—yeah, it was tough. But did you remember next to the showers, every two weeks or so in the winter, Rio-san would light up the—make a fire, like wood-burning fire which heated up the outdoor pool?Sorie: That's right.Mark: And there's no hot springs on the island but we got to sit in the pool, under the stars in the evening.Sorie: Yeah. There were so many great experiences and to realize also that nature is so powerful. And if you want to live with it, you have to coexist and you have to be very strong to live in a place like that.Mark: Hmm.Sorie: And do you remember also the community, how everyone was?Mark: Lovely community, wasn't it?Sorie: Hmm, because it's such a small place.Mark: Exactly. There had to be a strong community in the mountain. There's only 400 people in the mountain, wasn't there? Two thousand total. It was like a separate village from the other village.Sorie: From the main town.Mark: Yeah, everyone looking out for each other and sharing. Do you remember the fisherman who used to share his fish?Sorie: Ah! He'd bring this big chunks of tuna, fresh tuna. It was so delicious.Mark: Such good memories there, wasn't it?Sorie: Yeah, definitely.

With many employers looking at changing contracts as a way of avoiding redundancies, we ask Acas advisers Mark Makin and Helen Robinson how to do it well. We explore:- The best way to change employment contracts- Why consulting staff matters- How to do this well remotely- What your rights are as an employeeEpisode Resourceshttps://www.acas.org.uk/changing-an-employment-contractTranscript Sarah GuthrieWelcome to the Acas Podcast. We're talking today about changing an employment contract with Acas advisors, Helen Robinson and Mark Makin, and I'm Sarah Guthrie. This is topical at the moment because lots of employers are looking at changing contracts as an alternative to making people redundant. So employers are asking, how can we do that? And members of staff might be asking us, can my employer do this? So Helen, let's start off with employers. What's the best way of going about changing an employment contract?Helen RobinsonThere's a number of different ways that an employer can can consider changing somebody's contract or varying the terms and conditions. But I think the best way from an Acas perspective would be where possible to do so by agreement. If an employer speaks to a member of staff, and they are able to get their agreement to make a change to their terms and conditions, then ultimately that is going to be the best way for conducive working relationship moving forward.Mark MakinTo echo what Helen said there, taking the workforce with you - informing, explaining consulting, discussing, providing feedback - that sets the tone for the relationship once the change comes into effect, because the trust and the goodwill will need to be there to take the organisation forward afterwards. And if we make changes without agreements, there's a big possibility that that trust and goodwill won't be there, which is going to create problems with itself.Helen Building on that, I mean, what some employers are choosing to do is to see whether they can make these changes on a temporary basis because staff might be more willing or accepting to the changes there. And I've also spoken to an employer recently who has offered an incentives so the change that they were looking at making was a 10% pay cut and that was across the board 10% pay cut for all staff. That was a measure to look at avoiding redundancy. And what the employer said almost as an incentive was that if this didn't work, and if actually they did need to make any redundancies within the next 12 months, their redundancy pay and their notice pay would be calculated at their original wage so that the wage that was slightly higher, and so that that was something that went some way for for stuff agreeing to that change. Sarah Yeah, I can see why that would really help because we've heard stories of people who have agreed to a temporary pay cap with a perception that then they won't be made redundant and get made redundant and then also have their redundancies as calculated on their most recent pay, which is half of what they were being paid. So I guess it, it sounds like thinking through in detail how your staff will respond to the changes you're proposing both in the short term and the long term is really important here. Some people listening to this podcast might be thinking, Well, can employers change a contract? What are my rights? I wondered if you could give us an insight into that.Helen If a member of staff agrees to a change, then absolutely a change can be made to that contract, whether it's on a temporary or a permanent basis. I think it's very, very important when we're looking at agreements and agreeing to a change that an employer is very open and honest about what this change is going to be. How long is it going to last for? Is it going to be permanent? Because employees need to have that information so that they can make an informed decision about whether they are happy to agree. But I also think it's equally if not more important for employers to be open about the reason behind the change. Because if they approach their staff and they speak about Okay - we will use the 10% pay cut as an example - we're looking at giving you a 10% pay cut, if that's all the information that staff have, then it's highly unlikely that they're going to be happy about that or agreed to it. Whereas if an employer approaches staff and says, Okay, look, we're looking at a 10% pay cut and the reasons are because x y z, people still may or may not be happy about it, but they might be more likely to respond to that say, Okay, yeah, I can understand the reasons why. And yes, I will accept that change.Sarah So keeping very clear communication around the reason why and also how long it's likely to be for and what the long term consequences of that might be. And, Mark, what have you seen from employers about good practice in this area?Mark I think it is the communication as early as possible, as open and transparent as possible. And it's two way. Feedback is given. I think that's something that is often missed in this type of process, where the employer may well go into this type of situation. And they will listen to what people have to say, but they don't provide the feedback. And the feedback may be that was a great idea. But we can't do it, because in some cases, it may be that's a great idea we haven't thought about. Let's discuss in some more detail how we might be able to implement that.Helen Just remember that if you are looking at changing the contract of 20 or more people, there are additional consultation requirements on you, and that you would need to collectively consult. So that would mean either involving trade union representatives if you recognise a trade union, or giving staff the opportunity to appoint employee representatives to almost act as a go between and have conversations with employer and staff themselves.Sarah And that two way communication is very different at the moment for most workplaces than what we would have encountered in the past. Do you have any insight into the challenges of doing this remotely and how people have been overcoming them?Helen I think there are I should say that added challenges. And I think sometimes it's very important for employers to remember that actually, people have got other stuff going on at home. At the moment, yes, they may be working from home. But it might be that they need to schedule a specific time to have important conversations such as these when I don't know if they've not got children at home or the partner is able to look after children at that particular point or other caring responsibilities. So being very, very clear about what's going to be spoken about in a specific meeting or specific virtual meeting. But making sure that that person is in the right frame of mind with minimal distractions to have this conversation because it is an important conversation. Just because people are working remotely or we may have people furlough that we need to speak to, there still needs to be a good level of communication. And what I mean by that is not just an email chain, it's a conversation that would usually be had and it should be a conversation, have it as a conversation, whether it's a video call, whether it's a telephone conversation, not just an email to all and saying this is happening or we're proposing this how. Have a conversation.Sarah So you mentioned Mark that one of the things people often miss is the two way feedback and the need for that. What other mistakes have you seen employers making? And why do you think those mistakes are being made? Mark There's sometimes an assumption that I've made this decision for the good of the business. So people will automatically accept that it's the right decision. So one of the mistakes that is often made is that that communication, early communication doesn't take place. A decision has already been made, and the employer presents it to the staff almost as a fait accompli, and then is shocked and surprised when they get objections to that, or when people have concerns about it. Or when there is a long list of questions about well, how will this impact me? What does this mean for me? When is it gonna happen? It's it's almost like the employer sometimes jumps the gun and makes the decisions for good reasons, but misses out that communication stage consultation stage.Sarah One thing that's really struck me about doing this process well is that it can take quite a lot of time. And I wonder what you would say to somebody who's thinking, well, that all sounds great, I don't have time to do this.Mark Ultimately, the decision is the employers. But the conversation that I would have with them would be centred around not just the legal risks that they might face if they get this wrong - so there might be breach of contract claims there might be constructive dismissal claims, there might be claims centred around the failure to consult properly if they are in a collective situation. But I'd also talk about some of the less obvious risks, the impact on your workforce, in terms of morale and motivation, the goodwill and that trust and confidence that needs to exist between the employer and the workforce in order for them to function properly.Sarah And so what rights do you have as a member of staff who's going through this process? Perhaps there's been a proposed change, perhaps your employer has or hasn't handled it well? Could you just talk us through what rights you have?Helen It's not an uncommon question from from an employee to say, Okay, well, you're talking about agreement to change, but actually, I don't want to agree to it for whatever reason, and it may be that an employer has done absolutely everything that Mark and I have spoken about. They've consulted they discussed, they've been very open about the the reason behind this change, but the change doesn't suit the member of staff and that is a real life situation. And I think in all circumstances, there's absolutely no obligation on a member of staff to agree to a change. But I do think it's, it's worth being aware that ultimately, if they don't agree to change, there are other options that are available to their employer. For example, if an employer feels that they've got absolutely no option, but to make this change, and their business may go under otherwise, for example, then they do have the option of actually ending the existing contracts by giving notice. And then re-engaging their staff at the end of that notice period on new contracts. What I would say is that it's not a risk free thing for an employer to do. It is still technically a dismissal, you dismissing somebody from their existing role, from their existing contract. And with that in mind, an individual would have the option, if they chose to, to appeal against the decision. They'd also potentially have the option of actually treating that notice as notice of dismissal. And if they felt it was unfair, and they weren't engaged in the new contract, they could potentially look at making a complaint to an employment tribunal around that. So it's not risk free for an employer. It's an option but it's not not a risk free one.Mark As well as the agreement route to vary a contract, and the dismissal and reengagement route to varying contracts, some employers already have flexibility clauses built in to their contracts, which they can invoke. Just a word of caution around flexibility clauses: they do need to be well written, they need to be quite specific, and they need to be reasonable in order them for them to be to stand up and and be operative. And you usually find them around place of work, job role, job function, hours of work. Even if flexibility clauses already exist in a contract before invoking them, I think it's good practice for the employer to speak to staff and explain the circumstances such that they feel they need to invoke the clause. Here's the reason why I feel a need to involve the clause and here's the fine detail about about when and how and what it might mean for you. But then leave the door open for the staff to come back with questions, concerns and objections of other suggestions and ideas. There is another option, unilateral variation, which involves the employer simply making the change and imposing it on employees. But it is fraught with risk and it should be only used as a very, very last resort. It opens the door to legal challenges, it doesn't go down well with the workforce, it will damage goodwill, it will remove any discretionary behaviour that might have been the previous layer, and it just doesn't make for good employment relations as well as the the big legal risks that come along with imposing changes on your workforce.Helen And I think if I if I just add to that, I did some work with an organisation last year - so we're talking pre COVID pre pandemic. And the employer had done exactly this, they had basically informed all of their workforce that as of next week, they were going from a five day to a four day working week, and the pay cut that that attracted as well. Now as Mark said, they lost a lot of goodwill from their staff with that, but what also happened was they lost within about the following month, four members of staff left and went working for another organisation. But what had actually happened, these four particular members of staff were quite specialist, so they had to be replaced. So there's all these then additional costs that the employers got of losing experienced, knowledgeable members of staff, and then having to go through recruitment again to replace them when they were already struggling with money, which is why this this going to four day working week had come in in the first place.Mark And I can see in a situation like that Helen where, if the employer had spoken to people in advance, early, been open about the need to make the change, staff may well have agreed to that once they understood the full picture. Helen Absolutely, yeah. And I think at the end, the employer in his particular circumstance, had done exactly what we were talking about earlier. He'd fallen into one of those traps where they felt they had consulted because they themselves had thought about all these different measures or different ways and come up with the solution. But they'd done it on their own. They hadn't involve their staff during that thought process.Sarah I'm just thinking of people who are listening to this and thinking my employer is not doing this well. They haven't consulted very well. They haven't listened to that feedback. What would you advise someone in that position about how they can help their whole workplace go through this process more smoothly? Helen I think in the first instance, and this would be true of any concern that any member of staff has within a workplace, we would be advising them to raise that and to raise that internally. I think it's very important for both employers and members of staff to see whether a situation can be resolved internally before they think. Okay, well, is there any sort of external complaints I could make? And part of the reason for that is something that Mark mentioned earlier on, it's about the fact that hopefully, a working relationship is going to continue. And the more that that can be resolved internally, and informally wherever possible, the more likely it is that that working relationship will continue and will continue to be positive. Sarah Thanks. That's been really helpful. I wondered if you could leave us with a key insight that you've had to during your work on this topic. Helen The key thing - and Mark and I have referenced this throughout our conversation today - is to communicate and to communicate as early as possible.Mark And to keep communicating. I've seen situations, certainly in collective situations where there are laid down consultation periods that the employer must observe. But I've seen situations where we get to the end of that 30 days or 45 days, depending on the numbers, and the employer decides that's it job done, when it would have made so much more difference if they just kept that talk in that communication going for a few more days, because they were making progress. Things were developing yet, they'd come to the end of the statutory consultation period, and they felt that's it. That's the green light to move ahead now. So don't be bound by any limits. If things are moving ahead. If progress is being made, keep talking. Helen Absolutely. Yeah. Sarah It's a great thing to remember for all workplace relationships, not just varying a contract, changing your contract. And so thanks very much for your insight today.Helen Thank you. Mark Okay.Sarah You've been listening to the Acas podcast. You can find full details about what you need to know about changing an employment contract on our website at www.acas.org.uk Thanks for listening. See acast.com/privacy for privacy and opt-out information.

How to break through ROADBLOCKS and get to the next level? You hit those exciting milestones in your business… Whether it’s $1,000…$5,000…$10,000…$100,000, or even hitting your first $1,000,000 in revenue with your funnel (Two Comma Club)! But for whatever reason, no matter what you do, you just can’t seem to get past that first milestone. You get stuck. Something’s standing in your way and you just can’t figure it out. So how do you drive past that roadblock? How do you get to that next level in your business?This is critical because EVERY entrepreneur, every business, and every Funnel Hacker WILL hit this wall at several different stages as you grow and scale. In Part 3 of this 4-part interview with my mentor Mark Joyner, I share exactly what to do to break the glass ceiling in YOUR business. ---Transcript--- Russell Brunson: What's up everybody. This is Russell Brunson. Welcome back to the Marketing Secrets Podcast. Today you are ready and prepared, I hope, for part three of a four part series, where I had a chance to do an interview with my very first mentor, Mark Joyner. And what's cool about this is, in the past, I've had a chance to interview Mark a lot of times, but it was the first time that he ever interviewed me, which was kind of... Anyway, it was a huge honor to have your mentor asking you questions about stuff. And so, like I said, in the first episode, Mark was my very first mentor online. Someone who I, man, have so much respect for, and so grateful for him and his contribution that helped me to figure this game out. And I hope you guys enjoy part three of our four part series with my very first ever mentor, Mark Joyner. Mark Joyner: Okay, third thing, third thing. Russell: Third thing, all right. So, I think the reason why a lot of people, as they're trying to grow their company, they hit these ceilings. I struggled this. I got stuck between one and three million dollars a year for like a decade. I couldn't break that ceiling no matter how hard I did. And what I realized is, as we launched ClickFunnels, the first phase of the business was like, there's the hyperactive, the first set of customers, which were the easy ones, right? They get it, they're the early adopters, they figure stuff out. And those are the customers that are already there. They're just waiting for you to go and grab them. And I think most companies, that's as far as they ever get. In fact, I've been geeking out on the book, Crossing the Chasm right now. And there's the five different things. And the innovators are the first ones. And I think that's where most people's businesses get to the innovators. And that's where they stop, right? Mark: Right. Russell: Then the second phase is the early adopters. But these people aren't... The second phase, you have to learn how to create a customer. Again, when we first launched ClickFunnels, the internet marketers who knew what funnels were like, "sweet, I'm in." And they came in and they got ClickFunnels, the early adopters, right? But then, after that was done, we ran out... It was like being in a Ferrari on a dead end road. We ran out of road, and all of a sudden we're like, "Hey, we got all the internet marketers. Oh, crap, now what?" And it was like, okay, now we have to create customers. We have to change our messaging, create our front end price. They do things so that when someone comes, they don't come with the desire ahead of time, but they listen to the message, and all of a sudden it's like, "Oh, I need a funnel." If you look at, even strategically, the Dotcom Secrets book was to get the early adopters. People who understood funnels were. Here's my strategy of funnels. We got them in. And then Expert Secrets was like, "Hey, do you have talent? Do you have ideas or advice or things you can make money with? That you could share your advice." And people were like, "Oh yeah, I do." It's like, "Cool. Well, you need a funnel to be able to get that message out to the marketplace." And so we created customers from people, and that's kind of the second phase. And I don't think most people ever get to that where they're in the phase of creating customers. They're getting the low hanging fruit, the early adopters. And then that's the business. And they hit the ceiling and they never get past it. And it's realizing, the next phase is like, "Okay, how do I create customers? How do I create the desire so that they will come from where they are and come to the next phase." And I feel like, just from my standpoint, we just finished... We're kind of at the end of the early adopter phase. And we're now making the leap to the early majority, which for me, this is my big challenge, is crossing the chasm. We can talk about it later if we want it. But, that's the next phase that I'm in. And most people never... It's taken us six years to get the point where we're done with that phase and moving to across the chasm, which is scary and exciting. Mark: Well, that's kind of what I want to end on, actually. Russell: Oh cool. Mark: I want to interject really quick here. This is a very interesting Eugene Schwartz lesson that I think is quite apropos to what you're talking about. And you remember the audience awareness scale, right? Russell: Yes. Mark: So he's got two things in there. The audience sophistication scale and the audience awareness level. And the audience awareness level goes all the way from problem unaware. So, actually I should put yeah… So problem unaware. So imagine you got a guy who is living in the Aboriginal Bush and he doesn't even know that there is such a thing as phones. And you're like, "Hey, here's an iPhone." Well, he's not even aware that he has the problem, that he doesn't have a phone. And then you got guys who are problem aware, and then you got solution aware. And then it goes all the way up to most aware, which is like a guy who's like, "Hey, all you have to do is tell me that there's the new iPhone coming out." Russell: I'm in. Mark: And right, "I'm camping out. I'm going to be in front of the iPhone store for two weeks. So I can be first." So as Russell was changing, he was dealing with guys who were sort of solution aware, and sometimes even problem aware. But as he was expanding his marketplace, he had to kind of reach out to these other areas. But what you have to also understand is that, as you go across this whole spectrum, this area is almost always where the biggest money is, but it's the hardest market to talk to, because the messaging is so much more difficult. Russell: Language changed. Mark: Yeah. Russell: Each step in that... Because people are like, "Well, how do you shift it?" And like, "It's the words, it's the language." I remember Dean Graziosi called me one day. He's like, "This is the weirdest thing." He's like, "I'm at my wife's hairdresser, and the hairdresser was talking about this thing called ClickFunnels." And he calls me. He's like, "You've done something no one else has ever done, because my hairdresser's talking about your company right now." But it's like, if I walked in a hairdresser, "You want a funnel?" They're like, "For my hair? How does that work?" It's like, "No." We had to speak differently to those audiences. And as we go further out to different audiences, we change our language patterns because we have to speak to them in a way that they understand. And then we bridge the gap. Then we take them through a bridge that helps them understand like, "Oh, that means funnel. And this is why you need that thing." And that's part of the game. Mark: That's right. Russell: So much fun. Mark: Because they're not even going to know what a funnel is. Yeah, exactly, exactly. By the way, another really interesting book people could read. So sort of like a spiritual sequel to Breakthrough Advertising, was one written by some of the guys at high level in Agora, called Great Leads. And they talk about, yeah, it's actually a fantastic book and it shows you six different ways to talk about those different audience... To talk to those different audience awareness levels. Very, very good read for people. Okay, now, so this one is... So, I know I want to get into your thing that you talk about, about crossing the chasm. And I think that's a nice one to end on here. And actually, because I wrote it as your plan to reach the billion dollar level. And I think that's kind of the same question really. So, but before we get to that, I want to ask you what your three biggest personal lessons were in this journey, in this entrepreneurial journey. And you can even talk about some of your sports stuff too, because I know some of that applies. So what would you say those are? Russell: Man, I would say to begin with, is like, entrepreneurship... Building a business is the best personal development seminar you'll ever go to. All of your problems get shoved into your face and it gets bigger and bigger. It's like, "Ah." Mark: And you deal with it or you go broke. Russell: Oh, yeah, it's tough. But what's cool about business too, it's kind of like... I have a lot of friends who are having their first baby right now. And I remember our first babies came, and we've got five kids now, but when the first come you're so scared, you're like, "What am I going to do when the baby shows up?" You're freaking out. All of a sudden the baby comes out, and it sits there and it sleeps for 18 hours a day. You're like, "Oh, it's just sitting there." Like, "Okay, this isn't that bad." And then it starts growing and growing. And what's interesting is that your capacity to handle the baby grows as the baby grows. And so right now I've got my twins are 14 years old. And it's like, man, they stress us out. Teenagers are so much harder. Mark: Yeah. Russell: But it's like, if they would've came out at 14 year olds, it would've crushed us, we'd have been destroyed, because we weren't prepared. But our capacity to handle the problems grew as the kids grew. And I think, I look at like the stuff I deal with on a daily basis right now, six years ago, would have destroyed me. I'm so grateful that I had six years to grow in capacity to handle the stuff. It's ridiculous. But that's why business is so much fun too and it's exciting. So, what was the question again? Mark: Personal... The three biggest personal lessons that you've learned along the way. And again, this can be from your sports career, from your parenting and from your entrepreneurial journey, because I think they're all related. As you said, business is the best personal development seminar you could possibly attend. These things are not unrelated. They are all... It's all one life. And the things that I learned in the military, definitely applied to my life in business. And I'm sure things that you learned in the sporting world and in parenting, have also applied to business as well. So, it sounds like the first one is, is that you had to learn how to grow along with the challenges, because the challenges are not going to get easier. They're actually, by definition in life, going to get more difficult. And I think, let's just be really frank and blunt with everybody listening. Look, we all age people, we all age. That means that baked in to the formula for life itself is increasing difficulty, no matter what. And if you think you're going to insulate yourself in some bubble. Everybody has this, they get an entrepreneurial-ism and say, "Well, what's going to happen is, is I'm going to make a whole bunch of money, then I'm going to sit on a beach, sipping umbrella drinks, and all my problems are going to go away." Well, guess what's going to happen? You do that, and I tried there, here's what happened, I got fat, sick, and I became this horrible, disgusting person, that I was not proud of. And I was going to die if I carried on with that path. This is the way the universe is designed, guys, it's designed to continue to get more difficult and to challenge you more. Would you agree with that? Russell: A hundred percent. Unless... And some people nod because they cave, and they go and they sit and watch TV, and they just like, "Ah, I'm going to tap out." And they sedate themselves so they don't hear the voice, the calling, whatever it is, that's pulling you. Because I think all humans have that. I think it's inherent from our creator that there's this thing that pulls us to want to do more. And we want to contribute. And we have this thing. But, the majority of people, they try to sedate it. They sedate it with TV, with drugs- Mark: That's right. Russell: ... with alcohol, with pornography, whatever it is like to get that noise out. Because there's pain with that. Man, it is painful to walk out... And I'll tell a story that maybe this kind of ties into the second one. But, we were about a year into ClickFunnels and this is all of our first rodeo. It was Todd's first time building an app this big and all these things. And I remember when we first built it, he was like, "I'm pretty sure that the way I built it will handle about 10,000 customers." We thought maybe that'll take a couple of years. And within a year, we were 10,000 customers. And sure enough, about a year in, things started happening and the site would go down for half an hour. Then they get it back up. And then all these problems and all these things. And it was just so much stress. And I remember I got asked to speak in London, to talk about ClickFunnels. So my wife, my kids, my family, we fly to London. As soon as we land at the airport, I get out. I'm trying to get my phone connected and get a SIM card and whatever. As soon as it gets in, my phone is just on fire from... And it's all these people who I knew. And I thought they were my friends, but ClickFunnels went down, and they were not... Pitchforks were out and they were ready to kill me. And I'm like, I don't even know what's happening. And so I remember, I messaged Todd and I'm like, "What happened?" He's like, "We've been down for two hours." He's like, "We can't figure it out." He's like, "If we're able to recover from this, then..." I don't know, something, but I just remember him saying, "if". And I was like, "Wait, if?" It wasn't, "when", it was, "if". And I'm like, "Oh my gosh, I don't even know how to deal with this." Mark: I've been there, I've been there. Russell: We're in a car and we're dragging the kids to the hotel. And they're like all excited from London. And I'm stressing out. I don't even know what to do. And finally get to the hotel, and we're talking. And everything's still down, and I look at Facebook, and everyone's, literal death threats, it's crazy how crazy people get. And just blowing up everywhere. And all I wanted to do was... And I'm a Mormon, so there's not many things that we can do to sedate. Let's go get some ice cream, right? I don’t have anything! What do we do? I remember that moment, I was just like, I just want to hide. But I was like, I don't think that's the right... I don't know, I don't think it's the right thing. I think I need to talk about this. And I shouldn't act like it's okay, because it's not. It gets... So I decided... So I went to our Facebook group at the time. I think it's still archived in there, you probably find it. But I did this video from the hotel room and I was like, "ClickFunnels is down and it is not acceptable. And I am pissed at myself, I'm pissed at my team, were all pissed. This is not okay." And like, I just went out, "All my sites are down. I'm losing money, you're losing money. I understand it. It's not fair to you. It's not fair..." And I just owned it publicly, live streaming. And it was scary. I'm like, "I don't know what's going to happen. I'm going to keep you guys apprised. But we're doing everything we can. And it is not acceptable. And I am so sorry, and we're going to fix this." And I just led with that. And then got off Facebook Live and then probably balled my eyes out. Like, "I don't know if we're going to fix this." And luckily, I've got an amazing team back home and they're killing themselves. Mark: Awesome. Russell: It'll be a good chapter in the bootstrap book someday. But everything went on. But I think about eight hours and they got it back up. And I remember, after it got back up, then it got stable. And then we're just like, "Oh no, what's going to be the damage from this and the fallout." And I remember... We get graphs every day of how many people signed up, how many people leave, and all those kind of numbers. And man, during that thing, our number of cancellations, almost non noticeable. And I was just like, if we would have went the other way around and hid behind it, people wouldn't trust... Who knows what would have happened? And that was such a good learning moment for me. We can't hide behind stuff in today's world. We just have to come out front. And so that was a year in. And then luckily, from that point, we had some other good partners who came on, like Ryan Montgomery, who came and helped us stabilize things and figured out all these things. And it's been pretty stable since then. It's just those things that you learn, of don't hide, don't sedate. And I think in all aspects of life, that's a lesson. As soon as the company gets hard, man, your brain's going to be looking for a million different ways to say no. Or like, "I don't want to go that way." "No, no, no." And, man, everything good always comes from going to the eye of the storm and pushing through it. And even though the pain seems like, if I sedate or if I check out it's going to be good. But it's not a way to live life. Mark: So, dude, it's funny you say that. I was just shooting a video about exactly that, about how everybody is kind of opiating themselves these days, through the dopamine hits of social or whatever it is. Everybody's got their drug of choice now. Again, you named a lot of them, binge watching, pornography, actual hardcore drugs. There are so many people that are hooked on fentanyl and heroin combinations. And, it's a really ugly cocktail of what's going on. And I want to kind of interject and maybe pause it, what I think another third lesson is for you. I'm actually going to ask you a question. Were you raised in Mormonism or did you choose to convert? Russell: I was definitely raised in it, but I also had a very definite point where I chose it. There, at least for me, I think there's always a time when a storm comes and you got to decide what you really believe. Definitely had that. So yes, and yes. Mark: I want to say, I would just kind of hypothesize, that that played a huge role in your personal development, because you guys are not allowed to involve yourselves in any of those sedation methodologies. They encourage a very morally upright life. And I have to say, being a veteran of the military intelligence community, I actually got to know a lot of Mormons, because Mormons go out there and they get their language training as missionaries. So there are a lot of Mormons in the military intelligence community. And I got to say, almost all of the Mormons that I worked with were really solid dudes, who were just genuine, sincere people, who wanted to live their life correctly, and legitimately wanted to be kind to people. And I know you've got people like Bill Maher out there, saying all kinds of really nasty things about Mormonism, calling it a cult and stuff like that. But my experience with Mormons has been nothing but very positive. And it would seem to me that your choice to really, even though you were raised in it, to decide to take that on very seriously, must have also been very pivotal for you in your personal growth. Russell: A hundred percent. I did go on a mission for two years for the church, and I went when I was 19 years old, which is typically for most people, that's the time when you're in college, you're partying, you're drinking, you're thinking all about yourself, and you go out there on your mission, and you can't do anything for yourself. You get a name tag, where literally, I was Elder Brunson. My name is gone. I'm not even a... And you're out there everyday serving other people during, typically the most selfish time in someone's life. And for two years, that's the lens you look at things. So, when you come home... And I always tell people, "I'm so grateful I made money after mission." Because, who knows what would happen? Both of us have friends that made a lot of money really young and it destroyed them. And so it's like... Mark: Oh yeah, definitely. Russell: Just super grateful that I had that lens to just... The lens of learning how to serve people before yourself, which is... Unfortunately, most people don't have that opportunity. And on a mission, you're kind of forced into it, and you learn to love it. Mark: It's funny for me. I went through... Even though my family was Catholic, I was kind of raised around atheist/agnostics. And I became, sort of what I would call now, a pantheistic spiritualist. But over time, I've become more and more rigid in that. I've explored all of the different world's religions. And the one thing... And I haven't decided yet, if I'm going to settle in any location. I still need to listen to your Mormon apologetics video that you made. I'm super curious about that. I need to make a point of hearing it, because I'm, open to it. I'm open to it. And when I see people who are living a life that represents genuine service for other people. I don't know if you ever heard of this guy, Father Gregory, who has this thing called The Homeboys' Bakery. And basically what he does, he takes these kids who were, they were in prison, and he gives them jobs at a bakery, and then helps teach them how to be decent people. And I saw that and man, I can't help but get choked up when you hear about something like that, man. Because when you see somebody living their life that way, and when you know what the cost of living your life the other way is, it makes you really take those kinds of things seriously. And even though religion gets a bad rap because, yeah, there's a lot of crazy stuff happening in organized religion, the notion that sin, however you want to label that, destroys your life, is an observable phenomenon, man. You can see it. When you do all the things that you're, "not supposed to do", and all of the religions of the world tell you not to do a lot of the same things. And when you see what happens to people who live their life that way, and they think they can get away with it. And then you see what happens to people who live their... And I'm talking about people who were the week, "Oh, I'm trying to be a nice guy as a way to manipulate people." That's a bullshit thing that some people do, right. I'm talking about guys who are like, "Hey, I'm going to make myself a strong person, and I'm going to do good in the world." When I see people like that, I'm like, "That is the path that we all need to be walking down." And the more of us do that, the better the world's going to be. Russell: Yeah, I had someone recently tell me... Learn about my beliefs and stuff and just be like, "Man, that must be really, really hard." And then at the same time, I looked at their life. And I was like, looking at the path that they've gone on, and not to judge them all. But I'm like, that seems so much harder. Mark: Yeah. Russell: I don't know. Maybe, but, I'm grateful for the path and I'm going to stay on it. Mark: Good for you, man, good for you, dude. I'm blessed to see your example, because you're yet another person I can look at it and say, "Hey, here's a guy..." And your life is harder than mine, man. Your company is doing way more volume than mine right now. You have kids to manage, you do all these extra things on top of it. And I'm like, "Man, I want to learn how Russell is managing all of this stuff." You know what I mean? Because you're younger than I am, but you figured some things out that I haven't figured out. I want to learn that. And I'm a moron if I don't learn it, right. This is where the ego less ness has to come in. If you want to be better and better and better, if you want to truly achieve greatness, you got to be really straight with yourself about what you can and can't do. So let's kind of tie this up now with this crossing the chasm thing, man. Russell: Yeah. Mark: I don't know if this is something that could be covered briefly. Because I imagine it's going to be a pretty complex thing, but what can you say about that? Russell: Yeah. And I'll tell you some of my thoughts. I don't know all the answers yet. We're on that journey right now. Mark: Yeah, good answer. Russell: And it's fun though. Because for me, it's been interesting as I've gone on this journey too, and maybe this ties back to the last question as well, but, and I'll tie it back to sports. When I was wrestling for a long time, it was me, I was the all-star. I was out there wrestling, it was my thing, I got my hand raised. I loved it. And now that I'm older and I've got kids now, my kids wrestle. And the transition from all-star to coach is really painful. Because it's like, "I want to be on the mat." Like, "Ah, they're doing things wrong." And like at first it's really painful. And then eventually, for me, my kids, this is my twins third year wrestling. And this year was so rewarding, because the stuff we've been working on, they're finally getting it. And to see them get their hand raised, actually felt better than my own hand raise, which is weird, because I was like, it's been the greatest moment of my life, is getting my own hand raised. And with business was similar, because the first two years of ClickFunnels, I was the all-star. People were like, "How big was your funnel building team?" It was me. I built the funnels, I wrote the sales presentations... Todd was doing the software, I was doing everything else. And I was the all-star. I'm doing the webinars, I'm flying around the world, I'm speaking, I'm doing stuff, my hand's getting raised over and over and over again. And as we started growing, it started getting harder and harder for me to handle that. And I remember three years ago, it was this spot where it's just like the pressure so much. I was just at a breaking point. I'm like, "I don't know what to do." I remember where I was at. It was some other conversation, but the thought that popped in my head was like, "You have to transition from being the all-star to being the coach. At the time, I had hired a couple people and they would go, they'd write copy for me or they'd build the funnel for me. And they'd do it. And I felt like it was like Michael Jordan. There are people that go up to shoot a shot, and he's like, "I shoot better” and grab it and just dunk on them, right. I felt like I was doing that. My team would come in, they'd get some like, "Oh this sucks." I'd go in and delete it all and rewrite it and fix it all. And like, "Oh I'm an all-star, look how good I am." And it was holding me back and them back and everything. And I was like, I have to make this transition to being the coach. So that was the whole second phase was, at first, it's hard. But now I'm looking at my team, now my team is getting so good. They're producing stuff and they're creating without me. And it's like they say to me, now they want something. I'm like that like, "Ah." Same thing, it feels better getting your hand raised when your team is doing it now. It's interesting. Mark: Well, you got a great model, really quick, I just want to interject, from wrestling. Dan Gable was kind of seen as the greatest wrestler of all time. And then he was... Now he's kind of universally recognized as the greatest coach of all time as well, across all sports. Right? Russell: Yeah. Mark: There are very few people who would deny that Dan Gable is the best coach of any sport, of all time. Russell: Think about how many people, making the jump from that, how many great athletes never become coaches? And I think a lot of it is the ego, right? It's been really hard for me, both coaching my kids and then coaching the team. There's this ego thing. You're like, "I can do it better." Or whatever. And it's so hard. And so anyone that can make that transition from all-star to coach, I have so much respect for them, because it takes a lot. Mark: Ego is tricky man, because the ego battle is probably the... That's the battle, right? Because the ego kind of drives you. That pride drives you so much in the beginning. Russell: It's the fuel, initially. It's the reason why I want your hand raised. The ego's the driving force, initially. And then it becomes the thing, that holds you back in the next phase. Like, "What?" Like, "You were such a great friend over here, now you're screwing me over." Mark: What just happened. Well, this is the genius of the design of the universe, right? It's like every time we think we've got to figured out, it's like, "nope, you don't." Because, whatever designed this, whatever your cosmology of the universe is, call it God or whatever, is infinitely smarter than you are. And it's going to come up with so many ways to trick you and keep you off balance, that every time you think you got it dialed in, there's going to be a new challenge that's going to come up. And you have to love that. It's kind of beautiful. Right? Russell: Oh, yeah. Mark: Because that's what keeps life interesting. It would be so dull without it. Russell: Yeah, it's so much fun.

As some freedom returns to society following COVID-19, don’t miss out on potential opportunities to implement property management growth strategies. Today’s guests are Mark and Anne Lackey from HireSmart Virtual Assistants (VAs). Mark and Anne are broker-owners that manage almost 200 doors in Atlanta. You’ll Learn... [03:47] Trends: Property management pivots and changes during economic downturns. [07:10] Hire Virtually: Save money, get better employees, and increase productivity. [08:22] Wake Up: Don’t resist remote work; realize office space may be unnecessary. [11:14] DIY vs. Professionally Managed: Ramp up sales/funnels to serve customers. [15:26] Problems are always opportunities to grow business by offering solutions. [21:11] Customer Service: Don’t disconnect. Focus/follow up for retention/satisfaction. [27:02] Professionalism: Set expectations. Don’t badmouth landlords via vendors. [28:29] BDM: Do you need a business development manager? [31:33] Time, Energy, and Effort: Resources required to rent properties to tenants. {32:28] Referrals grow businesses. No referrals represents customer care problem. [35:29] Gamechanger: Save time and money to get things done or do more yourself?. [38:30] Wrong Person, Role, Tool, Time, and Money: Hire based on owner’s needs. [40:57] Off-the-Shelf vs. Customization: How to hire and build teams takes time. [46:50] Remote Challenges: Communication, operations, and management problems. [48:22] Key Performance Indicators (KPIs): Get work done based on expectations. [50:15] Think, Invest, HireSmart: Know avatar to grow property management business. Tweetables Opportunities are available to make sales and buy, manage, and invest in more properties. You don’t have to have your employees in an office. You don’t even have to have an office anymore. Property managers are immune to guilt and the heroes of the rental industry. Referrals grow businesses. No referrals represent customer care problems. Resources HireSmart Virtual Assistants (VAs) DGS 69: HireSmart Virtual Assistants with Anne Lackey NARPM Lehman Brothers Airbnb DoorGrow on YouTube DoorGrowClub DoorGrowLive Transcript Jason: Welcome, DoorGrow Hackers, to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. My guests today are Mark and Anne Lackey from HireSmart. Welcome you two. Anne: Hey, good to see you. It's been a while. Mark: Hey, it's good to see you. Jason: It's good to have you back. I noticed you're displaying that beautiful logo in the background. Mark: Isn't that wonderful? Anne: Yes, that is of course a DoorGrow special. They helped us with that on our website. Mark: The logo, the renaming, all of that was a DoorGrow impression that was right for us and is great for our clients. Jason: Yeah, I like it. Cool. We're going to be talking about property management growth strategies after COVID-19. This Coronavirus is just starting to clean itself up. I just rode a road trip from Pennsylvania to Austin over the course of multiple days. People were not wearing masks anymore. We were eating at restaurants. It was awesome. It was like we are back to having freedom again. Most places are open here in Austin. I went to the hardware store yesterday, though. Everyone was wearing masks and I felt like I was in trouble. I thought we were over this already, but apparently not at Home Depot. Anne: Some places are, some places aren’t. Jason: I think the national chains and the national stores have to accommodate the lowest common denominator nationally. They got rules in place for everything. What are we chatting about today? Anne: First of all, I want to make sure everybody understands we are broker-owners ourselves. We manage doors in Atlanta. Mike: Nearly 200 doors in Atlanta since 2005 for other people and for ourselves, since 2001. Anne: We've been talking a lot to our friends who are in the property management business. We are, of course, NARPM members, affiliates, and affinity partners with them. We hear a lot around the nation of different things. Just like your trip from Pennsylvania. You saw different parts of the country where things were more open than others, so we want to talk about a couple of different things as we see them. For property managers that are thinking what's the next thing. I want to back up just a little bit and talk a little bit about historical trends and changes. Mark, why don't you get us started on that? Mark: This will show my age. That's one thing if I've mentioned this. In the 70s, we had lines to get gas. Not everybody out there remembers that, but there was an oil shortage. There was a gas shortage and at that point, everybody said we're going to run out of oil in a couple of years. It was a crisis, so out of that came what? We got into solar energy, more on to hydroelectric. Things pivoted, things changed. In the 80s, the savings and loans went down. Things pivoted on how we got mortgages. The dot-com buzz, the 90s, the tech blow up. All those things and what most everybody remembers is the meltdown that we had in the economy and mortgage market that occurred just 10–12 years ago. At that point, it required pivoting and Anne and I are really good at our business about looking to see what the trends are going to be. What's going to change and how to pivot. That's what we want to talk about today. It's not the end of the world like everybody said, March 15th or whatever date it was when everybody went to hibernation. It's like, it's the end of the world. Anne: Nobody's going to pay their rent. Mark: We thought that 12 years ago when Lehman Brothers shut their doors. It all seems like it's the end of the world, but it's not. It's an opportunity. It's learning to pivot. Look at where the puck is going. Anne: We wanted to talk about some of the trends that we see and the opportunities that property managers should be looking at in their business. You obviously don't hop on every trend and everything that comes along, but it is always good to put it in perspective. Mark, let's talk about some of the trends that we've seen in real estate in general. We're going to talk about how you can take advantage of that. Mark: In the last few months, we had property managers and friends that were investors that had Airbnb. They were making 5–10 times the amount of rent I was off of a property. Suddenly, they made nothing because all the bookings shut down. They’re looking. A lot of them said hey, let's sell. Let's go long term. A lot of things changed there. Through them and through those changes of people not having as much disposable income at this point because there's a slow down in jobs, second homes aren’t popular right now. Two, with all the laws that are coming about with the changes to protect the renters that are coming out of state legislators and the national, there's a lot of change and as property managers, we keep apprise to that. But these DIY (do-it-yourself) landlords don't. So, we're going to talk about some opportunities to make sales, to get some additional properties, to manage some opportunities for investing, too, if you're into that area. Jason: When COVID hit and it was March, March was brutal for us at DoorGrow. Sales stopped. Every property manager just tightens their purse strings, freaking out, there's this cash crunch. We experienced a serious cash crunch so we had to get lean. I think a lot of businesses had to get lean and in the long run, that is a really healthy thing for business. Everyone was trimming the fat and [...] was effective. Anne: We saw that in HireSmart because now everybody is a virtual employee. This is a perfect time to write stuff. People that have been hesitant to hire virtually have been in our doors now because they are like, wow, we can save some money. We can have better employees. We can have different strategies and approaches. Now, it was no longer important because it wasn't allowed to have people come into the office. Actually for us on HireSmart, it actually expanded our business. Mark: There was resistance before from property managers that wanted to walk down the hall and lean over Joe or Joan's shoulder and see what they’re doing, see what they're working on—literally, not figuratively—to be there, to have that conversation face-to-face. They were very hesitant about working and they didn't have the resources to figure out how to work remotely. With what’s come out of COVID-19 has become the realization that you don't have to have your employees at an office. You don't even have an office anymore. Jason: I've known this for well over a decade. Interesting to see that mass transition of people realizing they can use tools like Zoom and move away from having somebody right there in their office. I did some polls online asking people during this. I asked how many people would renew their business lease at the end of the term and a lot of them said they're going to, at the very least, downsize, maybe to a smaller office base, or they may even not renew. I also did some polling on what people have noticed as a result of people working from home. Some of my clients were saying that they've noticed that they were surprised that their team members became more productive. They're getting more done. I guess because there are fewer interruptions they were saying. There are fewer distractions. Maybe they're more comfortable. But some of my team members are doing better. I have heard some people say I hate it. My kids are there all the time. I'm going crazy. But in general, I think the world has to wake up and realize when you have to get work done, you can try this. Then they tried this and they're like, hey, this works. Why are we spending so much money on this brick and mortar location that is outrageously expensive to have all these people in it when we can eliminate that crazy expense and it's unnecessary. Mike: Yeah. It was shocking, like you, we immediately drew into our shell in March, and let's save. We don't know what's going to happen. People are going to let people go. But in April and May, we had the most requests for information about our services. The most orders we've had in five years. Jason: I'll bet. Anne: Without any [...]. That's the funny part for us [...] Mike: We’re not traveling. Anne: It's been interesting and we do a lot of community teaching and speaking even online. We always have to help people understand what opportunities are there. A lot of things that we're promoting or that we're seeing right now, specifically in property management, is now’s a great time to ramp up your sales and funnels. Again, because the DIY's are so lost. We already know that there are so many DIY landlords compared to professionally managed. Mike: Eighty percent of the US are do-it-yourself landlords. That's a lot of opportunity. Anne: That's a lot of opportunity. I know you talk a lot about that, but how do you reach them? How do you engage with them? How do you attract them? Of course, they outgrow a platform, obviously, as a key component to that, which is wonderful, but you have to have the human-to-human or human automation to back it up. I think where we're coming to as a society is if you don't have a physical office where people can walk in anymore because you're closing your doors. We've had a closed-door policy for 19 years. I think people are very surprised that we've never let anybody in our office ever. Mike: We have a small office of three. Anne: We've never let anybody in our office even when we had seven people in our office, we didn't have people in our office because it's a distraction, that interruption. What happens is you need to serve your customers. You need to be talking to them. You need to be serving them. Now, the residents and owners don't just want to be served 9–5. We're seeing that they want answers seven o'clock at night, eight o'clock at night when they're online. When they have questions they would like to have some interactions with someone from your office. How do you do that cost-effectively? Of course, we have the solution. A full-time dedicated virtual employee that works as the second shift or the split shift is there to take care of chat. They're there to answer the questions and help people guide them on applications. Mike: Then guide the people that are coming in to bring you properties to manage. Anne: Right, and to talk to owners about how I work with you. Because here's what's going on in the marketplace. Again, in a lot of places, you do have people that aren't able to pay their rent right now because they have lost their jobs. Do you have owners that are concerned about what I do? How do I do this? We've had an increase in our inquiries for property management recently as well because they just don't know the rules. They don't know the laws. Mike: It's not the time to withdraw. We're all sheltered in our business in place, too, and when we withdrew that opportunity to find new business went away. The companies, the far-sighted future thunking property managers, business owners, and the brokers that are now looking at making some investments. Not just sitting on their dollars, but actually making some investments in the right people, the right tools, business development people to help grow the business, doing outreaches. One thing we were talking about just the other day was—we haven't done this yet—we should have a seminar that we invite all the DIY landlords to share with them all the fears of all the new laws that have come out. [...]. We have that seminar and some of them are going to come out and say, okay, now I can do things differently because I have information on what I can and can't do. A lot of them are going to come out and say I just can't do this anymore. I'm tired of doing it. I'm going to hire—in case—us because we've been in that seminar. Making those types of investments, and granted that those seminars aren't always live, they're maybe at this point virtual but reaching out to those. Those are the ways now to grow your business for tomorrow because over the next six months until we get to the end of this year, there's opportunity abound for forward-thinking. Jason: That's what problems do. Problems are always opportunities. Let's talk about the problem. Here are some of the things I noticed. I won't say who it is, but I got a call from one of my business coaches and he has rental properties. He was like, what do you see in the market place right now because I got a small portfolio of properties and only 50% of them are paying rent. I said at least 98% of most of the rent is being collected by my clients. That's what I'm hearing. Also, what I noticed happening is my clients are saying that their owners were calling them and saying if tenants don't want to pay rent this month, we'll let them not pay rent. They're like no, they're going to pay rent. The thing is people felt guilty. They're almost ashamed but feel guilty, but property managers, you guys are over that [...]. You guys are completely over. You've heard all the excuses. You've heard all the stories. Some residents right now, due to the unemployment benefits and stuff that are going around, are making more money, especially the low rent markets. They're making more money than when they were working. But some of them are still trying to use the excuse that they need to not pay rent or whatever. The news kind of made it look like that. It made it look like people trying to collect rent are evil, bad, sick, or wrong. A lot of homeowners are just feeling guilty. Property managers are immune to guilt. Anne: That's because we've heard it all. Jason: We've heard it all. We heard all the stories, the excuses. You know how to help people. You know what programs are available because you guys are on top of this stuff. You guys aren't having trouble collecting the rent. In general, I haven't heard anyone in the single-family residential space or even multi-family having real trouble collecting rent. Rents have gone down just a little bit. You got people that most would have heard it's the same people that we're always troubled paying rent. We just couldn't evict them, but that's coming. Mike: Your coach needs to reach out to a professional manager. You see that, but he doesn't. Seminars, webinars, something. Jason: They don’t see the problem. That's the challenge I've always experienced in DoorGrow. I'm selling a solution to a problem that most people can't see. They can't see the leaks on their website. They can't see the challenges that their branding is hurting word of mouth. I have to educate people to see the problem. The same thing is what you're talking about. If you can create the gap and show the contrast between what challenges and problems they're dealing with and what they could be experiencing, what successes your clients are having, they're going to see this gap and that gap is what creates pain. People want to solve pain. People want a pain killer, not a vitamin. People will pay even more money to get out of pain. They want a solution, but they don't know a lot of them that there's a solution out there. I do think there is a massive opportunity. There's no scarcity in property management. There's no shortage of people that are in pain or have problems or challenges they are dealing with. Not only that, but I think property managers can hold their heads up high because good property managers, I really do believe as I said before, can change the world. There are millions of renters. Even here on my own property, I'm renting (I just moved to Austin), my kids were without a water heater for two weeks. The landlord sent out two different plumbers because he didn't like the feedback that the 13-year-old water heater should be replaced even though the pilot kept going out. I didn't even know my kids were taking cold showers because they got it before me and they can't get on Xbox until they take their showers, so they 're just doing it. All they're thinking about is can I get on the Xbox now? I'm like, yes, go ahead. But then my daughter's like, I haven't taken a shower in four days because the shower's freezing. I didn't know this and the younger ones, I went to them. That doesn't make sense because they've been taking their baths and their showers. I went to my son, Hudson, and I'm like, how's the shower been lately? He's like, cold. I'm like, what? Why didn't you tell me? Mike: It’s virtually a summer, right? Jason: Then I said to my daughter, she likes taking baths, you've been taking baths? She's like, Yeah. How are your baths been? She's like, they're really cold. I'm like, what? But you guys protect families. You guys also protect owners. You guys are like the middle person that makes everything okay and you take care of people. It lowers the pressure and noise. Property managers even do things like increasing the number of pets that families are able to have because you guys recognize that usually, it’s the kids that are causing more damage than the animals. [...] to get more rent because of pets. There are so many benefits to property management that positively impact families, homes, and lives. You guys are really the heroes of the rental industry. Property managers are the heroes of the rental industry. Mike: And unlike your property manager there that evidently has trouble with customer service. Jason: He's not the property manager, technically. He's just a landlord who doesn't want to do anything. Anne: You got a DIYer. Mike: Yeah, a DIYer. Anne: Sounds like a great lead. Mike: But that gets into the consideration of customer service. As property managers, we worried over the years about customer service to our owners but we haven't worried as much about customer service to our tenants. For retention and to continue to have tenants that want to refer people in, raising your level of customer service at this time specifically because I know I ordered something that didn't come and it was then delivered to Valentine, Nebraska instead of here where I am in Georgia, so I sent a response online and I got an auto-reply that says call this number. I call the number and it says we're too busy. We're not answering phones now. Just send an email. Customer service has failed specifically right now. Anne: I'll actually tell you something that we did on our property manager which I think has really impacted our renewals and we are getting increases in rent even now. Mike: On everyone. Anne: Let's just talk about it. Again, people pay for when they feel taken care of. One of the biggest gaps that we saw, this is probably two years ago, in our business was exactly what you're talking about. Tenant isn't taken care of, it's taking too long, the contractor is giving all kinds of excuses as to why they can't get there, tenant's going here, contractors going here. There's this big disconnect. Our virtual employee, Bonnie, is charged literally with every day every work order that comes in, she's calling the vendor and saying vendor, did you get it? Because we want to make sure it didn't get— Mike: Lost. You know how emails are. Anne: That's the first thing. Then the next day, she's calling the resident and saying resident, we assigned your work order to contractor B. Have you heard from him? Well, no. What happened? Jason: That's better than being ghosted and then eventually not having your calls answered, then eventually maybe getting a text or response half a week later. Anne: She says okay, you haven't heard from contractor B. Here's contractor B's information. We have already approved them to go out. Then she calls contractor B and she says contractor B, I heard that you haven't connected. Why haven't you connected? Oh, they haven't returned my call. Okay, I just got off the phone with them. They are available. Call them and they are expecting your call. She closes that loop, that hand-off because we assume contractor B is doing his job and we assume tenants are never wrong, they never change their phone numbers or anything else. Mike: Then the contractor goes out like he did to you and assesses the work. Many times there's not a follow-up, so what does Bonnie do then? Anne: Bonnie, as soon as she gets the date it was supposed to be scheduled from either the tenant or the contractor B, she follows up the next day and says my understanding is that contractor B was supposed to be there yesterday. Did they show up? Mike: Jason, did they take care of the water heater for you. Anne: Are you satisfied with the repair. Mike: And Jason says no. Anne: No, I still have… Now, we have another feedback loop. This is a maintenance process that we never could have done without having a virtual employee do this. It's too time-intensive and we have other work to be done. Mike: Then the flag goes up to tell the owner, owner, you got to provide hot water. You want an ACH or do you want us to loan you the money at an 18% rate? Anne: Yeah, put it on a credit card, however you want to do it. The reality for us is our tenant satisfaction has gone through the roof because we showed that we care, we're not letting it go, and literally, I as the broker get the list of not only what the outstanding work orders but where they are in the process and what she's done to move it forward. If we have a resident that we haven't been able to get in touch with, the contractor hasn't been able to, we have an escalation process. I don't manage, Bonnie manages. Again, total game-changer. Mike: The benefit out of all of that, we don't get pushed back when we're raising the rent. We started with our process in the middle of March. We do it in the middle of every month with notification of our rent increases and property. Most property managers that we know said you're crazy. We're either going to hold it. We'll tell them they don't have to pay an increase. We went out there and we got resistance from one tenant over the last, March, April, May, June. We got four months into our belt of increases and we have one pushback. Anne: Of course when you have rent increases, that increases our profitability, too. The owner makes a little bit more money, we make a little bit more money. It's still very reasonable. One of the things I'll say about rental rates is we don't do it arbitrarily. We do a full competitive market analysis. We make sure it's on the market. We don't raise all the way up to market if it's a significant jump, we'll do it at the average appreciation rate. Mike: We want to stay just below the top of the market. Anne: Correct because we don't want to give them a reason to leave. Mike: But we got happy tenants that don't want to leave. They go oh, I can't rent down the street for what I'm paying here because we always stay right below that. Jason: There's another hidden killer, too, I noticed in the scenario because when these vendors came to my property here and talked to me, they were basically bad-mouthing the landlord. They were like this guy is cheap. I've told them he needs to do this. In your scenario, the vendor is going to feel like they are getting taken care of. They are going to feel like they are on your team and on your side, and they are working with you, whereas these vendors feel more loyalty to me because they know the landlord isn't' doing the right thing. Anne: That goes back to having a contract with our contractor of standards of professionalism. Our vendors actually sign a document that says these are our expectations to be a vendor for us, and one of them is to not bad mouth as part of that. Mike: All these things combined, give us opportunities to shine. We get referrals every week. People come to us and say we hear great things about you as a property manager, and we're forward-thinking. We have opportunities there where we reach out to try to bring in business. Like what we're talking about earlier, a lot of the property managers are just sitting back. They are scared. They are afraid to do anything. That's the wrong thing to do. Anne: A lot of them are looking to bring on a BDM. Remember last year was the year of the BDM. Do you need a business development manager? Okay, maybe you do, maybe you don't. We tend to be our own. Mike: We are our BDMs. Anne: But again, we are high salary people like if you are paying somebody. Our time is very valuable, but we are seeing the smart property managers are supporting that sales effort through follow-up with the virtual employee, a virtual assistant that is literally a full-time doing this grinder follow-ups because we all know in sales—I don't care what industry you're in—you have to reach out seven, eight, ten times. Sometimes, property management specifically, it's pain point-related and some of the pain points only come up once a month. Some of the pain points come up once a year. Some of the pain points only come up periodically, so if you don't have a system to reach out to them, again it can't just be an email anymore. I think people are tired of tech, tech, tech. You need to have tech. You need to have a chatbox on your thing that's manned by a live person, in my opinion, but you also need that human-to-human automation. You need somebody that actually shows that they care a little bit about not only your company but the people involved. Having that sales support, a virtual employee to do that, really allows your BDM to be their most successful self and to do the things that they like to do. People don't realize that. BDMs don't want to do a whole lot of phone calling. They want to be in relationship management. If you can get them in front of the customer more times, if you can keep prospects warm and in the hopper so that when the prospect is ripe and ready, and your BDM can come and close, you are maximizing your ROI for that person. Mark: Yeah. They actually go to our website and ask for some of our tools or some of our information. It auto delivers but then they get a phone call, I want to make sure you got 21 questions or our technical information, and when they get that phone call, they're shocked. Anne: I'll tell you one other thing where people are going to have some issues. We all know about the Zillow. Zillow and they're charging for leads. That’s always been a hot topic. Zillow is rerouting leads. They're rerouting them to their call center in some areas, not to all areas, but into some. You don't have somebody actually calling those leads proactively when you get the email because even if you syndicate them, specifically if you syndicate them, you still get the email that says so and so is interested and they give you the phone number. But if the person proactively calls, Zillow is going to try to give them to people that are paying them, not necessarily to those of us who are syndications. If we're not actually outbound calling those leads as they come in, we are missing opportunities for tenants. This has been a big change probably in the last three weeks. This is fresh information that again if you don't have somebody in your office that has the time, energy, and effort to be calling in addition to responding back via email, you are missing an opportunity to get your properties rented. Again, we have literally five properties come on the market on June 5th, all but one are occupied now. That's how quick we are to get these things done because we have a dedicated resource and our virtual assistant. Literally, that is her only job to focus on. Jason: I want to touch on a couple of things you mentioned that you threw out that I think are important. One, you were talking about referrals. This is one of the number one ways to grow any business generally. I talked to a client I think yesterday, I was coaching a client and they were like our business is so great. We’re great. We got all this process dialed in and they said, but we're not getting any referrals. If a business is not getting any referrals, it's probably not as great as you think it is. Property managers have blind spots. We all do. For those listening, if you're not getting referrals, you got some customer care problems that are likely going on. You should be getting referrals. You should be getting referrals from your vendors. You should be getting referrals from your real estate friends. You should be getting referrals from your property management clients. You should be getting, maybe referrals from some of the vendors, but people should be talking about you. If they're not, there's some sort of blind spot that needs to be shored up. The other thing you mentioned (I think) is really smart. A lot of people, yes, they're like, I need a BDM. I need somebody to do sales, but they can't afford it. A lot of people can't just go out and afford to get some high-grade wonderful salesperson. But most business owners are not willing to also acknowledge that they are a part-time shitty salesperson. The time they're willing to dedicate or have sometimes is maybe an hour or two a day. That’s part-time. it's 10, maybe 15 hours a week, maybe they can dedicate up to 20 hours, but if you really want to grow and scale your business, there probably needs to be a little bit more time or you need just business being referred to you all the time, so it's super easy. One of the easiest hacks I implemented when I was a solopreneur and was doing all the sales, the web design, branding stuff, and everything myself, I got an assistant. I had that person operate as a sales assistant and an appointment setter. It immediately multiplied, not just doubled probably, but it multiplied my capacity to close deals. All I did was show up for appointments. I just met with people and sold. I wasn't doing any of the follow-ups. I was a solopreneur and my assistant was calling—she had a British accent—and saying hello, this is Helen, the assistant to the CEO Jason Hull of DoorGrow. He was wanting to get back together with you. It also set me in the mind of the prospect as something higher than maybe I actually looked like at the time being a solopreneur, sitting at home, trying to work in my living room. There's power in having a team. A lot of people say I can't afford to hire anybody. Maybe you just need somebody to start, just somebody that you can start with and they could be full-time or part-time, but they can start doing a piece of that thing that you need help with. They don't have to be able to do everything. Maybe it's the piece that you least enjoy. Maybe doing the follow-up, the cold calls, and whatnot. Anne: That's the great thing about virtual assistants and personal employees. You're looking at less than $20,000 a year for full-time dedicated help. That's a game-changer. You can't afford not to do that. I think that that's where people get sideways. Where we really help our clients in helping them define their staffing needs, and what's the best ROI for them to bring on board first. We’re talking about trends and the things that we see, but that's one of the services that we provide, helping them figure that out because sometimes it's like you said, sometimes this is a generalist. Somebody that can do a little bit of everything. Sometimes it's a sales support person. I know I need leads. Sometimes it’s accounting, sometimes it's leasing line, sometimes it's in marketing. A virtual assistant through HireSmart, because we're full-time, dedicated, and we specifically recruit for our clients. We don't have a room full of VAs that we go, here you go. I actually go and curate the contacts for you, and then I personally work with them for 40 hours afterward like that one-week job interview to make sure that they're amazing. Anybody that has hired and day two you're like, ugh, they just aren’t amazing. I take care of that for the clients. Mark: It frees up so much time. If it frees up 10 hours a week, how many deals can you close, how many new properties can you bring on in 10 hours? You invest maybe two hours where somebody else is making all the calls, set the appointments, you got that two hours invested. Your return on that is tremendous because you're going to make an offer that’s equivalent to $100, $200, $300 an hour for your investment of time. It goes back to, you've got to make those investments. You can't not hire now, you can't put your head in the sand or pull back in your shell and say, I'm going to do it myself. Especially if you're not happy doing it because if you're not happy, you're not going to get it done. Jason: Therefore, a lot of people that have been shifting to doing more themselves. I have to lay off team members now, I'm doing everything myself. Now I'm doing stuff that I don't even want to do. Let's touch on one thing that you just mentioned. I think this is really important for everybody listening to understand. I've seen this in hundreds of property management businesses and businesses in general, but one of the most painful or dangerous things I think a business owner can do is hiring the wrong person, the wrong role, spending the wrong money at the wrong time. A lot of people hire based on what they think the business needs instead of what they need in order to create more space and eliminate the number one bottleneck in the company, which is you the business owner, it's the entrepreneur. You taking the time to figure out what they actually need to get the best ROI is huge for them because they've seen lots of people, they hire the wrong person they didn't need. Now they're spending this money, or they just hired a bad person in general which not just cost them the money they spent on that person and the time they spent to get that person, but they're now losing money in secret places. I've had team members that stole from me. I've had team members that stole time. I've had team members delete and stuff after I fired them. These are problems that entrepreneurs learn painfully over time trying to build a team. A lot of property managers are in that first trap. They're the 50–60 door mark, they don't know how they can afford to hire that first person, and this is a solution for that. This is a very obvious solution for that. You can help them figure out who they really need right now and to take the next step forward, because if they spend the money on the right person, they make more money. It makes it easier. They then can reinvest. If they spend it on the wrong person, or the wrong tool, at the wrong time, it could be the right tool but it's at the right time, or they're getting software prematurely that they didn't really have to have at that point, or whatever it might be. If you spend money at the wrong time even though it might be the right tool for the future, you're hurting your ability to get to that future. Anne: I totally agree with that. Jason: Cash flow. If you run out of cash flow, the business dies. It’s like the Indiana Jones boulder rolling after you is the cash monster trying to get to you. If the boulder catches you, the business is game over. You’ve run out of money, run out of cash, you're dead. People started to feel that in March. You have to always be outpacing that boulder. If you spend, the boulder gets bigger and faster, but you can get faster if you spend it on the right people. Anne: One of the things I tell a lot of prospects that I'm talking to is most property managers (specifically) were never trained on how to hire or how to build teams. That’s not something we learn at school, it's only by trial and fire. A lot of property managers have fallen into it. Mark: There's not a hiring 301 class in college. Anne: One of the things that I tell them is, just like you're the expert in finding the right tenant for an owner because you've seen enough applications, you've gone through the process, you've done all that, you are the expert there, we’re the experts in hiring. I know I have a profile for hiring, I know what's successful, I know what's not successful. I save my clients from hundreds of hiring mistakes because it's not that they can't do it, a DIY landlord can do it, but they can't do it as well as a property manager. I say the same thing. You can hire. It’s going to take you more time, you don't have a process, you don't do it enough, I have done thousands. Just in the last six months alone, I have evaluated over 9000 applications. You say that gave me some data points. Jason: You know the BS, you know how to spot the scammers, you know which people are gaming the system, you know which people are feeding you a story, you know what questions need to be asked. In the Philippines, you got to ask about their internet connection. You got to, you can't just trust that they have one. You got to ask about where they're working. Where are you working at? Where are you working from? That was part of the thing that I really enjoyed working with you guys. I always look at everything through a certain filter, and I'm skeptical, and I want to see how I can help people. As I went through your process, I'm like, they do this. They already do this. This is stuff I've learned over a decade in my own painful experiences hiring in India, Bangladesh, Russia, the Philippines, Bolivia, and of course the US, which ultimately most of my team are in the US now. But I have Filipino team members. I can personally vouch for your hiring process making a lot of sense. It’s solid and it works really because it's very similar to my own. There are so many similarities. Okay, they've got this down, but you have some advantages. We talked about this in the previous episode. You guys should go listen to that where we talked about their processes and some stuff they do, but you have vetting, background checks, and stuff that people don't just have access to if they're just trying to DIY this. Mark: It’s like the difference, if you're getting married, you got the bride and the groom, and the bride wants a custom-made dress, not one off the rack. The groom really wants a tux that fits them. We are the custom dress, we are the custom tux for that couple versus walking into Neiman and pulling one off the shelves, this looks good, or getting a dress off the hanger and putting it on like, this almost fits, let's go get married. Jason: It looks like your dad handed you down a suit or something. Mark: Right. That’s the difference in what we do. We are custom for our client. We are not off the rack. Anne: Right, and outside of that is it takes time. It takes us 3–4 weeks to literally curate the right people. I always say if you need to hire somebody just the first person off the street, good luck. Jason: You guys are bespoke. It’s bespoke hiring. Anne: We have a guarantee and all of those things, and we can back up what we're saying. But again, if you're trying to grow your property management business right now, you need to look at your staff. Here’s the other thing. Not all staff members are coming back. You may think they're coming back. They're not coming back. You’ve got to look at who are your top liners? Who are the ones that you’ve got to keep? You need to be investing in a relationship with those people first of all. If you're not talking to them on a regular basis, if you're not feeding them, if you're not taking care of them, you need to take care of them now. Who’s part of your med tier? The kind of people that are like, if they come back, great. If they don’t, what's the impact that’s going to happen? What are the people that you really know you just need to not have come back, and you need to deal with that pretty quickly. Mark: For our best person, we got a VA to assist that person so that they can do even better at the best that they were. That’s the important thing that people need to take away from changes that are coming out of COVID. It’s supporting your staff and letting them work at the highest and best use. Maybe that's taking away some of those phone calls and emails by hiring an assistant for them and to give you the opportunity to grow. It’s an assistant to you for the business development to make those calls and to set up those appointments, so that you can just close. Doing those things is the job that Anne enjoys so much is finding the individual to match. What does Jason need exactly? Even though Jason doesn't know exactly, she'll draw that out of you, and I'm just picking on you on that. Anne: That’s a puzzle for me. There's nothing better than when I see my clients six months in, years in, we have our clients for five years now and seeing them and they’d say, Mitch has been the best thing ever in my company. She's really allowed me to be amazing and do what I want to do. Literally, these are comments that we get when we survey our clients. It has been a game-changer. If you're open and able to change. I don't know how much time we have, but there are a couple of things that you need to look at, regardless of whether you use virtual assistants, employees, or whether you are looking at that which are some of the challenges that come from working with a remote team, because remember, even if you're planning to go back to an office, your staff is going to want to have more flexibility. Let’s just call it what it is. Not everybody wants to commute anymore. There are some that miss being in that environment, there's a lot of guys that are like… Mark: We’re happier. Jason: Yeah, why should I spend time commuting? Why should I spend time driving to this? I think there are a lot fewer people doing face-to-face appointments, and they'll just do it through Zoom or they'll do it through Google Hangouts, Meet, or whatever. Anne: Whatever works. What we're finding is it is truly illuminating management problems. It’s illuminating communication problems. If you had a communication problem in the office, now you have a tremendous communication breakdown outside of the office. Mark: If you have an operations failure in the office, boy, the failures are even bigger. Anne: As managers, we need to look at what tools do we have on our tool belt. We help our clients with some of that because we understand years ago that we needed to equip our people to be good at this so that they would keep our people. Mark: It is in software, it’s tools, it’s technology. There's a lot of different pieces that go into that. Anne: Looking at your management style and we like to manage personally using key performance indicators (KPIs) because that takes [...] work out of it. I don’t have to worry if they're working eight hours as long as the KPIs are done and they can get their job done in six, I'm happy to pay them for eight and let them do what they want to do, as long as my stuff’s getting done to a level that I expected. That's the easy button for management, if you don't know about key performance indicators, I certainly encourage you to learn what that is, and how to do that, but it’s one of the things that we teach our clients to do very easily. There are some easy methodologies to do that, but we are seeing some communication breakdowns from people that don't use us. We’re seeing some issues with management. The manager that was the nice guy, that was able to get people rah-rah-rah in the office because she was able to see them, that’s now changed. Now, work is starting to do great. Mark: They can't hide behind the curtain. Anne: They can't hide behind that personality anymore because work’s not getting done. That’s one cautionary tale that I will throw out to your listeners. Jason: Results don’t lie. Anne: They don’t, but it’s difficult to have conversations if you don't have data, and a lot of times, people don't want to track data because they think it's too difficult. We teach our clients how to do it very simply, very easily, and very quickly. That's the other thing. You’ve got to be able to get feedback daily to keep on top of it. If you wait for weeks or months, you are now in this huge hole of garbage that is very difficult to get out of. Make sense? Jason: Makes sense. It's been awesome having you here on the show. Maybe we can take just a few minutes, let's talk about some opportunities right now and ways you think property managers have an opportunity to grow after COVID. We’ve touched on maybe doing webinars, I think you threw out there, the Airbnb. I think I have one client that added 24 doors in a month just from former Airbnbs by cold calling them and reaching out. Obviously, you got to convince them probably to get the furniture out of the place, and make sure that these are good opportunities to manage, and that it’s going to rent effectively compared to what they're paying because some of them were making a lot of money. Mark: They were. You can offer a turnkey for that. I know you've got furniture and all, I'll take care of making the donation, or I'll get the local company that buys furniture and resells it. I don't know if there's a market for that right now, but I'll get it picked up by Salvation Army or the kidney people, and you'll get the receipt. I'll take care of all of that and make it easy for you to let me manage your property long-term. The property managers that think that way are the ones that will be successful. We’ve been seeing that happen in Airbnb and a lot of them are coming back out of service. Anne: One of the things we always recommend when we're consulting with clients just in general is know your avatar. If you're a short-term rental person and that’s your avatar, then you need to create a different marketing strategy around that, like how are you going to deal with that. If your avatar is long-term rentals and you want to gain business by going after short-term to convert them to long-term like Mark said, have a package, have a system, get your relationships put together. Right now interestingly enough, we have investors that are scared to death and are selling, and we have investors that are super excited and are buying. Mark: [...] sales transaction. Though the property manager doesn't have a sales component in their business, they need to have an alignment with the referral program to somebody that does sales. I mean I'm selling two houses a month this year. Anne: Without trying, without marketing. Mark: Yeah, these are my investors. They just say I want to sell, and I’ll say I want to make the commission. No problem. Anne: It's about having a strategy, being able to implement that strategy. and figuring out what are the resources that you need to create that strategy. We think using virtual employees and virtual assistants is a great way to maximize all of that because right now, it is kind of intense. If you're going to do research for short-term rentals, there's not a database you can necessarily easily pull from. You’ve got to go search for them, talk to them. Having that marketing strategy based on what it is that you want to do, having a value proposition that speaks to the pain that the person is dealing with, all are very important. Having a website that actually can capture those leads and make you look professional which is what you guys do is also part of that. You have this well-rounded marketing plan. Mark: We have our VA do all the research. Maybe it’s calling everybody that's on Craigslist or ads out there and saying, you may be tired of being a manager, you should go to this webinar we have coming up. It’s how to be a better manager and how to deal with the current [...]. We can do all those invitations to get people into our webinars that are going to show them they don't need to be doing this anymore. There's a lot of different ways that property managers can grow their business right now, but they need to think smart and make those investments. Anne: And HireSmart. Jason: And they need to HireSmart. Awesome. It's great to see you guys again. I'm glad you guys are doing well there over near Atlanta. Keep me apprised as to your next idea. Anne: We always have them. Jason: You always have them. That’s as crazy entrepreneurs. We always are coming up with new stuff. I'll let you guys go and I appreciate you guys coming on. Your website is? Anne: www.hiresmartvas.com Jason: All right. Thanks, Mark, thanks, Anne. Mark: Thank you very much. Anne: Welcome. Thank you, Jason. We appreciate you. Jason: Awesome to have them on. If you are a property management entrepreneur, and you're wanting to add doors, and you're wanting to build a business that you actually enjoy, that you love, that is built around you, this is what we do at DoorGrow. Reach out, I guarantee that we’re going to make your business better in some way, shape, or form, and you're going to love it. Even if you feel like you hate it now, maybe you're thinking you want out of it, you're feeling like it’s uncomfortable, you're probably just doing the wrong things in that business, and you may need some VAs that might be a solution for sure. We can help clean up the frontend of your business and help you get the business in alignment with you. Reach out, check us out at doorgrow.com, and make sure you join our Facebook group. We've got an awesome community there, and people that are helpers, that are givers, and you can get to that by going to doorgrowclub.com. Mark and Anne are in that group. We've got lots of other really cool property management entrepreneurs that are willing to contribute and help you out. Until next time everyone. To our mutual growth. Bye, everybody. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you’ve learned and start DoorGrow hacking your business and your life. April Fools Day is coming. Prank your friends opening a never ending fake update screen on their computer. Sit back and watch their reaction.

On this episode of Quiet Light, we talk to Steven Pope about how to handle any problem you're having with Amazon. Steven is the founder of My Amazon Guy, a full-service Amazon agency, currently assisting 80 clients. They seek to help their clients and others with all of the possible Amazon travails businesses face. Topics: How and why Steven started his agency. Dealing with Amazon account suspensions. Best ways to rank organically on Amazon. The outlook for American-made products. The number one action item in advertising. A major success story for Steven's agency. How to hone in on what changes will make a difference. Transcription: Mark: Joe, one of the things that you do with Quiet Light is you have a pretty wide network of people that you're now talking to. And I know you recently talked to Steven Pope. He is an agency owner. He helps Amazon business owners solve problems. I know that it's like crazy generic for me to say that but when it comes to owning an Amazon business, there's a lot of different problems you can have; everything from suspended accounts to; I mean, you name it. And I know you guys talked a little bit about the services he offers. But not just the services he offers, you talked about some of the problems that people face and how he goes about solving them. Joe: Yeah, there's something; look, we generally don't have people on pitching their products and services, simple as that. And so when I got this email introduction to Steve and set up a 15-minute call to grill him a little bit on who he is and what he does, the first thing I did was ask for five rapid-fire questions about what to do on Amazon if this happens and he answered them all and it was great. And then he said I've got 300 videos on YouTube that does the same thing. I give it all away for free and if people want to hire me as their agency, then I'm here for that as well. So I just dug into those videos and I love it. I think that you should hear him talk folks. You should listen to some of the things that he suggests and he gives it away for free in this podcast as well. I ask him the questions. I drill deeper when there needs to be a follow-up question. But then he also and it should be in the show notes, he also has a YouTube channel. It's My Amazon Guy on YouTube where he's helping people solve problems. One example is a woman and this is; and I talked about a little bit, single SKU, 100% of her revenue is coming from a single SKU on Amazon and oops she got suspended. Mark: Oh. Joe: Right. And for a week and a half or so, she cannot solve the problem and so she's losing five or six thousand dollars a week in revenue. And Steven has a process for that. It's not rocket science. It's three separate sentences that help get your account unsuspended quicker… Mark: What are those three sentences? Joe: He goes over them in the podcast. I can't recall. I recorded it yesterday Mark. You know how my memory is come on. Mark: I was hoping to tease it so you actually listen to the episode. Joe: Yeah, okay. So you actually have to listen to the episode. Mark: There we go. Joe: Why don't we just go to that? So that's our teaser, go to it… Mark: We are really not pros of this already. Joe: Not at all. If you have anybody else like this that's an expert in the space that gives it all away, regardless of the fact that they also have clients that pay for the service, introduce them to us, because I think this type of information is fantastic. Because everybody hears yeah I hired an agency and my customer acquisition went through the roof. We hear it as well. But this person was referred to us. I grilled him. I know who referred most of his clients to him and I have great respect for that person and they've been on the podcast as well. So give it a listen. Hopefully, it's going to help everyone that has even if it's just 10% of your revenue on Amazon, it's worth a listen and worth getting over to that YouTube channel to get educated as well. Joe: Hey, folks, Joe Valley here again with the Quiet Light Podcast. Thanks for joining us. Today I've got the pope with me this morning I had the was that was last week's podcast and today I've got the pope. You probably get that a lot, don't you? I'm sorry. Steven: The Popemobile jokes when I was a television reporter days, yeah, I remember them. Joe: My full name is Joe Valley when I was in college the Peanuts folks; the Snoopy, Charlie Brown, and all that, it was a big Valley girl craze back then. And there was actually a Christmas or birthday card that said something about Joe Valley Beagle for sure. That's my only connection with something semi-famous. You've got a big one to the pope. Anyway, we're here to talk about Amazon. Your business is The Amazon Guy and you're going to share absolutely every possible secret you know about… Steven: Every single one of them. Joe: Every one of them. It's going to take a while, folks. Steven: Yeah, everyone who's listening to this will be a millionaire just by simply listening. Joe: No action taken whatsoever. Okay, well, let's over promise and deliver right now. We just did. All right enough of the jibber-jabber. Let's talk about you. Give us for the audience a little bit of background in yourself; who are you, what's your business, how did you start, and all that kind of stuff. Steven: You bet. So my name is Steven Pope. I'm the founder of My Amazon Guy. We are an 18 person digital agency at the Atlanta, Georgia area. One-stop-shop. All things Amazon. Everything from search engine optimization, to PPC, design, and logistics all in one place. My background, I started my agency after a side hustle in consulting Amazon for several years and one day I lost my job. And very much like the private labelers that are listening to this who are running their current day job and they're looking for something else to change their lifestyle or whatever else, this one forced me to change. So within 48 hours of getting laid off and I was working for a lighting company, I decided to start an agency and the rest is history. We just help people grow sales. Joe: And you're also living it as well because you have a brand that you apply your own services to and share that information on your own podcast as well, right? Steven: I do. So I own a brand called Momstir and it's M-O-M-S-T-I-R. And it's a brand where we sell funny wine glasses with funny sayings on them and very much a side hustle brand to try and figure out and keep my skills sharp. So a lot of agencies try and build out their like, hey, let me go network, let me go show up and shake Jeff Bezos' hand and plaster a photo on my website. We just get crapped on. We just go into accounts. We don't leave our house. We don't go to conferences, complete referral-based business. And I think that's the right way to run an agency. We just go solve problems left and right and grow sales every day and go in and get our hands dirty. Joe: And you folks know my position here. You know that I get e-mails and calls all the time from agencies and I have the privilege of working with clients and seeing if they have agencies or not. When Steven and I connected, I just went with some rapid-fire questions to see if this guy had any idea what he was talking about and it turns out he actually does. So I want to duplicate some of that here on this podcast for you. E-commerce business owners that are 90% Amazon or 20% Amazon and want to be 90% Amazon. But let's first start with the fact that you do have 80 clients now, active Amazon business owners that you and your team of 18 work with, right? Steven: We do. Everything from air purifiers to tweezers and everything in between. Joe: All right. Let's talk about Amazon Suspensions. You mentioned in our pre-call that you had a woman call you and her account has been suspended for several days or something like that. Tell that story briefly but how you go about getting something reinstated? Steven: You bet. So there's a difference between suspension and listing yank. So suspension your account is down, you can't even log in or get your money out. Listing reinstatement and this is where you have a product that's been yanked from the catalog. Each has their own problem and their own solution. Amazon is a siloed organization and so it can be a very daunting and confusing process for sellers, no matter what the problem is. We could be talking about anything that goes wrong at Amazon. It's literally impossible to have a single point of contact at Amazon so like me as an agency, we don't even have a single point of contact. We got one guy that we talked with on a monthly basis and talked about advertising with and outside of that, we're doing the same thing sellers are doing; brute force, sellers support, ticketing, emails, you name it. The difference is that because we've seen the trends between the accounts, we're able to see what works currently. And I say that because what I talk about today may not work 90 days from now and that's because the platform is shifting at such a rapid pace. It's entering its maturity phase. We've seen Amazon change all the rules constantly on a whim, which is why you shouldn't be 90%  Amazon sales. You probably need to diversify if you want my opinion. But let's talk about this, so I got a call today from a single mom and her listing was yanked. This account, $30,000 a month in sales, one product, and all she could do… Joe: Bad idea, first of all, but go on. Steven: So she was in tears talking to me today. And I share this with genuine care and knowing that this is her livelihood and Amazon took her livelihood away. And it wasn't even for an egregious thing. It wasn't like she broke a rule. One day the algorithm crawled her catalog, looked at a bullet point, and said, this looks like something we don't like, yank. And so she did all the right things. She fixed it. She made the changes to the ballpoints. She contacted the support team. She got on the phone with what's called the captive team in America. She sent listing evaluations, e-mails. She did all of the right things and can't get the listing reinstated. And so for seven days, her business has been down. And if it doesn't get fixed, she can't afford what she needs to do to live or run a business or run her household. Joe: So that's something you're confident you can fix based on the phone call you had with her? Steven: 100%. Joe: How long will it take? Steven: That's the part I can't guarantee. If an issue like a listing yank is down we have a near 100% reinstatement rate, but what we don't have is a timing reinstatement guarantee. For some accounts, we'll get in there and we'll fix things within 48 hours and other times it takes 30 days. And it has nothing to do with the talent that we have or the process. It's just that Amazon's system sometimes just is absolutely breaking and they don't have; they use the 80:20 rule to an extreme. If they can get rid of 80% of the bad actors with 20% of the effort knowing they're going to screw over 20% good actors, they're okay with that. Joe: Lots of actors these days, I guess. Steven: And because of that, even if you're doing all the right things, you will eventually run into this problem. Your listings will get yanked. You'll get suspended. Whatever it might be, you will face a challenge that economically damages you and you have to act quick and you have to be concise. And whatever you do, don't submit 10 tickets. Don't do that. Your appeals need to be concise. You need to be giving them exactly explicit what they ask for and make it easy on them to help you. Joe: Do you have any language on your site that tells people exactly what to do? Steven: We do. Yeah. We have a page. I'll give it to you for you to put in the show notes, which is basically a plan of action to do when you run into a situation like this and in high-level summary, you do three things; admit the problem, how did you solve the problem, and what are you going to do to prevent the problem from reoccurring? And those could be two to three sentences a piece. If you do that and you format it, just like I mentioned, you have a greater chance of success. Joe: You don't think that they should write 17, 59 paragraphs for that seller account to Representative Reeve? Steven: No. Joe: No, I'm kidding. Of course. Steven: Nor do I think you should mention that you've been on Amazon for 15 years and you're a half a million-dollar business. They don't care. Joe: They don't care, yeah. Steven: The person reading this is looking for reasons to not approve your requests. They're not looking for reasons to approve it. So give them exactly what the request with no fluff and then you'll have a higher chance of getting approved. Joe: Okay, so I'm just going to say to those folks that have a hero SKU like that, knock it off, takes some of the money, launch a new listing, and spread out your risk so that you're not in a situation like that. What's the best way to rank organically? You're launching a new product, what's the best way to rank on Amazon, how do you get from page nowhere to the top of Page 1? Steven: So two types of situations we could be in; situation one is you're launching a brand new product and situation number two, you've had a product on Amazon and you're trying to take it to the next level. I'm going to talk about the product launch first because there's what's called a honeymoon period in the first 14 days of having an item on Amazon. You want to maximize traffic to the listing and maximize sales during that honeymoon period because it will leapfrog the listing rankings in a very rapid succession. If you can show Amazon that you're for real, you're the real deal, this is your first product in the account and you got a hundred sales in the first two weeks, they're going to pay attention to that. In the past, people would use programs like viral launch or some sort of giveaway to make this happen. Those programs no longer are as effective as they once were so you can't just solely rely upon that. What I recommend you do is; I'm assuming you've got a budget for the product you're doing a launch for so I'm assuming you spent two or three grand on the product. I would set aside $2,000 for Google and Facebook ads in the first 14 days. Spend it. No guarantee you're going to get sales out of it. No guarantee that you're gonna get a good ACOS. That's not the point. You're trying to train the algorithm that the product is important and that you personally can bring traffic to the Amazon platform. They will reward you accordingly. From there, it's almost 90% Amazon PPC in the first couple of months. And then from there, you can start relying more on SEO. For the other products that have already been there, the longer you've been there and the lower the run rate you've had, the harder it's going to be for you to start gaining. So there's a bunch of core key practices that we could discuss; back end search terms, make sure you've got 250 characters that are unique, have no commas, no duplicate words, make sure you got misspellings in there, and include a couple of Spanish keywords, front end, you got titles, bullets, images, A plus content, all of those need to be maximized. If you don't have every one of those fields maximized you're going to be losing out on keyword rankings you could have gained otherwise. So everything you do on Amazon to grow sales can be boiled down to two things, driving traffic and improving the conversion rate. SEO is almost primarily a traffic generation strategy. However, if you rank four words you don't convert on, you will stop ranking for those words. So if you're selling an apple slicer product and you want a rank for foot rubs or foot lotion or whatever; it's the first thing that came to my mind, it's not going to work. I guess I need a foot rub right now. Joe: I guess so. Steven: But in any case, there's so many different things that help with ranking on Amazon, and the one that I would say is your quick five-second hack today for those that are looking for like, okay, that's cool, I understand I need to optimize but what can I do right now? Go into your A-plus content and make sure every single photo is maximized with a hundred characters per A plus content photo. So if you've got 20 photos, that's 20 times a hundred characters of keywords you're probably missing out on right now. And throw one of those to be Spanish, put misspellings under one of them. Amazon claims that they don't index the A-plus content. I believe they're big fat liars and I can prove it. I've put Spanish behind one photo, I didn't put it anywhere else and guess what? We indexed for it. Joe: How important are product demonstration videos in this conversion aspect? So ranking is one thing that's important but if you're not converting, what's the point? And eventually, their algorithms are going to say people are looking, but they're not buying so we're going to de-rank you I assume. How important are videos in that conversion process? Steven: Minimum. Joe: Really? Let's talk about that. Steven: So I'm coming from a background in television where I thought video was king, right? Content is king. But video on Amazon, I'm utterly surprised by how few people are actually watching the videos. And so, in my opinion, instead of spending $5,000 on some professional photoshoot, grab your cell phone and just talk on camera about the top product features for 60 seconds and call it a day and put it on your listing. Now, if you're running a corporation that's not going to resonate with your management staff. They're going to throw a conniption fit. Obviously, that's not going to work. But if you're a side hustling brand and you don't have a video today, fix it. Go out and get one. Shoot it on your cell phone. Put on the target demographic, whoever you want to buy it. It will help. But of all the things that we could talk about on today's podcast, video will be at the bottom of the pile and it's because nobody clicks it. Joe: Let's talk about American made then because we've got a situation in the world where we're in trade wars with everyone else. How important is; and I know you don't have a crystal ball that I see on your desk. Apparently, you need a foot rub. You're thinking about that while looking at me on video. Again, I don't know why people help me out here. But crystal ball American made products, given the trade wars that we are in. Is it going to be something it's going to be important on Amazon in the future? Steven: I consider myself a thought leader in the Amazon space, and that's why I'm going out and getting on my podcast. I want to talk about where I think Amazon is going. I personally believe manufacturing is coming back to the United States. Is it here today for B2C products? No, it's not. I think it will be soon. All of the symptoms are there. If you're looking at the symptoms there at present; you talked about the trade wars with China, tariffs increasing currency exchange wars, and all that good stuff. COVID is a second reason the entire supply chain and the entire world broke down. Globalization takes a hit when international events happen. So nationalism and hyper localization are likely to occur under these circumstances. In addition to that, the user base who may blame COVID on China is going to start actively looking for American made products. This is going to help you with margin issues where you're selling a product for sometimes 40, 50% more in cost. They're willing to bear that market just because of principle. And the question is, how do you manufacturer in the States and do so profitably? I do not know the answer to that question. Joe: I was going to ask that and maybe you know, the answer to this one, how do you find those manufacturers in the States? They can go to Alibaba and eventually get to the manufacturer in China and there are some services; we've had folks on, Zach from Gembah can help you with finding manufacturers but how do you find them in the States? Steven: I have tried to solve this problem for the last three years. I joined what's called the Georgia Manufacturing Alliance. So I'm in the Atlanta, Georgia area. I toured several different manufacturing facilities. And what I learned is that for the most part, the United States is a B2B manufacturing country and most businesses are focused on B2B products. So, for example, a facility I went to, they made toilet seats for airplanes and it's a special process to do that. Joe: Sure. Steven: They have to fire-resistant, right? Couldn't you can't buy that overseas because there's lives on the line. B2C products like gifts or day to day households; anything that's not topical or consumable, because obviously most of those are made in the states currently. Joe: Exactly. Steven: But home goods, if you will, it is absolutely cheaper to go overseas right now for that. There are brands like American Giants who hires 100% from end to end American made, American laborer and they are doing well. They're selling the Mercedes Benz version of a hoodie right now and they've proven it works, but it doesn't work on every vertical or every catalog, every type of item today. I think technology is going to be the last category that this will work for. But I do see the symptoms and I think if you were an investor today looking for how do I get ahead in five years from now; not today, but in five years from now, I would definitely set yourself up for American made manufacturing and an American made company run by Americans selling to Americans. Joe: Okay. Crystal ball. I love it. Let's talk about that person who has the American made products or an overseas product and they sell on Amazon, what's the secrets to sponsored ads? What can you tell folks that are listening that you do that they should be doing to help them lower their ACOS and increase their conversions? Steven: If there's one area that you need to hire out for if you don't have the expertise while selling on Amazon, this is the one. And it's because advertising is changing at such a rapid pace. If you haven't been watching two webinars a week or spending two hours a day on your ads you're behind currently. In the last two weeks alone, display advertising, the cat is out of the bag. That's what I would have given you two weeks ago but because segmentation approaches and every avenue available to advertise your product and generate traffic right now everybody is jumping on. Everybody's looking for that edge and so you have to be very quick. You're going to have to rotate your funds around. There are three types of ads today on Amazon, sponsored products, sponsored headline ads or sponsored grants, and finally, display. Every single month we have seen a new form of segmentation come out under one of those three core areas. Three months ago it was custom brand images. Display came out even more recently than that. The one that's coming out on 10% of accounts right now is retargeting; hitting people off of Amazon who have already viewed your products or who have already purchased your products. So those are two different things and then there's a third one that's coming out that is people who have search-related keywords off of Amazon to bring them into the platform. Two of those three are only available to 10% of accounts right now but the moment you get a glimpse and you see it on your account; nobody's giving you an announcement. Amazon is not emailing you and saying, hey, this is now available. You literally need to check your seller central portal in every nook and cranny on a weekly basis, because I'm telling you, you will find it 30 days before somebody shows you it. Joe: And the advantage to that is? Steven: You can quickly execute it and then generate additional traffic at a lower cost and get into additional areas where nobody else is paying attention to. So if you are on that display bandwagon before two weeks ago, you would have had record low ACOS, new sales you wouldn't have gotten otherwise, you could have shown up on your competitors page in ways that they couldn't predict or know how to combat. And you should still do display today, by the way. I think that's probably the number one action item in advertising right now. If you don't have display ads up, go do that. Joe: I got you. Okay, your average client is doing a million dollars a year in revenue I think, right? Steven: Yep, somewhere around there. Joe: Okay, give me a success story. Steven: Sure. So I have to think carefully now which brands have you made public permission. Joe: You don't have to name brands, you can just talk about the story itself. Steven: Yeah, so let's talk about a generic men's supplements company; let's call it that. Joe: Okay. Steven: The hardest category to sell in right now in Amazon is supplements so if you're looking for a product to launch, I wouldn't go into supplements and that's because of all the challenges and listing yanks and stuff we kind of ended about earlier. It's egregious right now how bad it is in that category but in any case, when I first started, my first client as an agency was a men's supplements brand and they tried to other consultants before me. They couldn't get past four grand a month in sales. Within 60 days we got them to $80,000 in monthly sales. A couple of months ago, they clocked in at 400,000. And it's because the grind; the My Amazon Guy process, the grind if you will, it works. You go in every day and you look for as much traffic as you possibly can get and find as much conversion as you can get. And it takes going attribute by attribute, ad by ad, design by design; every single layer has to be fulfilled. Where they may have previously failed, they didn't load their entire catalog to Amazon. That might sound like a core issue and some of you are like what you mean they didn't load their entire catalog but if you're an omnichannel brand today, sometimes you purposely don't load all your product to Amazon. I think that's a big mistake. The fastest way to grow an Amazon is load more product, launch as many as you can. Every three products you launch, one is going to fail flat, one is going to break even, one is going to succeed. So you've got a one out of three ratio to work but load as many new products as you can to your lifecycle on average on Amazon. Second, get on as many platforms as you can. Diversify. Amazon, eBay, Etsy, Walmart, Shopify; all of those are important. Joe: Not necessarily in that order, I'd like to know where would you go to first beyond Amazon US. Steven: Yep, Amazon US and you could talk about more marketplaces like Europe or Japan or Singapore and Middle East and Australia, I guess let's pause on the location geos for just a second, let's talk just marketplaces. And so after Amazon, if you have a product that can sell on Etsy that's the one I would go to next. It is the easiest to get on and will produce at a higher rate than it would have six months ago. And it's because when Amazon supply chain took a hit and the shipping timeframes went down Etsy doubled in size overnight. Doubled in size but did not double in competition which means that's your opportunity. We are seeing massive success on the Etsy platform right now. Joe: Any particular category? Because if I'm just selling supplements, I can't sell them on Etsy, right? Steven: You're not supposed to. It's supposed to be handmade and they're supposed to be hard to obtain items. I've seen everything on Etsy, though. So even, you know, it may not be the first platform of your choice if you're selling supplements or if you're selling something that doesn't go well on Etsy. Maybe launch on eBay and Walmart first before you go there, but I would still give it a look. Joe: I want to say that the transferability of an Etsy account may be a challenge. And transferability is one of the four pillars. If you can't transfer the control of the assets of the business, your business is not sellable or much more difficult to sell so we'd have to look into that again. The last time I had any significant Etsy account as part of a sale, it was tuck in hopes that you couldn't squeeze through to try to get the transfer of the control that Etsy account. So I would say caution there but if you're looking for that short term gain, it's fine. Where there's a will, there's a way. My particular buyer wasn't willing to go that route and he could have but he chose not to and that's okay. What about the idea of just simply feeding your stallions and maxing out Amazon.com if you're still growing and there's lots of more opportunity here in the US, why divert your attention to an Etsy or a Walmart or whatever it might be or the EU? Steven: So this is a good debate between focus and diversification. They have a massive amount of friction between the two. I believe it's easier to do diversity than do focus. The shotgun approach generally will lead to more success. That's my personal style. If you're a perfectionist, focus will work a lot better for you. So I would say that's a choice the business could make, a business decision if you will. Joe: And I have to say and interject that it depends upon your goals. If you're going to run the business for the next five years, I think diversification is really smart because if your business is more diversified, it's going to be risk-averse. The lower the risk, the higher the value in terms of the multiple. If you've got two businesses that are equal in revenue and discretionary earnings size, and one is 90% Amazon and the other is 40% Amazon, 30% Shopify, and 30% something else or other marketplaces but the discretionary earnings is the same, same number of SKUs, same hero SKU count and all this other stuff, that diversified business is less risk. Less risk equals a higher multiple. You're doing the same amount of revenue, but your business is much more valuable because buyers see that it is less risk and they'll pay more for it. My two cents. Steven: So I totally agree with that and you're definitely the expert on buying and selling, so I won't even go there. Joe: Have you noticed how I like to interject my opinion on buying and selling when I'm talking to somebody else about Amazon rankings and things of that nature? Steven: I couldn't have guessed why. Joe: It's amazing when you run the podcast and you get a microphone and you can say these things. You had talked about 80% of the work that you do in a seller account is fairly SOP oriented but there's 20% that requires just instincts and a deeper dive into the why of the particular problem or ranking solution. Can you talk about that 20%; what are those things and how do you really hone in on what's going to make a difference in your particular brand and ranking? Steven: So for the 80% that's SOP or standard operating procedure, you can follow a checklist and it can be clerical in nature. If you go through that checklist and you do an 80% job, you're probably going to succeed. The other 20% is the experience, the nuance, the analytical understanding to forecast, predict, and see what's going to happen under the chaotic nature of Amazon and e-commerce, understanding the landscape, and understanding what happened in the previous situation. So as one small example, understanding the notion or the difference between a coopting of demand versus a demand gen product, this is an easy to understand concept but doesn't even cross the mind of most individuals. So what do I mean by this? If you go on Amazon today and you want to sell an apple slicer, that product has been commoditized. You're basically trying to sell a commoditized coopting demand product. There's already demand, you just need to go get it and tsxake your share of it. If you're trying to come out with a patent protected product, gadget, widget; whatever it is that does something that solves a problem that nobody even knew was a problem, that's demand gen. The guy doing demand gen has a one out of 20 chance of succeeding, the coopting demand guy has got like a 12 out of 20 chance of succeeding; much harder but if done correctly, the demand gen product that wins., the one of the 20 will be gigantic in size and will dwarf everybody else. GoPro is a good example of this where they solved the problem nobody knew they had and now they have an entire empire. So if you're looking at analyzing data and you're looking at like how do I solve my problem, you're going to have to consult either an expert or you're gonna have to grind it yourself. You're going to have to spend so much time analyzing this question and watching all the podcasts, watching all the webinars, reading information, submitting the tickets in Seller Central on a daily basis until you hack it, or figure it out. That's what it takes. And that 20% is very hard and you want to understand like, what do I do in this situation? If you've never done it before it's really hard to learn. Joe: And it's probably going to end up producing 80% of the revenue if you click the rules there. You actually have book a coaching call on your website. You're not just working with clients and taking agency fee on a monthly basis, but you are doing coaching calls as well. Can you talk about what type of calls those are and how often you do them? Steven: You bet. So I probably do one a day on average. And I have a very different vision of what agency should be than the typical agency. I would give away all or trade secrets. I got 300 videos on YouTube answering literally every question. If you have pesticides gating on your product and you sell tweezers and you're like, why does this on my account, I don't even understand this? We give away the answer key right on the YouTube video. Joe: And how do they find that; is it My Amazon Guy on YouTube? Steven: Yes, and if you were to literally Google pesticides gating My Amazon Guy, you would find it. Or even just pesticides gating Amazon it'd probably still come up. But the point I'm trying to make here is we share all our trade secrets openly. We're trying to add value to the community because it comes back. I know that if I had value to you today over the next year; let's say you follow me for a year before you even pay me a dime, you will then come and say, hey, shut up and take my money. And so sometimes I will hear from people that have watched 40 of my videos and they just want to say hi. But on those calls, typically we're getting in and we're solving a specific problem. That's usually the number one reason one of those comes up is because, hey, I've got a business problem I need a solution today. I can't wait around and figure this out. Joe: Like that woman's account who was suspended. Steven: Exactly like that woman's account that was suspended. I offer ala carte services on my site for those that aren't ready to make a monthly commitment. Now, I prefer having monthly clients. It's an easier business model, don't get me wrong but we are going to serve wherever we can. We're going to add value where we can. We'll get our foot in the door. One of my largest clients; we did a one-hour coaching call and now they're my largest client. And it's because, from day one, we will teach and show and offer value and grow sales. That's what we do. Well, yeah, it's kind of fun doing a coaching call, you jump on, you're opening up a seller central account, I can draw on your screen. We can go in there and figure out hey, here's all the mistakes you're making, here's where you can best practice improve. We'll hand it all over. And if you don't want to do the work yourself, hire us. Joe: People, do it. I think that it's worth it even if you're just trying to learn something new and manage the business yourself. Go to YouTube, take a look at all of these three things. They give it all away. Normally, you're not ever going to hear me talking about an agency on the Quiet Light Brokerage podcast, we're here to help first and serve you first and in this way, I think we're doing that well. I think my initial conversations with Steven were me grilling him and seeing if my bullshit meter went up and it really didn't at all. So he's a straight sharer. He's helping first. He's educating, sharing it all; he's giving it all. If you want to do it on your own go to his website. Go to the YouTube channel. If you want to have a coaching call, go to the coaching tab on his Web site and spend an hour working with him and learning. Your business is very likely your most valuable asset, you should be spending time on learning how to run it well, number one. But strategically self-serving; look, this is what we do, folks, if you're not understanding the value of your business, what are you doing? You're just driving revenue for what? To put more money into inventory? How much do you take out with 80% year over year growth? Not enough. You will probably make more money on the exit, times two or three than you make running the business on a daily basis. So if you work towards that, understand the value of your business, set an exit goal, and reverse engineer a path to it, even if it takes two, three, four years, you've heard us with those types of clients that we'd love to have on the podcast that have successfully sold their business for millions of dollars. You should do it as well. Go to My Amazon Guy. Check it out. Reach out to Steven and learn as much as you can to improve your own business. I think he's one of the handfuls of people in this space that I've trusted within five minutes of speaking to him. I think you should. Steven: Thank you, Joe. I appreciate it. Joe: My pleasure man, good to have you on. I'm looking forward to working with you in the future. Steven: That sounds like a plan.   Resources: My Amazon Guy My Amazon Guy YouTube Channel My Amazon Guy Podcast How to Appeal Account Suspensions Listing Reinstatements Marketplace Launch Assistance for Walmart, Ebay, and Etsy SEO Articles Advertising Articles Campaign Segmentation Articles Quiet Light Podcast@quietlightbrokerage.com

Inspired by a video course that we had to re-record this week, we are going to discuss the top five ways buyers can gain instant equity. Tune in to hear these great tips on how to maximize your business. Topics: Why an Ecommerce business may be undervalued. What makes it hard to identify gross profit trends. Rewards vs. cash back credit cards. The less-than-obvious ways to gain instant equity. Examples include: Renegotiating costs. Net 90 terms. The China Magic Mastermind's methods and why they're so effective. Transcription: Mark: So, Joe, recently Chris Moore, our chief marketing officer, came up here to the Twin Cities. He rented an Air B&B and he and I sat down for a day to record or rerecord the course that I recently put together on how to sell a business for six, seven, or eight-figures. I got to tell you, I'm not a fan at all of recording things at least in video format. I know you're a natural at it. You used to do commercials; direct commercials? Joe: I wouldn't say I'm a natural. I've seen you and I've seen me and I think you do a great job. Mark: Well, that's very political of you. But you know something during the course that I wanted to get across because I was going through some of the tips that we've talked about for sellers about how to maximize the value of their business and one of the points I wanted to make is that a lot of maximizing the value of your business isn't so much taking an accounting trick and it becomes magically more valuable. It's more about not artificially or accidentally discounting your business because you just don't know what you're doing, right? Or you don't know how to run the right financials or you don't know how to do an add-back calculation. Well, on the buy-side; this is two sides of the same coin. On the sell-side we want to make sure that we aren't artificially discounting our businesses and that we're taking advantage of some of the really natural, low hanging fruit that we can do to make sure that that we're getting full value or capturing full value for the business. But on the buy-side sometimes there are opportunities when somebody doesn't want to put in the work, for example, to switch from accrual to cash, which we've had. Some people say it's just not worth it for me to take that time. So today, I think you and I, we're going to talk; I mean I'm going to bug you and pester you with questions and grill you as much as I can about ways that the buyers can add some instant equity, get that instant jump in valuation by buying a business with certain characteristics. Joe: Yeah, and then for sellers it's important to listen too because if you ever think you're going to sell your business either through Quiet Light or on your own; especially on your own, you need to pay attention to this because you don't want to be taken advantage from by the buyers that are listening to this. If they're listening now, they're going to learn some things and potentially buy your side, they're going to learn some things that if you hang up halfway through you're not going to understand and make sure you're maximizing the value your business. And every time I say that I feel a little wonky. Really what you're doing is you're not jacking up the seller's discretionary earnings, you're actually getting what you deserve. You're learning to understand the true value of your business, which is your most valuable asset more than likely so pay attention to it and make sure you understand what they are. So it is just Mark and I on this podcast and we're going to talk about maybe five things that buyers can do to gain instant equity in their business. And the first one that; and this is me thinking if I'm out there buying on my own, which I'm not given the role that I'm in, but if I were, this is what I would do. And the first thing I would do is look for businesses that are presented for sale on a cash basis. Now, it has to be a business that's growing rapidly, and let's talk specifics here. This is a physical product e-commerce business that's growing rapidly and using cash accounting. I don't love accounting either, folks, but it's one of the most important things to pay attention to when you are buying a business or when you're selling your business. If the business is growing rapidly, you're trying desperately to keep up with inventory needs. And in doing that, if you're buying it on a cash basis, you are continually taking money out of the business to support the ever-increasing need for inventory volumes. So you may be spending $10,000 this month on inventory but you haven't sold it yet. That's going to depress your net income or your seller's discretionary earnings. It gets to a point where; I sold a business recently, it was Brian and Janine, they were on the podcast three or four weeks ago. They went from something like 270,000 in revenue the first year to 1.5 million the second year to 5 million the third year. And Janine kept writing bigger and bigger checks, they're actually wiring more and more money to China and kept saying to Brian where's our money? We keep giving everybody else our money, but we're not taking any. And it was because rapidly growing businesses like theirs was such a cash requiring machine. So if I'm a buyer, I'm going to look for a business that's growing rapidly and is presented on a cash basis because discretionary earnings is going to be artificially depressed, it's not the right way to present a business for sale. On the flip side, if a broker is listing a business for sale with declining revenue on a cash basis you're overpaying for the business because it's not requiring as much cash to buy inventory because it's less and less inventory. It's just the opposite. So you've got to look for businesses if it's presented properly, is going to be accrual accounting, if it's not presented properly they're doing cash. You could gain instant equity by buying the business on a cash basis. Mark: Yeah, I'll take on it and say absolutely, a quickly growing business in the e-commerce world on cash basis is typically going to be undervalued for the reasons that you stated. But the two warnings that I would give on this would be one that you already said, and that is if it's declining and particularly if the seller or the business owner has decided to take their foot off the gas; they're not looking for more inventory. The inventory that they're having in stock is either aging out or running out and they're not reordering. Now, you're going to have an artificially high gross profit on this business because they're not buying more inventory. The second thing that I would just caution people against is on a cash basis, you can't really identify what the gross profit trends are, except by taking some really large timelines and using that. So take a look at unit cos1ts at that point to see what the trends are if you can get that level of detail just to make sure you're not in a business where gross profit margins are getting squeezed by huge amounts because that'll be the other risk and the other major downside to cash basis accounting is you just don't get the same insights into your gross profit margins. Joe: We're going at math here. I know it's nauseating but real quick math folks, I've just seen a jump in discretionary earnings flipping from cash to accrual by $70,000, $100,000 in some cases. And so the instant equity here is if you're buying a business that you find some inexperienced person selling on a cash basis and it's depressed by even just $20,000 because it's cash instead of accrual and you're buying it three times, you've just gained $60,000 in instant equity in the business; simple math. Mark: Yeah, and I think one of the objections to this and I've heard this from buyers that are evaluating e-commerce is okay that's great but why would I want to buy a business with paper profits and really no cash? The cash basis is the amount of cash coming in and out of the business. And you brought it up Joe that you were speaking to somebody recently that said where is my money? I keep giving everybody else my money. But what I think a lot of sellers miss and I would encourage sellers to think about this as they're growing and evaluating an exit and for buyers as well, as far as what's a good entry point is that there does seem to be a transition point in the growth of many of these businesses where they stop becoming these cash hungry machines and the growth levels off a little bit and you get to a certain size where even if you are still growing and still investing disproportionately in inventory, you start seeing some of that money accumulate in a bank account. It does happen. There is a pivot point. Have you seen that as well Joe? Joe: Oh, yeah. There's no question about it. I've said way too many times that when you're working the hardest in your business, you're usually making the least amount of money. It's usually in those early years. At some point; I guess it's that tipping point, the business starts to generate more cash flow. It's not as much of a cash sock because the growth has actually slowed, strangely enough. But it's bigger. It's larger, and you're able to take more cash out of it. I definitely see that change. I want to move on to number two here, Mark. The number one thing that I see people miss when selling or buying a business is cashback money from credit cards. And I think the reason they miss it is because they think they're being sneaky and cheating on their taxes so they don't want to talk about it. And the reality is that the IRS doesn't know how to tax cashback from credit cards. It's actually a discount on your advertising. So you spend a million dollars, you get one and a half back on your cashback credit card. You've got $15,000 there that you're sliding with your personal account that's not on your P&Ls. That's $15,000 owner benefit cash in your pocket and you're thinking I don't want the IRS to know. The IRS doesn't know how to tax it, first of all. And I've talked to my CPA about this. Most people will miss that. So there's $15,000 that winds up in your bank account. That's real money somehow. Mark, is that an add back or an owner benefit and should be on the P&L in your opinion? Mark: Absolutely. Joe: Right. Most people don't put it on a P&L and that's okay because the IRS don't know how to tax it anyway. But when you sell your business or buyers when you're buying a business, look at the advertising spending. I talked to someone the other day. They were spending about two million dollars a year on advertising. They had an agency that was doing it for them. It was all Amazon FBA stuff. And I said, well, what kind of card are you using; how are you paying for that spending? They're like, what do you mean? I'm like well, how are you paying for advertising? We just let Amazon deduct it from our account every couple of weeks. Once we get to a certain level, they just deduct it from our deposits. I'm like that's very kind of you to let Amazon do that but what you're missing out there is two million dollars in ad spend, 1½% cashback, $30,000 cash to your bank account. So you've just lost $30,000 a year. Then you sell your business; this was a sizable business with incredible growth, probably I'd call it a simple math three-time multiple or might be four but now you're at $90,000 to $120,000 lost value on the business. So buyers look for these types of things. If you are buying a business and they're spending lots of money on advertising, even if it's a million dollars in advertising, you're buying it at 1½% percent cashback. That's $15,000 cash in your pocket times a three-time multiple so it's $45,000 instant equity. So between number one and number two, there's about $100,000 in instant equity depending on the size of the business. This one is the one that is absolutely most missed. Mark, you and I just switched company-wide; we just switched to American Express gold cards because we get four times the points of $250,000. We use points and rewards instead of cashback because we go to events and we travel and it's going to help pay for the team to travel. Mark: We don't go to events and travel right now. Joe: That's right. We're recording on June 16th, 2020. We're absolutely not going to any events. But there's often the question about, well, what about the rewards? How do I calculate the rewards? I love doing that instead. And I've talked to Jeremy from eCommerceFuel, that's what he does. And he thinks it's funny that people take the cashback because you can get a lot more value with rewards. But there's a conversion to the rewards, right? I think with American Express it's 1%, right? Mark: Mm-hm. Joe: So you might lose some if you do the conversion to other rewards. You can still accumulate the rewards on a monthly basis and do the conversion calculator of 1%. What you cannot do is say, well, I upgraded my plane ticket to international first class. The cost of that is $10,000 therefore I want a $10,000 add back. You can't do that. But you can do the cashback amount conversion. So for buyers, yeah, absolutely if you're looking for a business to buy and they're not utilizing the cashback benefit or the reward benefit and converting it, you can find some instant equity in there as well. Mark: Yeah. I want to speak to my people real quick. My people are the people that don't like details and don't like to sit there and calculate your tip down to the penny. That's my type of person. That's who I am. I can't be bothered for that. When I go to dinner with a bunch of friends, I'd rather pick up the tab than sit there for five minutes trying to figure out who owes what down to the exact amount. And so for a long time, this whole discussion of cashback and points and everything was just like, forget it, I don't want to be bothered with this. I mean, we're talking 1%, 2%, who really cares? But here's the thing about this, there are people who delve into this and understand the conversion ratios and they understand how to game this system and maximize it out and they do think of it just as a game. And then there are other people who are going to take advantage of it to some extent. And what I would just say is this, don't let the perfect be the enemy of the good here. If you're the type of person who has bigger fish to fry and have bigger things to do, this is really low hanging fruit and if you don't get the absolute perfect optimized setup with cashback, that's okay. But from a buying standpoint and what we're talking about here; how can you gain instant equity into a business this is one of those areas that you absolutely can gain instant equity. You can instantly gain extra cash flow for your business as well by just putting something in place, even if it's not perfect, and then you can optimize later. Or you can hire a consultant and you'll pay them some money but the long term is that you'll benefit from it more than you pay them. So if you're one of those people like me, just do it. Don't sit there and get all frustrated by it. Just do something and then refine later on. Joe: Yeah, definitely take advantage of whatever you can there; simple math. I'm with you on the tipping, by the way. I just round it up to 20% and I'd rather pay the bill than figure out who owes what. Let's jump to; I think we're up to number three here. We've given a couple of good options in terms of how buyers can find instant equity, and it's important for sellers to understand that as well so they don't get taken by buyers if they're selling on their own or having an experienced broker. But why anybody would ever go to Quiet Light, anybody but quite if they're listening to us right now it would be confusing for me. But here's one that I've seen recently. One question if you're buying direct or from another firm; if you're a buyer listening to this podcast and you really want to buy from Quiet Light because we do an amazing job putting packages together, building trust, making sure that you're making a good investment and our buyer is getting a fair value and our seller is getting a fair value as well. It's got to be a win for everybody. But in the event that we have not produced enough listings that are going to be a good fit for you, one of the questions you always want to ask is when was the last time you renegotiated cost of goods sold on any of the SKUs, have you done that in the last 12 months in particular? The reason for this is because it's instant equity if they have but did not do an add back adjustment. I guarantee you if you're buying direct from somebody and they're not selling through a broker or a qualified experienced adviser, that there's not going to be an add-back adjustment for that. And here's the simple math, they're selling a thousand units a month on a product that costs $10. They renegotiate that down to $9 but they just did it in the last two months. They're so excited to; yeah, no, absolutely, definitely we renegotiated two months ago and that's why you should buy this business, profits are just that much better. And then they put a period at the end of that sentence. What they're missing is the add-back of the previous 10 months of a thousand units a month or 10,000 units at that dollar savings. So it's another $10,000 that is instant equity to the business. You're buying that business. And the reason is because that expense that was there before that's not; I know this is confusing. There was a dollar expense per unit for 10 months on the P&L times 10,000 units that's not there anymore. That expense is not going to carry forward to you, the buyer of the business. Therefore, it is an add back. So it's a $10,000 instant equity if you ask that question and you see it there. And it's boosting the value of your business when you go to sell. I think it's really important. I think most people don't ask that question. They don't look at it. They focus more on the top line. And what is it that Mike and Dave say from Ecom Crew, revenue is vanity profits are sanity I think. Most people don't focus on the profits. They just talk about how big their business is and how much revenue they did instead of actually focusing on things like renegotiating cost of goods sold. So that is instant equity and it can be found if you're buying a business. It's the work, obviously, that the seller might have done prior but you can always ask about those questions if they've ever renegotiated cost of goods sold or even how often they've gotten on a plane to go visit their manufacturer wherever they are in the world. Mark: Well, again this is something that even if you don't ask, hopefully, shows up in the P&L as well. You should be able to see some of these changes when you get down to some of the granular stuff, assuming that the P&L is good. And the only thing I'll add to that because I think you made a point well, Joe, the only thing I would add, though, is don't look at just the vendors providing products. Take a look at all the vendors that are out there. It can be anything from an accountant or bookkeeper or the person providing the cardboard boxes if you're not using FBA or one of those avenues. There's a lot of vendors for every type of businesses. It's not just the people or the products and there's a lot of places where you can get some of the additional equity, especially if it's not been worked into the overall financial picture used for the valuation at the end of the day. So that's a great tip. The next tip, so that's three, right? We have look for cash-based P&Ls and quickly growing businesses. Two, take a look at companies that either are not using cashback points on credit cards or have not added it into the valuation because that's money that just simply hasn't been captured in the valuation picture. Three, renegotiating costs of goods or negotiated vendor services that are ongoing expenses would be another area where once again that's not captured in the valuation process. The next one would be flying to China if that's where the vendors are or meeting their vendors. And not every vendor is in China. I just had a great call with somebody yesterday; a UK person who found her vendor in the UK and they had a Canadian sister company as well so pretty cool there. But meeting with the vendors in person and taking that opportunity to discuss potential renegotiations, not necessarily on price but that's a natural area to go but also on terms to make the cash flow of these businesses somewhat friendlier. I know oftentimes vendors that have good relationships or long history are willing to offer net 30, net 60, net 90 terms, which can really be a huge relief on a quickly growing business. Joe: You don't take what Mark just said and send an e-mail off to your vendor saying you want net 90 terms. It's not going to work. There's a process to get through that. It's something that anytime I'm talking to buyers they ask me how flexible is your seller on the price? I'm like you know what? I don't know. I determine the price. We agree on it together, but they're never going to tell me their bottom line. Well, do you think they'll accept X? I don't know. What you need to do is get on a good conference call with the seller. Get to know them. Have a good relationship with them. Have the call end with them going man, I love that person. I just really want them to be my buyer. And then you can ask for what you want and at the very least, you'll get a counter. When you ask for something and they don't know who you are and you don't have a relationship, the answer's always going to be no; as simple as that. So that's why you should if you can at any time get on a plane and go visit your vendor face to face; your manufacturer. I have a client right no; they're still my client. They're my friends. I sold their business in January. They bought a business since. I talked to them the other day. They were on their way to Ohio, move driving from Massachusetts to Ohio because they're going to meet the manufacturer of one of the products that they sell. This is talking about getting a plane to go to China more than anything else. There's a couple of podcasts that we've had recently that focus on this specifically. One was Dan from Titan Network talking about how to work with your Chinese manufacturer and renegotiating terms. The reason you do that is, number one for this cost of goods sold, but also because it improves your cash flow. And when you have more cash flow and you do get the terms that Mark just talked about you can spend more money on advertising. And when you can spend more money on advertising you're going to get more cashback so these are all tied together and they're all critically important. One is not more important than the other; all critically important. It's little details but they all add up to a lot. The other one that we had a podcast recently was Athena Severi from China Magic. She's also associated with Titan Network. And she talked about the China Magic trips that they do. Of course, again right now no one is going to China, but it will resume again in 2020 we hope; I'm sorry 2021, where you're able to get on the plane and go and meet with the vendors directly, get to know them, spend some time with them, do the renegotiation that Dan talked about but with China Magic, they're talking about exactly how to work with your vendors and how to communicate with them. And then they have Masterminded events every single night for everybody that's there. They bring experts on the trip to talk about how to work with your vendors and get the most out of the trip including the cultural aspect but in terms of building that relationship. So you want to do what you can to build the strongest relationship possible with your vendor, get to know them, have them really understand what a strong entrepreneur you are. As a buyer, this is after you buy the business, of course, what you bring to the table and how important terms are so that it increases your cash flow and you can spend more money and buy more products. It's all tied together. You can't do it right now, of course so, Mark, do you think any of this is happening via Zoom and Skype and that a lot more of this is happening that way? Mark: Well absolutely. And look I mean everybody has the same motivation and that is growth. So I would say obviously you need to make that personal connection and you want to make a personal connection with your vendors. That's going to help you, in the long run, to know that you can trust them and they can trust you. But you can also pitch growth. I had a client who negotiated these types of terms and was able to explain some of the growth that they had in mind; this expansion to Europe that they were going to be rolling out or other growth plans, new products that we know are going to be a hit and we want to place them with you Mr. Vendor; the vendor that's been working with us and in manufacturing our product. We want to place this with you and here's what we need to be able to get there. We really want to invest heavily in this so that we have a good supply going on in this area so it plays in their benefit as well. And right now Zoom or Google Hangouts or whatever you want to use for your video service, it's there. People know it. So making those connection is absolutely huge. Joe: Yes, so that's tip number four for instant equity and it's more about renegotiating cost of goods sold and the terms on your payments that will increase your cash flow. This business is growing rapidly, cash flow is tight and squeezed and that cash flow will help you spend more money, which ties back to tip number two, which gives you more cashback on your credit cards. Number five is interesting. You touched on something a little earlier, Mark, which was when I talked about renegotiating COGS on number three, you said, go beyond that. Go look at your vendors, look at the services that you're spending money on, the bookkeeping, the accounting, that SaaS product times 10 that you signed up for that you forgot about but they're kindly charging your credit card every month. Trimming the fat is really instant equity. We always ask what type of SaaS products are you using, what are you subscribing to, what's the purpose, and how much is the cost every month? And the reason for that is that a lot of it's just wasted. And sellers will say to me, well, I don't use that can I just make that an add back? I'm like yeah when you stop paying for it and prove that you haven't used it for a period of time. Buyers can use math and logic here and look at the different services that the seller signs up for. We all try new things, right? I signed up for The Monthly Fool and I'm not cutting on The Monthly Fool; this is more me. They offer great services. I paid for it. It's an annual renewal. I'm going to forget about it. Except that I put a reminder on my Google Calendar next April to cancel it. I signed up for it two months ago. I get the e-mails. I don't have time to look at them. I'm not going to be that investor that's going to make decisions on my own. I have an advisor for that. But if I'm not careful, I will add up 10 or 15 of those things. I try every year, often without great success, to go through my SaaS subscriptions on a personal level. We do it occasionally, Mark, on a business level and just sort of trim that fat a little bit. I think that's a good way to gain instant equity. It's not a huge instant equity, but it does add up. Every little bit of this adds up. Can you think of any other areas where you trim some fat? Mark: There's a lot of these little areas and you kind of have to be creative in looking for them and not discounting any expense category as being too small. So, for example, if you're selling overseas, internationally, international transfer rates and what are you getting there? What are your merchant processing or transfer rates? And there are a lot of services out there that are designed specifically to maximize that for you and reduce some of those expenses. Secondly, understanding Amazon's FBA storage fees and the various fees related to that or processing, sometimes you can gain a lot of instant equity by using an Amazon FBA pre-processing center and other 3PLs that will work in that regard. You talked about canceling different SaaS subscriptions. The other element I'd look at would be wasteful ad spend. We all have it. And look, how many times are you going in and checking on this? Now you might say, well I have an agency. I guarantee that agency is not looking after the account as closely as you might want them to do so. So I would say the advertising spend and last I would say would be just taking a look at the fat with SKUs and ASINs on the account. I have worked with several buyers who have looked at larger ASIN companies with a larger library of products and said the first thing we're going to do to grow this business is get rid of 20% of the products because we know that these products are making very, very marginal gains. If they're taking up cash flow for adding new inventory, they're taking up cash flow for advertising that isn't really paying out. And we can put that effort into either new lower hanging fruit on new products that will have better margins and really focus on those instead. So number five is kind of this grab all and it's don't count any category on your P&L as being too small to really look at and optimize. Keep in mind, when we're talking about adding instant equity, we're talking about the value of your business so we're talking about a multiple of this. You add $10,000 in earnings by removing $10,000 in expenses you're adding $30,000 to $40,000 of valuation to the company itself. And oftentimes with these businesses that are doing one million, five million, 10 million, 20 million in revenue, these small changes, these small percentages that we're shaving off here and there translate to quite a bit on the bottom line for you. So kind of a catch-all. That's a cop-out, right Joe? It's a cop-out on our part. Joe: It's not. It's real dollars. The trimming advertising spending we are really focusing in Mark, that's really, really hard because you've got an expert telling you that you need to spend all this money on long-tail keywords that over the course of 36 months, you're going to make a profit on that keyword. It's just going to take 36 months to make a profit and it's agonizing. We had Rocky Kliburn on the podcast. A tough name like Rocky he bought a jewelry business, right? Low cost, lightweight product, shipping thousands of them every single month. The first thing Rocky did was renegotiated the shipping rates. Actually, he changed shipping companies. I think he switched from FedEx to USPS and got the packaging for free and shipped it off. Essentially, he saved about $2 a unit. It's Rocky Kliburn he was on the Quiet Light podcast at least a year ago. But Rocky ships, 2,000 or 3,000 units a month times $2 we're talking about $75,000 a year in savings instant equity. That is simple math, simple logic. I would focus on all of those things first. The advertising thing is critically important but we've talked about my story when I got mad at American Express because they back in the last economic downturn; I think we're going to have a pretty big one here coming up but my average spending went up. I was spending 60,000 a month on PPC and they said, oh, we're going to freeze your account to pay off your balance because your average is higher than the last three months. Are you kidding me? And so I went in and I slashed advertising because I was mad at America Express. I'm like I'm going to show them. I didn't do it very wisely. There are wise ways to do stuff like that. So you remove the emotion. And that's why I always talk about math and logic is because of emotion. Emotion gets us up in the morning, as an entrepreneur, we get excited about our business but with these little details, all these five ways to gain instant equity as a buyer in your business really requires a lot of math and logic. So focus on those and if you're a seller and you've gotten all the way through this and listening don't let somebody take advantage of you because you didn't pay attention to these little details. They all weave together. They all are tiny. As Mark talked about in tipping what is it? The details are for the greater good; I forgot exactly what you said, but pay attention to all of it at times. Don't get so ingrained in it that you get lost completely on it for a thousand dollars a year. But if you can add up those numbers and multiply it times three or four, you will find more value in your business that you do deserve. And buyers, you're going to get some instant equity that's going to make a big difference in terms of buying your business. Mark: And you are like about all five of these tips show? None of them require that you grow the revenues. None of these require that you just magically grow the business. Because we all want to have a better ROI with our acquisitions, that's the entire reason that we do these things. It's to get a return on our investment and maximize that return on investment just like with a website and conversion rate optimization services, which is a great way to grow revenues if you have a traditional website, is really focus on CRO. This is just optimizing the financial picture. That's really all it is. And look for those of you on YouTube, if I were to have my camera go around my office, what you would see is just a lot of little clutter that's kind of built up over the years that I've grown comfortable with. And I think with businesses, you have to do the house cleaning. You said that we do it once in a while with Quiet Light Brokerage in our SaaS subscriptions. There are areas to optimize businesses all the time, but you kind of lose sight of that when you own a business over time. You lose sight of it because you focus on the big picture. Well, as somebody acquiring a business, it's a great time to clean house, get rid of some of that wasteful spend, optimize some of those terms, and without growing revenues, at all, you can buy a business for 3x and get an effective multiple lower than that by a significant margin at the end of the day. So I love these tips. I love the fact that we're focusing on this topic as far as how to grow a business without changing the revenue picture at all. Joe: It's a great way to sum it up, folks. Obviously, Mark and I didn't have a guest here, so we've responded to some of your requests that Mark and I talk about some of these things in more detail ourselves. If you have any topics that you want us to talk about, please shoot an email to either of us; mark@quietlightbrokerage.com, joe@quietlightbrokerage.com or if you have a guest or you think you can contribute to the podcast, either as a seller, a buyer, or talking about some of your experiences or somebody that could help other listeners or the audience reach out to us. We're happy to help. Thanks for all the feedback on the podcast and the good reviews. Resources:  Quiet Light Podcast@quietlightbrokerage.com

We speak with Study Cat CEO Mark Pemberton about language learning outside of the classroom. As the corona virus causes schools around China to temporarily close, we consider the possibilities and limits of using apps and technology for language learning. Ross Thorburn: Hi, everyone. Welcome back to "TEFL Training Institute Podcast." I'm Ross Thorburn. Here, we usually bring you one episode every couple of weeks focusing on a topic.We usually don't do anything related to current events, but at the moment, the coronavirus, as you may have read in the news, is having a huge effect on a lot of students. A lot of listeners are also, like I am, in China. Today, we're going to do a special episode about learning English at home.To help us do that, we have Mark Pemberton. He's CEO of Studycat. Studycat's a company that makes fun and effective language learning apps for kids in English, Chinese, French, Spanish, and German. Before starting Studycat, Mark was also a teacher.In this episode, I asked Mark about how students can use technology to help them learn the language at home. Enjoy the interview.Ross: Hi, Mark. Thanks for doing this at such short notice. Obviously, over here in Shanghai, a lot of the schools are shut and a huge amount of the population's working from home. It's a really strange time, with the coronavirus, both for business and for education.Mark Pemberton: I was reading today Bloomberg saying that this is going to be the largest work‑at‑home experiment in the history of mankind. From our perspective, it's going to probably be the tipping point for home education.Realistically, people might not be back at school until after Easter. In the meantime, there is no way that people can't turn towards online education to fill that void. It will be very interesting times.Ross: Right. I guess a lot of studying from home is going to happen over the next few weeks and months. That's obviously not necessarily a bad thing. What are some of the advantages of getting students to study at home in general?Mark: To me, it is obvious that if you want to learn a language, the more touch points you have with that language, the quicker you're going to achieve fluency. The gold standard for language learning is to drop yourself, immerse into a new culture, and have to speak the language, which is exactly what happened to me when I moved to Thailand.If you don't speak the language, you can't order food. It's sink or swim. Therefore, take that assumption and build immersion around the learner. When the kids go home, you put the cartoons on in English. You put the radio on in English. Put music on in English. Surround the kid with English, and the kid will do the rest.A lot of parents would say, "I don't know how to do this." Or, "I don't speak English." That's OK. It doesn't matter if you can't speak English. You can create the environment around your child where they will acquire the language very naturally and very quickly.If watching cartoons is a part of that, if playing interactive games is a part of that, then even better, because there's not a lot of research or data about this.To me, it's obvious that when a kid is in a puzzle or doing some kind of brain‑teasing activity, where they're using all of their focus and concentration, then they're learning quicker than they would be if they were just passively watching a cartoon.Ross: I suppose as well as the motivation aspect of needing to learn a language with immersion. I guess you're also just getting fewer opportunities to forget what you've learned because everything will be recycled all the time. That seems to be a big advantage of learning on an app.For example, for a few minutes every day, compared with going to a class once a week for a couple of hours at a time. Anyway, learning at home also allows parents to get a lot more involved in their kid's learning. What are some advantages of getting parents involved in the language learning process?Mark: Our brand is connected learning. What we mean by connected learning is connecting the home and the school to get the best learning outcomes. There's a couple of layers to our connected learning.The first one is connecting the home and the school. The second one is connecting parents, teachers, and kids. The kids are at the center of the learning process. If the parents are involved and the teachers are involved, and they triangulate, that is very, very powerful.I've got pictures of me teaching back in 2001 in my school. I had this hardcore cohort of parents that came to every class, which was great because they helped me manage the class. They helped me translate sometimes.Those parents would go home and they would walk with the kids. They play the tapes with the kids. They do the homework with the kids. Those kids just excelled because they were recycling. They were doing more work than the kids that weren't able to stay home work to...What we're able to say is, put the CD on, put the tape on, sing the song. There's nothing else you could set them at that time. Whereas now, you can assign them homework on their favorite devices.You can track whether they've done it or not. You could see what they did or didn't understand. It's a brave new world of language learning. I wish I had all these tools when I was teaching.Ross: Do you want to tell us a bit about how parents can best be involved? Imagine that parents being involved can either have a huge positive effect or definitely also seeing have a negative effect sometimes on kids as well.Mark: The kids like it as long as the parents handle it well and don't do that overpowering, "You must do this, you must do that." If the parents play a role of like, "Let's do this together," the kids learn so much faster, and they're so much more fluent.The parents who got such clunky pronunciation, that the kids get this, "I'm doing this better than mom or dad." You get this nice dynamic going if the parents play it right.Ross: The teachers listening to this might not fit into this category, but there's definitely a lot of teachers out there who are less enthusiastic about integrating technology into the student's language learning. How do you think apps can make teachers' lives easier?Mark: When we started doing EdTech early 2000s, I thought that there would be technology in every classroom by 2007, 2008. Then I thought, "OK, well, this is going a bit slow. It's education, maybe it's because teachers are fearful of technology, or maybe it's because the ministers of education are too slow."Now, it's 2020, I would say, with the exception of China, education and the adoption of technology in classrooms have really hasn't progressed at all. Obviously, not all teachers, but why aren't most teachers embracing technology?I don't understand. I've heard people say that they find it cumbersome. Maybe it's the technology's fault. Maybe they find it's a distraction in the classroom.Maybe they find that it's hard to manage a class and manage a technology at the same time. When we were building [inaudible 6:23] schools, we were very, very aware of these issues.We never assumed that the teachers wanted their lives made easier. We assumed that the teachers wanted to be more effective teachers. They didn't want to do monotonous report writing.We don't want to waste time prepping for all these lessons. We don't want to waste time marking all these lessons. We want to walk into a classroom with the kids [inaudible 6:51] knowing the vocabulary. We can actually use their vocabulary in scenarios, in sentence building, in dialogues, and in fun stories.EdTech, I've always believed, has massive potential to level the playing field. Children can go home and learn at their own pace, at their own speed. They can do it again, and again, and again until they're comfortable with the language. Then they can bring that into the classroom and practice the vocabulary learned. I think that's a wonderful outcome.Ross: You mentioned leveling the playing field there, Mark. How can technology do that? What do you mean exactly by leveling the playing field?Mark: There's two layers for that. The first layer is, in a specific classroom, no two kids learn the same way. No two kids have the same personality. It always struck me that the silent kids that would sit in class, they would not speak for the first year, a year and a half.We're always trained how to deal with these kids. The way I dealt with them, I just let them be. They were never making any trouble. They're just very shy. They're only five years old.I remember one of the silent kids, after a year, a year and a half, put a hand up, walked over to me, and said, "Teacher, may I go to the bathroom, please? I'd like to use the toilet." This kid had never spoken one word ever but she had understood all the language. She can speak complete sentences when she was ready to do so.If you're shy and don't want to speak, how nice it would be at home, in your bedroom with the device, rather than being told to stand up and repeat this sentence, or make a sentence, or it's your turn to do this, your turn to do that. When I said level the playing field there, I was also alluding to profit on purpose.EdTech can reach parts of the world that other education solution haven't had the ability to do. You're seeing really progressive governments in Colombia, Uruguay, that are shipping devices out to rural areas, where kids can just start learning where they can't build schools.EdTech will be able to deliver education to the 1.5 billion kids that, right now, don't have access to education. Of course, they need devices to be able to do that. I believe that there will be a day where companies like ours will work with companies like Huawei and other major device manufacturers, and then major charities with big footprints like Room to Read.Then we can deliver these devices with loads of educational software uploaded, and then deliver these devices to the communities.Ross: I love that example of the quiet student just absorbing all that language. I also heard Stephen Krashen give an example of talking about, at a conference giving a presentation, and walking up to someone in the front row with a microphone and seeing the look of fear in their faces.He was saying that, as teachers, we hate being asked questions at conferences. That's something that we do with our students all the time.Anyway, your app, I believe gets used by a lot of teachers in their classes. You must have seen lots of examples of teachers in schools encouraging students to use technology at home and to help in the language learning. Can you give us an example of how that actually works in practice?Mark: We did a big launch a year ago in Shiyan with a group of 40 kindergartens. It went really well. The teachers complained that they didn't know what to do because the kids knew all the vocabulary when they came into the classroom, which always made me laugh.They did some really cool stuff. They would ask the parents to record the kids at home doing their app activities. We got all these videos of kids singing, dancing around the living room, really got lit up by the songs. They started getting the kids to sing the songs every afternoon at the end of class outside the kindergarten.When the parents arrive to pick them up, the kids are all there singing the songs and doing all these different motions and actions. The feedback from the principals of those schools was that the parents had stopped having to send their kids to after school to learn English because they were learning so much English in the school.The blended learning, the flipped learning was working. That, to me, is a success because you're saving the kid's time. The kids in China are not having much of a childhood. The pressure is on from when you're two, three years old. It's the same in Japan. It's the same in Korea.The pressure on kids to do a 7:30 start all the way through to 9:00 or 10:00 at night, when they're only four years old, I just don't think that's right. I don't think there's enough time for them to play. I don't think there's enough time for them to sleep.I would hope that by using their time more efficiently, they could get more rest, more sleep, and more playtime, which is what children need when they're growing up, especially their age.Ross: You mentioned that by using that flipped classroom approach, students learn more effectively and didn't actually need to go to after school English programs anymore. Can you imagine that time in the future when apps or other technology will eventually just replace teachers completely?Mark: Technology would never replace teachers. There will be books in classrooms for the next 50 years. There will be teachers in classrooms for the next 50 years.The notion that AI and robots and technology are going to replace education systems is a fallacy. Everyone should embrace technology as a tool to enhance your ability to teach. That's what it is.Human beings are very unique in the sense that we have this urge to teach. We have this urge to pass knowledge down. It's in our DNA, like it is in no other animals to pass on and to teach, the love to teach.We love teaching and we love being taught. The way that society is being built and developed with kids going to schools, I just don't see that changing in the next 50, 100 years.I've gone full circle as well. I've built systems in 2007. My mindset was, replace the teachers, replace the classroom, build systems that don't need teachers or classrooms. Now, I've come around to a much easier state of mind. If there is a classroom, there is a teacher.That's much easier to build and design technology because you all work together to get the outcome that you want. I'm not saying that the way we educate or the way we use education right now is optimal. I'm not saying that at all. I'm saying that it's not going to change.Ross: One other opportunity I wanted to ask you about, Mark, was with AI. A lot gets written and said about AI. Can you tell us about what you think the potential is for AI in helping language learning in the future?Mark: AI, I'm not so sure about this. So much hype about what AI is going to do in education. It's a lot of VC hype about that right now. I wouldn't be putting my money to have into AI. We use very simple AI in our systems for adaptive learning. We are able to see whether a child has issues with certain words.Then we simply use a very simple machine algorithm method to keep reintroducing the words in reward games. We pull trouble words out and we keep re‑displaying them to the kids so that they learn them. I think that's very powerful.I don't think that the brave new world that a lot of people are investing in in terms of AI is going to be as big as people are hoping it will be.Ross: Mark, thanks so much again for coming on. I also know that because of the Coronavirus, you've open up your app for teachers and students to use for free for the time being. Can you tell us how can teacher's listening get access to that?Mark: We've just released a campaign today, Ross, that we are opening up all of our language learning apps to all communities affected by school closure for free usage until this crisis has passed. If you go to studycat.com, you will see all of our apps available there to be downloaded.In China, we have a WeChat platform. If you search for Studycat, you'll find our WeChat platform. Fun English is available there on all Android devices, all iOS devices for the next month, for free. We've survived these things before with SARS. In the meantime, Studycat will do what we can to help you entertain your kids.Ross: Great. Thanks again so much for joining us, Mark.Mark: Cheers.Ross: For everyone listening, please stay safe. We'll see you again next episode. Goodbye.

James: Hey, audience and listeners, this is James Kandasamy from Achieve Wealth True Value-add Real Estate Investing. I'm here today with Mark Kenny, who's the founder and I'm not sure, the president or what's the title?   Mark: Yeah, well my wife and I together so we might have different opinions but...   James: Okay. Both of you run the King multifamily. But before that, before we go into the hot topics that we're going to discuss with Mark, make sure that you guys look at last week's episode where we had KK Singh being interviewed. KK has moved from a business owner. He used to own gas stations and laundry mat and now he's become a multifamily investor, which is a very, very interesting concept. Because I think any business owner, anybody who wants to know how that business is run and why he's using multifamily, why did he go into multifamily? And he didn't even pay tax last year just because of the multifamily investment. So you guys want to check out the last episode.  But let's come back to this episode. Hey Mark, welcome to the show.   Mark: Thanks for having James. Great to see you again.   James: Awesome. Also, I'm happy to have you on the show. So, Mark, he's a GP, almost like 5,200 units, out of that 2000 units where he's basically the primary active asset manager and he's also GP on another 3,200 on top of the 2000 units. And he goes across multiple markets, which is very interesting for me. I want to go a bit deep dive into that. You know, he's in Texas, he's in Alabama, he's in Tennessee, he's in Florida and I believe that's what I covered. Right. Mark?   Mark:  Georgia, as well.   James: Georgia. Okay, got it. Got it. Atlanta. Right. So yeah. So Mark, did I miss out on something about yourself? Do you want to tell the audience about yourself?   Mark: No, I mean, yeah, real quick. So I grew up in Michigan. I'm in Dallas now, so not too far away from you, James. But I was a CPA for a while, did IT consulting, which you and I traded some stories about that before about the IT side and I started buying small multi-family when I was 22, I was a senior in college. About two to four units and then my brother and I...I didn't know what syndication was. Syndication is the fancy word for raising money from other people for the most part and pooling it together to buy properties. I didn't know what that was. So I started buying two to four units. And then my IT business was doing pretty well. That was, I really had no time. I always, I'd say 80, 85 hours a week and start really doing the math.   I was probably 90 to a hundred hours a week and a lot of weeks. And you know, frankly didn't have any time for my wife, caused some issues and so she basically said, you need to do something different than what you're doing. And I said, well, yeah, I will. But you know you have to deal with me and we both love real estate. So we started buying larger properties through syndication. I invested passively first in a syndication with a friend of mine, said it makes a lot of sense and you know, why don't I look at doing it myself and that's what we started doing back in 2013.   James: Got it. Got it. It's very interesting about your story when you're working on a W2 job, especially in the IT tech industry. I mean, it's a lot of work, we put in long hours, right? It's a constantly changing sector, right? The industry is consistently changing. We are always driven by schedule and I was just talking to, Shanti, who's my wife and all and how our life has changed when we used to be in W2 every day, like Fridays when we can really open up our time, open up because from Monday to Friday we are like so busy working like [03:55unclear]  focused and where I used to work, we used to work remote as well. So after five, six o'clock we used to work like, you know, we have lunch, we have dinner, and we continued working with the offsite team. So life never ends. And now with real estate, it's so much of a difference. Now you own your own time and you're out on what to do and we can, you know, my traveling time in Austin is like 11 to 2. That's it because it's a bit of traffic.   Mark: Yeah. It's interesting, right? I mean, I actually started my own IT business 2008 so I didn't even have a W2 job since 2008. But I got in a situation where, you know, any project that came up and any unrealistic timeframe that was out there, I would do it. I would make the dates. So that's what allowed me to get more and more projects. I had a number of Fortune 100 companies as customers, but so even though I have my own business back then, I still didn't have the luxury of time. You know, I was always going somewhere, always doing projects and yeah, I'd be up, I sleep three hours a night, like consistently, that's all I would sleep.   James: I mean, you don't have to go by numbers, but did you make like almost a similar amount of money compared to what you made in real estate? I mean, it's a time versus money investment, right?   Mark: It's a great question because when I first started looking at syndication, I said I'm not going to be able to replace my IT income. And I truly, it was a mindset. It really was. I really did not think I'd replaced my IT income. It was pretty, pretty high at the time. And after three projects that I did in multifamily I stopped doing IT. I had not replaced my IT income at that point in time, but it was enough to live and live, you know, decent. And then we've done, you know, we've done 37 projects, whatever now. But I didn't think I was gonna replace IT. But yeah, we've far surpassed it. I mean a lot frankly, and the time we have, and I don't have to ask anyone to go anywhere or you know, things like that, you can turn it on and off if you want to. Where in IT, if you're not working, not making any money, you don't have that passive income.   James: So you have a very interesting life cycle because you were working in IT, a W2  job and then you went to do your own business but still in IT. And now you are completely a full-time real estate investor. So, so in terms of time wise, I mean from what we're discussing, I mean, real estate investment gives you the best return of time, right? I mean, you get really good pay and at the same time, your time is like, really low.   Mark: There is no comparison. You know, you mentioned about talking to your wife a higher life is different. I mean, my life has, you know, 180 degrees different for the better than when it was before. I was on the verge of, you know, I'm not sure, you know, Tammy, my wife wasn't only happy because of my work schedule and now we got to work full time together. Just like you get to work with your wife, which is great. And the time, you know, if I want to go somewhere and you can get to the point with multifamily or any real estate investment, you get enough of it. If you choose to go sit on the beach, which I don't want to do, frankly I don't but if you choose to go and do that, you get in a position to do that for sure. With IT, I wouldn't be able to, I had to keep working projects in order to make money.   James: Yeah. But can we go back to your mindset when you are working, not as a business owner, when you are working in IT? Because I sometimes analyze my own mindset when I was working, because when I was working in IT, I did look at Robert Kiyosaki's book and I could not read like a few pages because it just doesn't make sense to me, we are so busy working. What is this guy talking about business. And after a few pages I put it down and I forgot about it until recently I started reading it and I was just surprised that that book changed a lot of people, real estate investors' life. But I don't know, I think when you are working you're really, really working, you really don't care about the business side of it and I mean, I think it's up to your circle, right? Who are you mixing with?   Mark: That's a great point. I know when I worked originally at KPMG Consulting and I worked for SAP you know, did some Salesforce consulting and things like that. And you're looking at other people that are older than you at the time I started out, it was, you know, early twenties when I started out. And look at other people that are partners, for example, and you have this image, you're like, that's my lifestyle. I'm going to be traveling all the time and I'm going to be working seven days a week, which is what I did. And you know, and then, you know, some point in time, not everyone gets to the point where I was, where my point was. And my wife was pretty much ready to leave me if I didn't do anything. And that was a big eye-opener for me. But you're right, you get trapped in that circle of influence, right? And everyone's doing the same thing. And at that time, I aspire to be a partner and I would've made partner, I mean, made a manager in two years and things like that. But I would have been miserable, frankly. I would have been.   James:  So compared to the job security, I mean, I don't know whether there's job security in any job or not because there is no job security, right? I mean, when I was a manager, I used to hire and fire people very quickly just because of non-performance, right? So there is no job security, right? I mean, I use to work on a semiconductor industry for like almost 20 years and we thought we were going to retire there but we realize you know, during different economic cycles, the company doesn't really, you know, honor your loyalty.  I mean, there's no such thing. They have to make a business decision, they'll let you go if they need to let you go. There's no such thing as a company is going to be keeping you forever.    Mark: Right, right. That's true.    James: Right. So yeah, coming back to real estate venture. So 2008 was when you got into IT and when did you start your real estate venture?   Mark: Syndication; 2013 is when I first started investing passively and invested in a few deals. And about that time I started looking at syndication, but it took me almost a year to get my first deal. And it was partly, I was looking at other things too; self-storage and building custom development, you know, homes and things like that, franchises. I looked at everything. I was looking for something to get me out of the bad situation I was in. But it still took us about a year to get our first deal.   James: So did you stop work and start into real estate? Was it a step function or was it like a...   Mark: It is gradual; for me, it took me three deals. So I'm thinking, let me see, 2014 is when I think I got my first deal, I don't remember exactly. But by '16 I had stopped doing IT.   James: Got it. Was that a painful transition from a business owner to a real estate investor?   Mark: No, it really wasn't for me anyway. You know, I've always had a big fear of money and you know, I wish I did, but I always did cause growing up and things like that. But we had enough money set aside to where, you know, I looked at it, if I had to go back and do IT, I had so many connections at a time, I could get a job pretty much, you know, right away. I didn't want to, but I was like, okay, well, I have a transition I'm making here, but if I fail, that was my mind, if I failed at doing this and after taking a year to find my first deal, I was pretty skeptical. And then we started getting the traction. So I was like, Hey if I need to go back, I can do that. I don't want to do it. But if I do, I can support the family. The transition wasn't hard for me. We were buying at that time only in Dallas, so I really wasn't having to travel outside Dallas. Yeah. So it was a pretty easy transition.   James:  Got it, got it. So as I was talking about that, you had like three different lifecycles, right? You're a W2 employee, you're a business owner and then you become a real estate investor and you are a CPA. So I'm going to ask you, similar to CPA question, how was your tax advantages comparing these three life cycles?   Mark:  Okay. So you know, even though I'm a CPA, I haven't practiced for 20...   James: But at a high level, was there any tax benefit between...   Mark:  Oh yeah. Without a doubt. When I had the IT business, you know, I was actually paying taxes quarterly. I was getting hit hard. I mean, I was making decent money. Now, in the last two years, we haven't paid any federal income tax like zero. And in fact, it's negative. So people were like, Oh, you didn't make any money. No, we make money. But from the tax benefit we received through depreciation and cost segregation and bonus appreciation, we pay zero federal income tax. So, I mean, think about people listening to this, if you didn't have to pay taxes, how much more money you'd have in your pocket and what you could do with that?   James: Absolutely.  Yeah. Yeah. I have a chart that shows how a $2 double for the next 20 years. And you know, at a 25% rate, that $2 becomes 72,000 after 20 years because you're taxed 25% every time you double, right? But if you don't have tax, that $2 becomes almost like $11 million, you know.   Mark: Oh, boy, Oh my goodness.    James: So the tax does impact your compounding savings. And if you don't look at it, you may not know. I mean, when I was working, I never really looked at tax because as I say, we are busy working. We just look at net pay coming to the thing. I mean taxes, like it's not nice for me. But when I look at that kind of chart, you know, it does make a lot of difference in terms of, Hey, you know, it does impact your overall savings. You know, if you compounded for not [13:53unclear]  you see a big difference, millions of dollars of difference.   Mark: Oh yeah. And like you mentioned, when you have a W2 job, it just comes out, you notice it, you don't like it. But when you have your own business, my own IT business, you have to write check every quarter you really notice it. And then you're like, I made that much money this quarter and where did it all go? And now I have to write a check for, you know, X number of dollars. And you know, you're just scratching your head and you're frustrated and stressed out. But with real estate, it's literally zero.   James: So did you have employees under you when you have a business?    Mark: All 1099.  James: Okay. So if you have an employee, then you're to pay tax for them too, I guess. So that's double taxation   Mark: That's exactly right.   James: Okay. So W2, I mean, I don't know. I have a chart that shows W2 people are paying almost 70% of the tax in this country. So this country is supported by people who are in W2. They are the ones who's paying taxes. They're the ones building the roads, the bridges, and all the infrastructure. Right? The 30% is from the other people who are earning less than 30,000 or people who are earning more than 500,000 and above.   Mark: Yeah.    James: Right? I mean, people who are earning more than 20,000 to pay a lot of taxes. But in general, if you look at it, the big bulk of it is paid by our W2 employees.   Mark: Right. Makes sense.    James: Just because you can't run away.    Mark: You can't. There are no savings, no tax shelters.   James: Absolutely. I'd say real estate investors, all kinds of you know incentive in the tax code to not paying taxes. So coming back to your real estate venture in multifamily, and you skipped over buying single-family and you went direct to multifamily.   Mark: We did. I mean, multifamily, two to four units when I was 22. Yeah. So it was smaller for sure. It made more sense to me, frankly. I don't remember, I actually didn't look at any homes. I don't know why I'd go back and think about that. Why I didn't start looking at any single-family homes. To me, we looked at two to four units at a time.   James: Well, I mean if you look at cashflow, two to 14 definitely make a lot more sense in terms of cash flow. Right? Maybe that's what it is. And how many two to four units did you own before you come to multifamily?   Mark: We had like 17 units total.   James: Okay. 17 in two to four units, I guess. Smaller multifamily. And do you think that helped you when you scale up?   Mark: It did. Because I know you manage, right? You and your wife manage. When we did the smaller properties, we self-managed and we took care of things and evicted people. So it definitely helped from that perspective. I didn't like the process, it's not something I want to do now, but it also, even though it's drastically different how you evaluate four units and below and in five units and below is drastically different, people can argue all day long steps are almost identical, right? You identify your criteria, you go drive by a property, contract, blah, blah, everything's the same. So it helped for sure. Plus just kind of, you know, getting comfortable with buying your first deal is the hardest. So once you start, you know, I bought like whatever it was, you know, five deals, six deals, I don't remember the number, exactly.  It gets you more comfortable. So when you go buy a larger property, it's bigger numbers. So it is concerning whatever I had already done, you know, like six transactions before that time, even though they're small, it helped.   James: Got it. Got it. I mean, in a way, it helps because I mean, you know at least how to read the lease and you probably know how real estate section happens, right?   Mark: Your first time signing for your first deal, usually you're most likely going to be pretty freaked out, right? You've done six smaller deals. It's still, then when you start doing bigger deal, then it's the money. Right? The only thing that concerned me, you know, I have to say only it really was the, you know, brain capital to the deals. I had no concerns about how to underwrite the deals that I knew how to do that or how to find deals or talk to brokers or loan. It was always about, you know, the capital. That was my biggest concern.   James: Okay. Okay. But do you think that's still an issue in this market cycle?   Mark: Yeah. I'm always concerned about capital. You know, we have like eight deals under contract right now. You know, so we've never not closed a deal, but you know, that's the one thing that's still stressing me out sometimes, frankly.   James: Yeah. Because you need to figure out whether you have big enough investor base too in all those eight deals.    Mark: That's right.    Mark: Okay. Got it. So coming back to this, no multiple markets that you have, I mean, do you want to explain on how did you get into this so many markets? I mean, I think some of it is you've partnered with some of your students, right?   Mark: Well, originally I was just buying pretty much with one other person off in Dallas. Dallas, and at least, in my opinion, was definitely getting more expensive and it's even more expensive now. I have a twin brother that moved to Atlanta so I used to visit him and Atlanta has a lot of similarities to Dallas. Dallas is yet, and it may never be, but it definitely has a lot of similarities. So I started traveling there. I looked at properties for about a year and a half before we got our first deal. And I just really like the market. That kind of was if my brother wasn't there, I don't know if I would be in Atlanta, frankly. I don't know if I would have thought about going there. When I'm going there, I see a lot of activity, new buildings, new development cranes, things like that. So it was an attractive market.    And then, so that's Texas and you know, kind of the Atlanta area. And then we started looking in the Southeast. This is a general statement. Some of the brokers cross different estates sometimes too. They might, if they have a license, they can actually sell in multiple States and they might say, Hey, now, we're in Tennessee, we have a project here, we have a project up in Arkansas now, which we don't own anything there yet. So these brokers started giving us deals and I started checking out different markets. And really, the way I got into the other markets as far as initially was I would have brokers in Dallas typically reached out to other brokers in other markets and make an introduction for me. And that kind of gives you instant credibility and they're going to typically give you the best of the best of brokers to work with in another market. And that's how we got involved in other markets.   James: Got it. So how did you choose this market? I mean, except for Atlanta where you said your brother was there, you initially went there because of Atlanta, but now you are like in five different markets. Tennessee, Alabama, Florida. I mean, now, how did you choose these markets and why these markets?   Mark:  Yeah. A friend of mine who I've done a lot of deals with, he had bought a smaller deal in Memphis and I never would have considered Memphis. And some people don't like Memphis. We own a lot there. We've done really well there. But Memphis also has, you know, even though [21:05 unclear] job growth population growth, things like that, it's okay, but not like Dallas, of course. But the rent growth has been going up. They're putting, you know, several billion dollars in investments of downtown. But that particular city also has something called a pilot program, which we've done multiple times. Where you can go in, you buy a multifamily property, you have to put a certain amount of capital into it. It's a lot. And then you'll get your property taxes cut in half and then they're frozen for 20 years. So I mean, as you know, property taxes is typically one of the largest, right?  [21:44unclear]  I can freeze them for 20 years. Cash flow is going to typically be pretty nice on it.    James: Hmm. So you're basically taking advantage of that particular program. What about the other States that..."   Mark: Yeah, Florida, I always looked, I like Florida just because of probably the weather initially and when we were in Atlanta we started looking in Florida as well. And Florida has, I mean, some areas like Miami that as you probably know are extremely expensive, just not going to buy there. But I also have a cousin, multiple cousins actually live in Florida and so I heard different things from talking to them. And then some of the brokers we were talking to like in Georgia and stuff like that, had some properties in Florida and a property came up and the first time we're looking at properties there. I liked the properties in Jacksonville and we have a few properties there now. And it was one of those markets, again, similar to Atlanta, job growth, population growth, rent growth. It doesn't have to be off the charts, frankly.    Some of the markets where it's so off the charts, it's just too expensive to buy in, the yields. You can't get the returns. And then with Alabama, it was a guy that had a deal and was looking to partner and I partnered with him on a few deals. He had deals there in Alabama. And then we have another one right now, a guy in our coaching group that has a deal in Alabama as well. He's closer over by there as far as that's where he'd been looking. So usually it's through some sort of relationship. Somebody either already lives there or someone is looking there and then it kind of gives me an opportunity to check the markets out.   James: Got it, got it. So basically if you have boots on the ground as part of your program, that's an advantage definitely. Right?    Mark: It is for sure.   James: But don't you find, you know, establishing broker relationship in that kind of market it's harder because you, I mean they did not know you, right?   Mark: It is, there's no question. I mean, you know, I think that's why it took us so long to get into Atlanta. We had a really hard time breaking in there. And then once we got in there, you know, it was just one brokerage firm in Atlanta that we closed 11 deals in like 18 months with. We've definitely had their attention. With that first deal., I went to Florida. I mean, I was banging my head against the wall because we couldn't get any traction with brokers there. I would say, you know, you just keep sticking with it, but there's no question, you know, if you're an outsider, don't live there and you've never bought a deal there, you're at a disadvantage. You can use things like, Hey, your track record and you can have brokers that I know.    So when we got a deal in Florida, our first deal, it was with a brokerage firm that I had bought a deal in Dallas with and the broker in Dallas had called me about it. So he, you know, if you want to say put a good word in for us. So a lot of these brokers talk as, you know, it's very small world. Yeah. And I don't think we would've gotten that deal in Florida if I had not bought a deal without a broker, you know, brokerage firm if you want to stay in Dallas, I think we would have probably not been selected for that deal.   James: Got it. So let's go a bit more detail into that step by step. So let's say today somebody, you know, in your circle or one of your students come, Hey, you know, I found a deal in Florida, right? Somewhere in Florida, right? So what are the things that you would do to underwrite the deal?   Mark: Yeah. You know, the underwriting different aspects of it, forget the reports and stuff for a second. But you know, even financing terms can be drastically different across the country. Some of the pre-review cities and stuff like that start at 65%. So you want to first understand, don't assume we're getting 80% leverage in three or five years IO in every single location because it's different. So understanding first, the insurance can be drastically different. You know, if you're on a coastal area, it can be a lot higher than all the other areas and understand kind of the fundamentals there.    Taxes, you know, do they get reassessed? And that can be through, we have a tax consultant we use, but also you can typically just call the County and the County will tell you kinda how the taxes will be reassessed and when. You know, in Memphis, that's every four years so that's important to know. They only reassess every four years. And then we'll get like a report, whether it's Yardi or CoStar. Those are paid reports. We'll also use things like some free...we have a number of links on our analyzer that take you to things like crime and the school districts things like that. Those are all links we have on that. But overall, nothing beats having someone on the ground, you know. So if you can talk to other people there and talking to lenders, you know, lenders have the biggest investment in a deal than anybody as a general statement where they have more money involved. So try to understand from lenders to kind of how some of the properties are performing there, it is important. In the report, as I said, it's only as good as the report. It is good data. A lot of it's based on, you know, actual transactions that have happened, but I'm trying to get someone like a broker or property management company. So if we have a property management company you know, David Shore is multi South in Memphis and he's in seven other, he's actually in seven other States.   Once we built that relationship, then we start asking him questions. He'll tell us, don't even look at that deal, it's not a good deal. This deal maybe you can look at, you know, 95% of deals he tells us not to look at there. So having some boots on the ground can't be replaced. It might take you a while to do that. It's typically going to be like a management company or maybe, you know, a broker, but you know, brokers in to sell, you know, they wouldn't, don't get paid unless they sell a property. So kind of all the different aspects. Reports talking to people, visiting the area, trying to understand what happened before in the past. Those areas are all good ways to kind of get more Intel on the property.   James: So you basically look at location, crimes, making sure how are you underwriting your tax records.    Mark: The tax is huge.   James:  Every state is different.   Mark: Yeah. Every state, county; city even sometimes. So we have like I say a tax consultant, but we have found really if you call the County and tell them the property what you're doing, they'll tell you how they reassess and they'll give you a good number. And we've only had like a couple of occasions where it hasn't really given us the information we want. Generally speaking, we always get the information we need from the County.   James: Got it. Got it. So who have told you the most knows? I mean like who say don't touch that deal most of the time? Is it a property management company or is it the tax consultant or insurance company?   Mark: Property management company. Without a doubt. It may be they don't want to manage it.   James: Well how do you know they just don't like that property. Maybe it's just because...   Mark: I know you self-manage. We have found in almost every submarket we ran with a management company, even if they don't manage a property today, they're like, we manage that property five years ago and you know like in that, you might have some Intel. We got a property here where a number of properties in Dallas I've looked at and our management company managed it. So I called the guy and said, Hey, what's up with that? And he'll say, you know, it had like $200,000 of plumbing issues or whatever it might be. But usually someone that's large in a submarket, they know the property or they at least know you know the area well enough to give you some really good Intel and it seems to amazed me where people are like, well, THE manageMENT company says we can push rents like $75, I think we can do it like by 125. it's like there's no basis for that. Like why do you think you can do that?    You can push your management company and ask them questions and things like that. You know, if I go try and do a comp for a property myself, I don't fit the demographics, I'm probably not going to get a good comp. Have a management company do it for you. They'll actually send people out there that fit the demographics. They'll actually get you comps and pictures and things like that. Go into some of these reports...I get called all the time from, I won't name them, but these providers of data call me all the time. I don't talk to them. And half time the information you get, you don't even know if it's right. It's coming through there. So, yeah.   James: So how do you know the management company that is calling is not the current management company?   Mark: Yeah, it's happened before. You know, you can ask the broker who managed it today. They'll tell you because it could be for sale and the property management company doesn't even know it. And if you call them and tell them, Hey, I'm looking at this property for sale, then they're going to be pretty upset.   James: Yeah. I've looked at out-of-state as well at one point. And I realized management company gives me the best quick data. They can tell me a lot of things about a state compared to anybody else, right. Because they know the pain of managing it. So yeah, I would say they are one of the best resources to call if you're looking at out of state investment. So after that, what do you do? I mean, you already looked at taxes, you already looked at the property, so it's all good. So what do you do next?   Mark: So then we'll underwrite it. Usually using, you know, we have a quick analyzer. We have a much more detailed analyzer. In the detailed analyzer, we're going to go through every expense category, like line by line, compare them to the, you know, T12. We'll try to get two independent property management budgets so we get that. And then our analyzer also has industry standards based on property, class, and size. We'll tell you what the standards are for every single category. Which is very helpful to see if something's out of whack. You know, I just had an example. Somebody not in a group, if someone's sent me something, it was two properties. It was over 300 doors together and they had payroll at $750 a door. I'm like, no, it's not going to happen. Or we're going to share the property manager on-site across the two properties and might not for 300 plus units, we're not going to, not very easily.  So I said, okay, so does the management company say they're okay with that? No. And if they did, what happened was that if you have to get rid of them and now you're going to bring in another management company, they're going to be at $1,200 a door. It just happened, another one today actually on something where they're getting charged two and a half percent on 80 doors. I said that's pretty low, two and a half percent. I'm not saying it's impossible, but you need to probably bump that up because just because one management company said they'll do it for that, if they're not your management company anymore, then you're going to be paying more.   James: Yeah. Yeah. You can't underwrite just because one person said it. I mean two and a half is really low compared to any industries. Whenever I see sponsors or syndicators showing me a deal, I mean, not many people should me their deals, but I do get to see some people still.  I mean, when they say they want to share management, that is an indication that you know that deal doesn't have that much upside. They have to do really, really creative weird stuff. They will share this, share that, we have to do. [33:15 unclear] covered parking. We have to do washer dryer and that's all that really small amount of upside. And that is not a good deal.    Mark: That's just the gravy. You're exactly right. I mean, you know it, right? You manage your properties and people are like, I'm going to share. I was like, you're not going to. I mean, if you think it was that easy, don't you think all the management companies would do it?    James: You're going to compromise a lot of things when you share management. And as I said, when you're going to that extent to really justify your upside in the deal, that means the deal is really not a good deal.   Mark: Well, James, I have people who'd be like, we're going to put in like wifi and charge this and they're trying to put that in an underwriting and I'm like, yeah. First of all, you might not be able to because of the cable contract. Right. You might not be allowed to, and second of all, let's just assume you're able to do that, is that needed in your analysis to make the deal work? I sure hope it doesn't. You know, it doesn't mean that.    James: Those who are learning this business, the biggest bulk of the deals that work is when you can bump up rent and you can reduce expenses if you can do these things is a big thing. So if you see any deals that you can, majority of your upside comes from here. You know, I don't look at adding more one or two washer and dryer, adding parking, adding wifi. That's what you said or sharing management. That's all right. Really the deal doesn't work at all. I think the sponsor's just trying to squeeze all kinds of juice and tell you that it's going to work, but in reality, it is really, really hard to make all that work. I mean that all that is just a bonus. If it works, it's good.   Mark: Yeah, that's exactly right. And your total expenses, you could go up because the property taxes, but you know some of your points of your own, you reduce the expenses. I mean there are huge savings in water lots of times for operators. You can go in there and do repair and maintenance. We see lots of times you do as well, I'm sure were people are putting capital items in repair maintenance and they're like $1,400 a door per year. I mean that's a really high, right? So they're just putting stuff up there. If you go in and get a loan you're able to put capital in there and maybe do roofings and a/c and things like that, you can most likely bring your repair maintenance down more to industry standard. So for looking for those things, but if you don't know what those standards are, you know, you don't have any gauge.   James: Sure, sure, sure. So we don't have to talk about your detail and analysis that you do, but on the sniff test that you have a quick analysis. So one of the few things that you would look at to, you know, kick out a project   Mark: Return wise, I'll look at, you know, we still shoot for like a 10% cash on cash return, which is getting harder   James:  10% with the IO on year one, I guess.   Mark: Yeah. Overall or if the product is a five-year project, 10% cash in cash, 15% plus IRR and 100%; 100% is getting harder on five years, frankly for a lot of properties, closer to six.  In some markets, it's more than that, but usually we try to stay in six and below to double the money. And then I'm looking at other things like, you know, what cap rate are they using? You know, on their exit, how they get the current cap rate, the broker. I mean, I had someone, no joke, in Florida called me and said- it wasn't Miami, by the way- they said, Oh, the broker told me the cap rate is 3 and a half. You know what I mean? So those types of things, right. So you can make any deal work. It's on a piece of paper,   James: Just change the exit cap rate.    Mark: Exactly right. I have an example, I do in our workshop where I'm like, you know this, and then you do the cap rate down to two, what does it do? And then, you know, other things are going to be more round, you know, total income growth over the first couple of years. What does it look like? You know, I'll see sometimes people think we're going to grow income 30%. I'm not saying it's impossible to do that, but I see a property as, you know, 92% occupied and you go up 30%, your total income in a year is pretty high so you need to have justification for that. So basically we look at a lot of different gauges, break-even occupancy, break-even reds and then the financing. You know, people don't understand financing well enough. Lots of times as far as what the hell they're going to do that.   James: It can make or break a deal. Right? So let's look at like the rent growth and the exit cap rate, right? So how do you differentiate these rent growth and exit cap rate on this like five different markets there?   Mark: Well the market cap rates, so we always start with the submarket cap rate, doesn't matter which property it is. And we have different ways to get that through reports and things like that. And then we put an escalator on it, an annual escalator, and it'll be different between ABC assets. And we have some ranges there. Some markets actually, you know, Dallas has gotten compressed so much on class C, you know, it was like eight and a half percent in '13. Now, it's like five cap for a lot of properties and you don't know if it's ever gonna go back. So we'll usually use you know, minimum 0.1 up and then up to a 0.2 for a year. So it could be, you know, full a hundred basis points on a five-year exit and a lot of it's depending on the property and location.    I mean some of them, some of the markets that the cap rates the banks compressed there but they haven't compressed as much as like Dallas. I mean they might've been..I'll just make an example, say Dallas eight and a half. Now it's five and the market there might have been seven and a half and now it's six. So it went down, you know, one and a half percent total. But we'll actually, we'll look at the property, the type of property that, you know, the age of it as a class and then the demographics and we'll add an escalator on an annual basis for it. So each year it escalates up.   James: But how do you decide that? So for example, I think in Texas a lot of people uses 3% rent growth, right? Even though some cities are different.   Mark: Well, no, for rent growth we usually use 2%. This is across the board, across all markets after year two. Your first two years as you know, you might have come in and you're increasing rents, rephase revenue in and things like that. After year two, the general statement is going to be 2%.    James: What about expenses?    Mark: Two.     James: Okay, so 2% income growth. 2% on year two onwards I guess. Which makes a lot of sense. I mean, you're not really counting for the first year for value add.   Mark: Right and it might be higher. I mean some people were like in Dallas, you know, seven and a half percent rent increase growth for a while. And people were like, I'm like, but that's like today, one point in time it's proved where, you know, Dallas rent increases have gone down considerably. It's still a great market, I like the market. I don't really buy here right now, but you can't count on today. Or someone will say, Hey, the economic vacancy is 6% and I'm like, yeah, but I mean, good for them. But you can't count on that.    James: You can't count on that. Yeah. Yeah. So yeah, I mean, yesterday there was a national multifamily trend report which shows I mean Dallas is below national average in terms of rent growth, right? So San Antonio and Austin, Austin has been always higher than national rent growth but San Antonio is higher than national rent growth. I never seen that San Antonio being higher than Dallas. I mean it's just cities change. You have to be really conservative in your underwriting.    Mark: I think people are like, enough is enough, right? When rents go up, you know, seven plus percent for a few years in a row, people are like, you know. And it doesn't mean it's a bad, bad market. I mean, there are 150,000 people a year here that moved to, [41:07unclear] you know, net. So there's great jobs and population growth. I've been arguing that for a while. It doesn't matter all those things happen. At some point in time, people will say enough is enough.    James: Yeah. People can't pay anymore.   Mark: In a 2% increase in their wage or whatever they get in 7% in rent, you know, four years in a row, it has a big impact on them.   James: Absolutely. Absolutely. But how do you like for example, in your experience, because you're working on multiple markets, right? I mean apart from Texas, which has seen a good rent growth, I mean, I think even Florida is seeing a good rent growth. I do not know what other markets house in Tennessee, Alabama and I think...   Mark: Georgia is good as a whole. I mean some markets and we bought in a place called Gainesville, Georgia, not Florida. The property has done phenomenal. But that's a secondary market for sure. It's about 45 minutes from Atlanta, but it's like, you know, a 7% rent growth right now. Same with Dalton, Northeast, you know, almost close to Chattanooga rent growths. Florida, like you said, is high; parts of Georgia is definitely high. Alabama and Tennessee, I would say are mediocre, frankly, they're just going to be average. Now, Memphis in general, the random amounts are lower, but the rent growth there is quite high right now from a percentage standpoint. But you know, the starting with rents, half of Dallas, wherever it is, right. So it's proportional, but the percent of rent growth in Memphis is actually quite high right now. The last I saw, it was in the top 10 in the country.   James: Oh really? Okay. Okay. And what about the exit cap rate? Right. So usually, I mean the usual underwriters, people use like one, to 0.2 more than what the market is. Do you use the same exit cap rates in the other markets?   Mark: We take the current and we'll add...so let's say the current was a six cap, we'll add 0.1 per year, 0.20 per year. And in some cases like to your point, and so like that's to the end of five years, you would've gone from a six to a seven. And in some markets, yeah, we'll be, you know, if we're going to be doing a 0.15 in a certain market and we're like, well, maybe this market isn't quite as attractive or in the past it hasn't performed quite as well, we might do the 0.20. At the end of the day, I mean, as you know, nobody knows what the cap rates going to do. We can all guess. And the important thing to consider is that you know, the cap rate has no impact on your cash flow per se. It's really more of a capital event like a refi or a sale, things like that. So if you can still cash flow and you know, get good returns, then you know, you wait to sell when it makes more sense to sell.   James: Correct. What about a loan wise? Have you guys been doing a longterm agency debt or you've been doing some short term loans as well?   Mark: We do about a third of the deals we do prior bridge, but not necessarily short term is still up to five years. So it's not short term really. And the rates are attractive and there's, you know, a lot of advantages too. Bridge and some disadvantages, but there are a lot of advantages. I like them, especially in the big value add deals from what you have to get them. And then we do Fannie, Freddie, and then a number of bridge frankly.   James: Got it. Got it, got it. So I mean, you work with a lot of you know, students who are trying to come up in this industry, right? So can you describe one characteristic of a student who made them really successful you know, sponsor on their own?   Mark: Okay.  Characteristic is, I mean, you know, if you want to say grit, not giving up, but as far as a whole, it's getting really good at something that really, you know, one skill set. You don't have to know everything about multifamily necessarily to get started. You have other people there to help you. But getting really good at something that's a value to somebody else. And it sounds like, okay, that's kind of obvious. Well, we've seen it work time and time again where someone, all they do is pretty much come in and just find deals. That's where the specialty is. They don't want to raise money or sign the loan or know things like that. But I think it's being patient, you know, when you have to wait a year, potentially. I waited a year to get my first deal. That's a long time, you know, to wait. And then you look back on it, it's like, that's not a long time to wait when you started buying more deals or you're like trying to do something new and you're spreading, you know, 12 months before you get a deal that can be frustrating. So just being patient.   James: Yeah. Especially when people are already committed, I'm going to do this.    Mark: Yeah, some people give something up to do it.   James: Yeah. I mean, I really just remember there's not much deals out there. So, you know, finding that one deal that makes sense takes time. Right. It's not easy, If it was easy, everybody would do it.   Mark: That's right. That's right. Okay.   James: So coming back to your personal side of it. I mean, is there any proud moment in your life that you think I would remember that moment? That one particular moment in your experience in your real estate venture?   Mark: Yeah.  That's a great question actually. I would say when I got that third deal and it closed because I had already decided if I close that deal, I was going to stop doing IT. So when I got that third deal and said, Hey...my son kept asking me cause I kept looking for deals when he's like, if you get that deal, can you stop doing IT? Cause he was seeing me work so much. And so when I got that that was huge for me, for my family.   James: Got it. That was a transition point of view, getting away from IT to real estate, I guess.    Mark: Right, right. And making the decision, like you said, to do it full time.     James: Yeah. It's a hard decision, especially if you're already used to a certain industry. And what has been, you know,  paying your bills, right.    Mark: Paying your bills, which is great. And you know, the other thing, unfortunately, when I was doing IT, that was kind of my self-worth. That's where I got my value. I wasn't really good at a lot of things, but for some reason, my mind just worked that way. And so I got my self-worth out of my job. So to give that up, you know, it is a big thing. And you don't know how successful you're going to be or not in your new adventure. So, but I mean, the best decision I ever made.   James: Yeah. I mean, you brought up a good point. Sometimes that whole industry, what you study for, define you 20, 30 years in your life and suddenly, you are changing your complete identity. I mean, it's a big thing, right? I mean, a lot of people do not want to do that. If they're known as engineer or a CPA or the IT guy, they don't want to know, what! Suddenly this guy's doing real estate.     Mark: Oh yeah. I mean, my CPA said, what are you doing? He did. Now he doesn't say it anymore. He did. He said, what are you doing? You're making a lot of money doing IT, why are you not doing it anymore? I mean, you know, he couldn't even comprehend it.   James: Yeah. And I have to mention this; when I was in IT, when I was an engineer, you know, I always think that people in IT, people who are engineers are really smart guys. So these are the smartest guys because that's what your circle is, right? Your circle of friends is there. You think this guy's smart solving problems. And I mean, I did my MBA, it was really eye-opening because I realized there are a lot smarter guys than me with a lot more money in the financial industry. So that was a big aha moment. And that's where I realized that you know, you have to go into business to make a lot more money. And there are a lot of other smarter guys in other smarter professions out there that make a lot more money. And so, I mean, before I forget what is the most valuable value add that you've seen in all your deals? What would you do in case your rehab budget got cut into half in a deal?   Mark: Oh, you mean from a CAPEX?    James: Capex wise, yes.   Mark: You know, one, people need to be...if the property looks like junk outside...I've been in properties that look good on the outside and they're not that great on the inside. But you need something outside to kind of attract you. And it could just be paint, you know, something so it's not dreary and dark, dark colors, you know, but using something a little bit more attractive color-wise for paint. Landscaping, simple stuff to do. It's basically thinking about what does a tenant see? When people say I'm going to do, you know, electrical work and you know, things like that. It's like the plumbing, stuff like that need to be done, but tenants don't see that. So first start with the outside and see what the tenants, you know, whether they go up to the office and it's kind of decked out.   Sometimes we'll spend a lot of money around the office to kind of put a lot of landscape in there and make it really nice, exterior wise. Interior, I mean, paint, it's pretty easy to do. Flooring is huge just from a maintenance standpoint. So if you can do it, but as you know, it's not that cheap to do floor and then we'll like resurface countertops. I wouldn't do cabinets and stuff like that if you don't have the budget for it. I wouldn't do appliances unless they need them. You're not going to get the bang for the buck for that. Again, people will see paint, they'll see flooring and they'll see like maybe surface countertops, paint the cabinets, things like that. But some people have really high aspirations. They want to do all these things, but at the end of the day, you're not living in the property so don't outdo the market. I won't be the first guy to prove something in a market, I let other people prove it first. But I would say for sure start with the outside. We start like with landscaping and paint, stuff like that. People can see that.   James: Got it, got it. Awesome. Mark. So we're at the end of the podcast. Do you want to tell our audience and listeners how to get hold of you?   Mark: Yes. An email address is Mark@thinkmultifamily.com and love the chat with anybody and I really, really appreciate you spending time with me today, James.   James: Sure, sure. Absolutely. Thanks for coming over. You had a lot of value. And I really like going across markets here because sometimes it's hard to find someone who has done deals in different markets, right. Because it's important. A lot of people want to do markets everywhere. I mean, there are deals everywhere so you just have to buy it right and you have to analyze it right. And, you know, just make sure the numbers work and the location works. Yeah. Awesome. Thank you, Mark.    Mark: All right, James. Appreciate your time.    James: Absolutely. Thank you. Bye.

One of the privileges we have as the owners of QLB is that we have a panel of experienced entrepreneurs that act as advisers and also happen to be our brokers. On today's episode, we are hosting our first Podcast Panel, these in-house experts are here to answer key questions regarding buying and selling. Jason, Bryan, Amanda, and David have a combined 40 years of experience in brokering e-commerce businesses and are here to share some great insights into their first-hand transaction experience. The discussion today focuses on the sell side and how human behavior can influence a transaction, balancing being a good seller without being a pushover, and finally on valuation and managing expectations from the seller side. Episode Highlights: Can a seller increase their sales amount just by being a good seller? How to handle challenging sellers and tips for approaching the negotiations with them. Thoughts on where seller behavior fits into the entire valuation process. Some of the principals of a good seller and behaviors they should avoid. Where the line is between two being too private and being proactive as a seller. Ways certain SaaS elements can be revealed in due diligence without giving away too much before the handover. Specific contingencies that sellers can hold onto until the signing. The importance of the buyer/seller face to face meeting. Things sellers tend to put too much emphasis on during a transaction. Staying on for extra consult periods as a way to earn buyer trust and confidence. How to temper unreasonable valuations or unreasonable expectations for what market can bear on the part of the seller.   Transcription: Joe: So Mark one of the privileges that you and I have as owners of Quiet Light Brokerage is that we have an unofficial board of directors and highly successful entrepreneurs that are our advisors slash brokers. And we joke often that most of them are more experienced and smarter and more successful than we are. And I think with the panel that you put together in this upcoming episode it's absolutely true. We've got Jason, Brad, Amanda, and David all sharing their experience as advisors, brokers about how to be a good seller and beyond that with the entire transaction. How did the overall panel go? Did everybody behave and give nuggets of wisdom throughout the whole podcast? Mark: Well, naturally I started this all first well it was a pretty interesting idea. I was talking to Amanda about going to a conference down in Austin where she lives and she was invited onto a panel and she said that she'd be really interested in doing stuff like that. So I thought well why don't we do a panel here at Quiet Light and bring forward some of the advisors that have been working on deals. I mean I think the combined number of years on that panel alone was something like 40 some odd years of experience combined. Joe: As buyers or entrepreneurs? Mark: I didn't even get into the; I have no idea how to calculate that. That'd be a much bigger number. My math abilities stop after about 40, 45. Joe: So everything is 40 years of experience for you. Mark: Well I become 42 so yeah everything is; that's going to be the limit. Every year I add one number to my math abilities. The panel was pretty fun. I didn't know how it was going to go. I didn't know if it was going to be too many people on the panel. I was hoping for some discussion between them and we did get into that. We got some great discussion between people who have been doing this for a really, really long time. I wanted to keep the topic pretty simple and just kind of dig into their actual experience in doing deals. I wanted to find out what are they seeing on the sell-side specifically and working with people; humans that can really influence a transaction by their behavior. How much are they seeing that actually come into influencing the price? Jason right out the gate is like look we can sometimes influence the price but the bigger worry here is having a primary effect. If you're a crappy seller you might make this an unsellable business. And that kind of launched off this conversation of what is it; how can you be a good seller? How do you balance this idea of being a good seller who is open and proactive? David talked about being proactive as a seller. How do you balance this proactivity and openness versus being a pushover? What elements should sellers also not necessarily open up on their business right away? And where should they stick their foot down and say we shouldn't be sharing this? A pretty interesting conversation on that front to see what other people's experience was in these different questions that came up. I didn't lay it out right away. Joe just to let you know I asked them to pick out a URI moving forward for the company and I won't tell you what the result was of that. Joe: So I have to listen to this to get the answer. What was the question again specifically and what wiseass comment did Jason make because I'm sure that's exactly where it came from? Mark: You're going to have to listen. Joe: Alright. What was the question though? Mark: The question was choose Joe or Mark. Joe: To do what? And you're like hosting the podcast so you could totally edit it out and tell them no, no, no, no, choose me so it's…for the audience, I want to know Mark has full editing control of the podcast so whatever negative things said about him were completely edited out. Mark: Well, that's actually not true. I don't touch it, in fact, there's a point in there and I'm hoping the editors… Joe: See he's fabricating he's making this up. It's totally true. Chris and Podcast Motor; they do what he tells them to do. Mark: They're the only people in my life that do what I tell them to do. Joe: You man have seven children, that's the way it is. Mark: Yeah, I guarantee nobody in my household does what I tell them to do. Joe: There is teenagers. Mark: There is a point in there; I hope the editors catch this where Amanda cuts out and I awkwardly interject so we'll see if the editors catch that part. If they don't just bear with it because she's actually giving some really good advice during that point in the podcast. Joe: So you and I always joke about or I always joke about the fifth pillar. You always correct me and tell me it doesn't exist. And for those that don't know the pillars, it's growth, risk, gross transferability, and documentation and I always say there's a fifth. It's an invisible fifth and it's the person behind the business. Who you are and how you behave and what you post on Facebook and what's your LinkedIn profile says and it's silly pictures and things of that nature. It has an impact on the overall value of your business. People are going to stroke a check for enough money that is going to make a difference in their life savings and the risk they're going to invest in their future. They need to like you number one, they need to trust you number one; both a number one. That is so so valuable so I love this topic. I absolutely have to listen to see how quickly they all said your name instead of mine. And then I'm going to have to have another panel on with the other four advisors and see what they say. Mark: Sounds great. Mark: Okay, welcome everybody. We're having our very first podcast panel or panel podcast. I don't know what we want to call this but basically, we have a bunch of people on this podcast here. We have Amanda, Jason, David, and Bryan all joined me for a conversation. We've never done this before so we're going to see how this actually works out. The format is going to be pretty simple, I'm just going to ask questions and pick out different people and see what sort of conversation comes from those questions. So, guys, I'm just going to start off with a very simple question. You've got to pick one personally Joe or me; me or Joe? No, don't answer that. I'm just joking. Don't answer that because I already know what the answer would be. You guys would want Joe. Alright so let's; I want to focus this panel on more seller questions because we obviously work with buyers. I know a lot of buyers listen to the podcast but we work with a lot of sellers as well. And so I want to focus a lot on that. What is it like to sell a business? What are some of your experiences? You guys have a ton of experience working with sellers, preparing their businesses for sale, helping them go through that really difficult emotional complex process of exiting their companies so I wanted to try and tap into your collective wisdom here, get some good information and insights into sellers and that process of actually selling a business. And I want to start out by looking at how much influence a seller can have on the value of their business just by how they act with their business. Let's start with you Jason because you are the longest-tenured member of QLB here so I'm going to start with you. I'm going to ask you just a pretty basic question here and that is do you think that you can increase the amount of money; can the seller increase the amount of money they get out of the exit of their business by being a quote-unquote good seller? Jason: Absolutely 100% but it may not be in the way that you're thinking about it. I don't know that your value goes from a million dollars to a million one because you're a good seller. I think it's more binary. I think it's either a million dollars or zero. Meaning if you're not a good seller I think it's likely to spook a buyer to the point where they simply don't want to complete a deal. So I think it's incumbent to be a good seller, to be ethical, to be honest, and very very important to be transparent. So like any little thing about the business that in the back of your mind you think gee I really don't want to talk about that, that's exactly the thing that the seller should talk about with the buyer. Get it out there. Mark: Yeah. Amanda, I know over the years you've also been with QLB for a really long time, we've worked with all sorts of different people. Some people are really easy and a joy to work with and while not dumping on any previous clients, some people are a little bit more challenging. And I want to take a step back and just say something real quick. When we talk about challenging clients, difficult people to work with, the one thing that's always important for us to keep in mind is I get why some people are somewhat challenging. They've built a business, they have a valuable asset, they want to make sure the deal goes through well. So they have a right to a certain extent to be a little bit more challenging. But what has been your experience, Amanda, when you've dealt with a client that might be a little bit more difficult to work with and maybe a little more abrasive in the negotiations? Have you seen that impact the deal that they're able to get? Amanda: Absolutely. I think it's important to actually take those clients and take them aside and say it's really important to look at the feedback that we're getting from buyers and to be reasonable with their expectations. Otherwise, we're not going to deliver for with the deal successfully because the buyer's feedback is super valuable. If you get a lot of feedback that's consistent and a seller is not willing to hear it, it makes it very difficult to take those items there that could be actionable, make them happen, and then get a deal done. I think that also working with abrasive sellers can rub buyers the wrong way because obviously after a deal is done they have to work with the buyers. The buyers work with the seller for extended period time for training and support and it certainly is concerning if a seller is not easy to work with and has a difficult time getting along with the buyer for that matter. So yes it definitely can impact the deal. Mark: Yeah. And I think Jason your point about it being somewhat binary I think is interesting. At the end of the day obviously, we're valuing the business not necessarily the business owner and so Bryan what are your thoughts on what Jason is saying as far as it being somewhat binary? Do you agree with that or do you think that the seller is just one other element of the entire business mix? Obviously, we're valuing the business on its own to a certain extent where does the buyer fit in; I'm sorry, where does the seller fit into that entire valuation process? Bryan: Yes. So I think Jason makes a really, really good point and I'd like to touch on his point about honesty first [inaudible 00:11:30.1]. I think that's probably the most important quality that a good seller can have. But in terms of sort of being a good seller, being more binary than affecting the valuation I think it can be like this and if the seller is really difficult to deal with then disconcerting there is something that's not happening. But I think that being a really good seller can actually also increase the ultimate value that the seller gets out of the transaction simply because being likable and getting along well with buyers is in my opinion likely to induce better offers, induce better conversations that lead to better offers, and thereby can lead to a better and more profitable deals for the seller itself. Mark: Yeah, I think the only issue that I would just if I'm going to comment on this here would be that the buyer is going to look at a business and look at the element of risk. There's always a perceived unknown of what am I actually getting into here. And if you have a seller who is shifty, if you have a seller who is maybe withholding information or is being just kind of; I think Jason to what you're saying, if they're being really abrasive or just mean or whatever yeah that becomes a very binary sort of situation where if I'm a buyer I don't want to get into that because who knows what's going to happen after the sale. Jason: I find in the real world though it's not necessarily that that a seller is abrasive it's more the word you used is good shifty. A buyer just gets the sense there's something that the seller is not telling me. Are they planning to start a competing business the day after they sell? Do they know that this industry is about to hit a brick wall? Are there issues with the supplier? It's that shifty element more than the abrasive element is what I find in the real world. Mark: I would agree with that. I mean the thing that I think people on the sell-side need to understand is that from a buyer's standpoint risk plays into a valuation perceived or real. It doesn't matter if the risk is real or if it's perceived it's still there. And so if you are giving off a sense of risk to a buyer that's going to play in the valuation that you get. So I guess we can put this out there as a plea to be a good seller; to behave correctly. But what does that actually mean to be a good seller? David I'm going to throw it over to you because I haven't got you in on this yet. And sorry, I didn't get to turn in you in the first question here but I want to ask you what are some ways that you've seen from sellers that make them good to work with and things that maybe sellers can do to maybe reduce that element of risk; that perceived risk that they might give out otherwise? David: Yeah, it's a great question. For me, it comes down to three core principles and the guys have touched upon perhaps the most important one right away which is honesty. And then after that, I think it's diligence and knowledge of your own business to the extent that they understand their own numbers in great depth. They understand the reasons, the trends, the way things happen, the problems that they've had; like fully understanding then business. When you have that and have someone with that level of knowledge come on the call with the buyers it's incredibly reassuring that they have this gross knowledge about their own business. And then to a company both that depth of honesty with expertise in their own business. And you know that's not taken for granted because sometimes many entrepreneurs are running multiple businesses and they haven't had the time to focus a lot on one specific thing. So when you have that knowledge it's really helpful. And then the third piece, of course, is productivity. I think that it's easy to come into a selling process perhaps when you are quite emotionally spent even being in the business for a while and to underestimate that a lot of clients will ask some questions and they will want to go back into past historic information and having like a positive mindset about putting that information and realizing that it's also the benefit of the ultimate end goal of the transaction which is to get the best deal terms. Going at that formula very proactive and positive perspective really just creates that like perfect cluster I think of the best seller like proactivity, positivity, honesty, and diligence. Mark: Yeah, that can be a really difficult line to draw because from a seller's standpoint you hear some of these questions and you think I don't want to share this. But at the same time, you don't want to appear shifty. I mean where do you guys think that line is for a seller when they're going through; especially like initially, right? We put up the listing out to the market. I think Brad who is not on this call recently put a listing on the market and had like 300 inquiries on it. We had to shut things down and that client is going through multiple calls one after another after another. And some of these buyers get on and they start asking some pretty pointed questions pretty quickly. What do you think the line is? Amanda I'm going to throw it to you, what do you think that line is where between being a shifty yet still open and honest and proactive as David says? Because I agree with you 100% David that being proactive makes a big difference. So where would you put that line, Amanda? Amanda: I think it has to do with creating expectations for when you're going to open up certain information and letting them know upfront what you're comfortable with. So there are certain things obviously that you want to keep pretty close to you like your suppliers or certain proprietary information that you just don't want to open up to everybody. And so possibly you say okay I'm going to give you all this information; my financials, this is how I do this, this, and this but creating a timeline of when they'll have access to that information based on certain steps being in place and finalizing the deal. And keeping some of that information towards the end I believe has worked really well for most sellers and buyers because if you have that trust level that you built between the two along the way and then you're just basically following the course of actions that have been set out ahead of time then I think that creates a nice flow. And obviously, that's what we want. We want sellers and buyers to both be comfortable through the entire process so that we can get to that finish line. And so I think it is obviously definitely a fine line. But also when a seller and a buyer are working together and they're meeting in person I think that makes a huge impact in what information is shared because you can just feel whether a person is trustworthy or not and what they're going to do with that information. It often comes across just in energy and so oftentimes the seller will let their guard down just when they get to know the buyer a little bit more. But upfront I think obviously you don't want to give 300 people everything you have for obvious reasons. Mark: Yeah and I think for… Amanda: It's about creating expectations. Mark: I would agree 100%. For the buyers that are listening to this, I think the insights that you can take away from this as well is understanding that. Amanda your suggestion is something that we use quite a bit here at Quiet Light during the due diligence process of ordering your requests and understanding some items are going to be more sensitive than others is a really good tip there. It does a great job of helping that seller get put at ease and from the sell-side is a great way for you to protect your more sensitive data by promising this saying I'm more than happy to share this with you but let's first go through these other items first just in case that torpedoes the deal. Bryan, I'm interested to know what your thoughts are where you think the most sensitive sort of data is that sellers might want to consider maybe safeguarding a little bit more than others. Obviously, different sellers are at different levels of comfort. Some don't want to share a single thing about their business and other people are like I don't care. You can't replicate what I did because I got the magic sauce. What sort of information do you think sellers is kind of the main stuff you would probably want to hang onto until the end? Bryan: Yeah, that's a great question. I think it depends a lot on like I said an individual seller. It also depends a lot on the type of the business and the business model, to begin with. So I think with that with an e-commerce business the most closely guarded secrets so to speak might be like Amanda mentioned the vendors with any any business that depends entirely or for the most part on a single or a couple of traffic sources the seller might hold the details of those traffic sources confidential such as for instance in indication of PPC traffic they might not feel comfortable disclosing their full keyword lists and that copies and so forth in the early stages. So it really depends on the business model. It also depends on the business itself and how defensible the business is. Like you said there are some business sellers who are happy to open up absolutely everything because they are fully sourcing that nobody can replicate the business no matter what they sold on but businesses are different and so does comfort level is different. Mark: David and Jason I'd be interested to know from you are there any elements that you have ever run across that have been off-limits in a due diligence process and if so how have you handled getting around that? For example vendor names, customer names, talking to employees; if you're able to share any details on that please do. And I didn't prep before this so if you're not we'll just move on to the next question. Jason: No, that's fine. Well, one thing if I may I just want to add onto what Bryan said. He mentioned about whether a business is replicable. One thing sellers hopefully are aware of, any buyer that's going to see the information has signed I think it's about a five-page non-disclosure agreement which specifically says they're not allowed to scan for ideas to steal. So if a buyer did that they would be blatantly violating their NDA. And a seller would potentially have legal recourse. So hopefully that will give sellers a little more comfort. In regards to what information is truly off-limits, the thing I found is by the time of closing it all has to come out. But some of it does come out essentially at the closing table. So one of the big areas of sensitivity I found is if a business has employees a lot of times the seller doesn't want to mention the sale to the employees literally till the last minute. The reasoning is it could really make them panic and look for other jobs if the deal doesn't go through. The buyer who might be inheriting these employees will have some obvious consternation. They're going to want to know who's about to work for them; are those people planning on sticking around? That can be a really sensitive area. And I've had situations where it feels like we're a lock on that or some other small issue and it always seems to get resolved at the closing table at the 11th hour when finally everyone feels confident that the deal is actually going to happen. David: Yeah and I think to add to Jason's point it's something that comes to mind a lot. Me over the years that's owing a lot of SaaS deals you can imagine the code base is just a really cool secret sauce component of SaaS business and the buyer very naturally wants to see that annotate to see what kind of code quality is annotations and see what kind of architecture is and that creates a lot of shrikes naturally in the owner right away. And it was an interesting bridge trying to think about how we could do that in a very safe way to get to that point that Jason is talking about which is the eventual reveal at closing. And what we did that's worked very effectively over the years and what we do at Quiet Light is show a snapshot of that code base and just provide enough insight and then a high-level like architectural look so that they can see how this sort of modules are put together. And then just a small snapshot so they can analyze the code based on a very discrete basis. Or also consider using a third party due diligence advisor to come in and review the code base and that way the owner is never really hands-on with it. It's being reviewed by a third-party specialist and there's a non-disclosure agreement in place and so you really can actually go into something that looks like quite a difficult issue and something to verify with a lot of credibility and integrity. So that's one of the ways that we've done most to do that with SaaS. Mark: Yeah I think one of the things I've learned over now 13 years of helping people through this is that during the due diligence process oftentimes a buyer comes in and says I need to understand X. And rather than saying in the due diligence process that I need to understand X they say okay I need to understand X and the way to do that is Y. And so what they say is let's do Y. And the seller says I can't do Y. And then the buyer says well what are you trying to hide, right? And so one of the tricks for you guys that I know you guys have done so well over the years is figuring out what is that X; what is the person actually trying to achieve through this request? What are they trying to learn through this request? And David to your point I'm glad you brought up [inaudible 00:25:11.7] because I was going to bring that up. That's one thing that I would consider to be kind of a non-negotiable. If I had a SaaS business and a buyer came in and said I need to get the codebase I would say no. I don't think that that's reasonable mainly because we can satisfy the same information that you're seeking in a way that does not involve handing over the entire code base through a third party due diligence requests or otherwise. I think there are other elements that could be non-negotiable such as if you have a business that has only five clients. And if the buyer wants to speak to those clients there might be a reasonable request there. But it can also be pretty dicing so how do you overcome that sort of friction in a due diligence process. Jason, it looks like you have something that you want to add onto that. Jason: Yeah I mean just touching on that. One thing we were talking about earlier was being a good seller and the corollary is being a good buyer. But one thing I've encountered on occasion is somebody will have experience with having done other deals in the past; either business acquisitions or dispositions or real estate or something. And a person might have an attitude of I've done a lot of deals; this is the way it's always done. And one message I would try to get out to people is just because you've done a deal in a certain way that's not the way it's always done. This panel has done literally hundreds of deals and probably in dozens and dozens of different ways. So I think Mark what you're saying is try to figure out the core of wants and then get creative about how to supply it is probably the most appropriate answer rather than being rigid and saying this is how it has to be. Amanda: I also think to David's point about bringing a third party to do due diligence and possibly a financial audit or an audit of some technology or code it brings a lot of value because it gives the buyer some time to focus on actually what they wanted to do at a business point or it takes the nuances of the financial load because it's so tedious when you're going through financial due diligence or looking at code. And to have somebody else do that who's professional and experienced with that while the buyer can focus on future opportunities and getting prepped and ready for your transitioning into the business then I think there's a ton of value in doing that. And oftentimes it helps the seller feel more comfortable sharing that information with a third party as well. Mark: I'd be curious to see what experience each of you has had with conditional purchase agreements. I've used them sparingly and just I'm going to take a step back, whenever we do the podcast I introduce something that is a little bit outside the normal. Oftentimes I hear from you guys they're saying why are you saying that now everyone is going to want a conditional purchase agreement. So I'm not necessarily encouraging this but I've used it on occasion when somebody really doesn't want to disclose vendor names or really doesn't want to disclose something else. So we say alright let's put together a conditional purchase agreement where basically this thing is binding conditioned on a very specific term. Have any of you others worked with those? Jason: I mean I think like I said I've had some deals where it really seems like it's either going to close or fall apart at the closing table and they've always closed. It's always whatever is that one condition has been revealed right at the very end. Mark: Yeah, and I think I'm going to wrap this up. Amanda, I think one point that you made that I kind of went right on over is meet in person. If I could give one bit of advice to anyone doing an acquisition on the buy-side or sell-side, get together and meet in person. It solves so many problems. If you can spend a couple of days with that person in the same room going over some of the due diligence materials I think it solves a ton of problems or it creates a massive problem that deals shouldn't happen anyways. And that's an outcome that might be okay if the deal is going to be bad anyway. And so a meeting in person is a great suggestion. It's something that I would definitely recommend. Alright, I'm going to ask and move on to another topic here. Bryan I'm going to move this over to you here and that is talking about what's important in the negotiation. When somebody is looking to sell their business oftentimes what we do is we think well I want to get money out of this. I want to get X out of it. I want to get as much as I can possibly get out of it and forget that there's a lot of elements that you have to negotiate. You have a non compete agreement, you have an employment or consulting agreement on top of that. And there's literally probably about a half dozen different things that get negotiated through the process of selling an online business. What are some areas that you've seen maybe a wrong emphasis from sellers in the past where they might put too much weight on one element of a transaction? Bryan: Yeah there is definitely a lot going on in terms of what makes an offer than just total price of the offer. There are things you mentioned and there are seller notes, equity rules, you mentioned an offer can be structured in so many ways. In terms of wrong emphasis, I think sellers are often a little bit perhaps too much against carrying a seller note especially if it's a small seller note. I've seen this sentiment changing over the recent years though and it used to be the case years ago that most sellers would basically only want to want to deal with good cash offers. It's now getting more and more common for sellers to be okay with a 5, 10, or 20% seller note. And the reason why I believe a seller should be more okay with carrying small notes is because that's what I often explain to sellers themselves is that oftentimes those offers that they get that are structured this way are actually going to have bought them more money at the end than a full cash offer route to the extent that they can even easy to consider the seller note to be sort of a bonus on top of what they get anyway. So they can keep pushing for an all-cash offer but it's likely that this all-cash offer would actually go to turn out to be lower than the cash part of the offer that might go to small notes. Mark: Yeah to that we have a podcast I think it probably would have aired a couple of weeks before this episode here with Shannon Stewart who's a tax advisor on the sell-side. And she has an example of a business that sold for 11 million dollars and that she was able to; the net proceeds increased by 43% largely through deferring some of the payments that came in. And when you're talking about an 11 million dollar deal a 43% increase in net proceeds is not a small amount of money. So I would agree, seller notes and knowing how to structure those the right way is is something. Jason what would you say; is there any element that you think sellers tend to overemphasize when they're negotiating? Jason: Yeah I mean I think like Bryan said headline price gets a lot of focus when in reality it's more about how much are you going to get overtime after-tax that you get to keep. And then I think another thing that gets way too much emphasis is multiple. I think a lot of people get hung up on multiple both buyers and sellers and it kind of boils down more to bragging rights than to a discernible business reasoning meaning ohI sold my business for 4X or whatever so I can tell my friends. The reality is okay let's say you pushed the multiple for your particular industry; let's say you're selling an e-commerce business and they normally sell around three times earnings and you managed to push it to four times like you're taking a lot more risk to get to four times you had to accept an earn-out and it's depending on performance and this and that and the other. Even if you collect it all you're earning what you would make in four years anyway. You wouldn't be selling the business if the sole reason was the money that you're getting paid. There are clearly other reasons otherwise you're better to keep the business. So the big advice I give to sellers is the market will determine the value of your business better than anyone on this panel, better than you the seller, better than any individual buyer. We have thousands and thousands of buyers and for most businesses, we get multiple offers. That's the market. If you're not willing to accept what the market will bear you're better to keep the business than to sell it or to try to push the market beyond what it will bear because it very likely could backfire. Mark: Well Jason you're begging me to go into a question that is also on the list. I'm not going to go there yet because I want to stay on this one here and then we're going to get over to that question to wrap things up here. David, I'll be interested in your thoughts on this as well here. Are there elements; I mean you've got a ton of experience in working with sellers just like everybody here, what are some things that you see people often negotiate maybe more heavily than they should and what advice would you give to them on that? David: Well I think certainly on the emphasis question I would say to sellers when they're reviewing any offer that 50% of the decision; only 50% of the decision should come down to purchase price and terms and the other 50% should be based on the execution certainty of the buyer that's actually presenting the offset. Because there's an ocean of difference between coming out with an LOI for your business and actually closing it. And I think it's part of the; well a huge component of hiring a broker and an advisor to help you take that bridge from there to there and I think it's for me sellers that have been really receptive to guidance and advice at that point whether they should take the focus off the headline price off the headline multiple that Jason is talking about and consider the wider context that is this still going to close because the buyer has experience, for example, they have a readily available source of funding their due diligence requests are miles and miles long they're not reliant on any kind of outside financing [inaudible 00:35:22.8] all of these things introduce risk into the deal and ultimately that's risk needs to be looked at properly in the context of the whole deal so I think that's really important. Negotiating terms, one thing that I always recommend for sellers to be open to is the prospect of keeping the window open for like the minority kind of consulting arrangements after the sale. Honestly, we had enough every business through a standard transition period and depending on the size and complexity that can vary. But I think one thing that's actually really good for sellers to think about is maybe staying on to do like an hour or two a month to just say six months longer with the sale and that goes a huge way with buyers knowing that they just have a slightly longer line which the owner has to ask a half an hour-long question in four months time. And to that point about getting the trust and getting the deal over the way, that's a huge point that I think sellers are sometimes like they're spent and they never really want to spend more time on the business. But just that tiny little time investment for just a few moments goes a huge way towards getting a deal on the way and a great value. Mark: Yeah I would agree to that 100%. I remember when I sold my business now a long time ago they asked me to stay on for six months afterwards and they paid me for it; so a regular monthly consulting fee and at first I was like man this is going to be a pain but what I found pretty quickly is it wasn't. It was really easy. It was very easy money that I was bringing in as a result of that. And it really helped with their transition as well. Alright, we're at 35 or about 30 minutes here on this so we're going to round it out with one last question and this is one that is pretty important to me because I think it's what we all do here. We all earn a living in some capacity through helping people exit their businesses and from our standpoint it can be really easy to treat people's businesses as inventory that we're simply moving. And obviously, we don't ever want to go there because we're all business owners ourselves. We've all been through that. We know what work it takes to build these and then how difficult it can be and how stressful it can be to sell them. So one of my pet peeves that have grown over the years is just hearing people say oh man is this seller I was approaching them I wanted to buy their business they weren't selling it but I was doing outreach and I asked them how much they'd sell it for and man his expectations were crazy. It's a pet peeve of mine so I'm kind of implanting here the answer that I want to hear. Amanda; we're going to go left and right on my screen, Amanda, you're first here. Do you think that there is such thing as an unreasonable valuation or is it only really unreasonable expectations of what the market can bear? Amanda: Well I think both actually I think unreasonable expectations for where the market can bear; I mean when we're seeing that right now. Certainly, we're seeing a lot of growth in multiples over the last two years and there's been a push to constantly drive that multiple. And I think we've done a really good job of doing that. But sellers, of course, have their own expectations on what they think that multiple should be because they hear things from other sellers or they possibly got an offer four years ago from a strategic and they decide to pass that. And that has dried up and gone away and is no longer a viable option. And so I think the market evolves really quickly. And I'm actually one of those people who may have unreasonable expectation professional with expertise and proper data to bring somewhere like that back to reality. And I think that that's; actually, the core of it is having realistic expectations with what the market is; the ability of the market at this time because obviously, that may change in six months for better or for worse. I think that whether the expectations are reasonable is less important than the seller being able to be open to the feedback and coming back down to reality. And I think that makes a lot of difference because we see that quite often where sellers will come in and they think their business is for X multiple but then they're open to hearing what we're experiencing, what we're seeing because we do a lot of volumes and then having those realistic expectations is super important. Mark: Yeah and I think one thing I've been trying to remind people as well especially in the sell-side when we get up into the high seven and eight-figure territory; you brought up Amanda that the seller might have gotten an offer from a strategic years ago but obviously never went through or they heard about so-and-so who got a 6X on their business what they never really hear when they hear these big prices is what was the composition of that offer. How much was there actually cash? How much was equity that can be the phantom value? Jason, I know you have a lot of stories about phantom values in equity, right? And so that's something that we don't hear about. It's like the sports contract of oh my gosh they got o120 dollars but it's only 10 million dollars guaranteed and like it's so much in incentives. Jason, what are your thoughts on this aspect of unreasonable expectations on the part of sellers? Jason: I think part of it depends on how you define unreasonable because I look at myself as an example. Most people say I've got very unreasonable expectations of the value of an hour of my time and I will concede absolutely positively. What I expect to earn is way more than what my job will provide and all that means is I need to adjust how I use my time in order to achieve it. So if you're a person who believes your business is worth a lot more than the market will bear, that's perfectly fine. I just think don't be a seller because the market won't provide it. It's important to understand the people on the other end of the transaction are buyers. They're seeking a certain rate of return. You're comparing your business not only to save alternatives like or I mean to a spectrum of alternatives and various safety like bonds, stocks, municipals, real estate. They're also comparing it to other businesses for sale that earn roughly the same amount. You might have roughly the same growth plans. And it can be really frustrating if anyone is banging their head saying no, no, no, no, my business is special and deserves more when the market simply won't bear it out. I think most of us on the panel have kind of learned that there's a range. There's a spectrum where a valuation could be within a certain range depending on certain factors. Sometimes it's worth it to test the market to put out something at a bit higher valuation just that so you see the seller understands that the odds are going to go down the harder you push. And then one other kind of important point I want to bring up, we talked about this on an internal email the other day. A lot of times a seller will call multiple brokerages; they'll call Quiet Light and then two or three of our competitors and that's perfectly fine. We want you to talk to whoever you want to talk to. But one common thing I'll hear is a seller will say to me how much is the business worth and I'll quote a price. I'll say I think it's worth about a million dollars for the sake of argument and they'll say well wait I just talked to Brokerage X and they quoted me a million two, can you get me a million two? My answer is I don't know and neither do they. It's not the broker that's buying your business. It's a buyer that we've not yet identified and all that all of us are doing is giving an opinion. And in some cases, it can be really detrimental to the seller to try to play brokers off each other because the broker's tendency might be well gee if these three other people told you it's worth more maybe I'm wrong and the price gets bid up in the sellers head. And then when you get to market the buyers; the people that are actually writing the check for the business are like what are you talking about you're way out of bounds? So it's really important to remember who's the decision-maker. In my mind the decision-maker is always the person that's writing the check for your business; sometimes that's the buyer, sometimes that's the banker who's funding the buyer, but you always have to cater to that ultimate decision-maker to figure out what's the true value. Mark: Absolutely. So in regards to the value of your time Jason I appreciate you putting it on a payment plan for this little podcast panel because it is pretty crazy. Alright, David, over to you I want to get your opinions on this. David: I think Jason said absolutely the best. I think the market ultimately informs everyone to pick up on what Amanda said it's all about receptivity to that. I mean you can continue on as a business owner with a maybe like a grand ass perspective of the value of your business for a long enough period of time and as Jason said potentially go with the broker that's gone for a particularly inflated valuation. The problem is as Jason and we all know here is that if you come out way too high you will flop in the market and it will be a long long period of time before you then eventually have to come off the exclusivity pulling down the listing and then return back to market at a later point in time often with another advisor and how many times do we see that at Quiet Light with people coming to us from a very correct or whatever having spent an awful lot of wasted time and to cut in to Jason's point all of our time is valuable and we love the perception of it. If you're a business owner with a great business that you want to exit your time is especially valuable. So that decision right out the gate in terms of your receptivity and so what the market will bear is arguably the most important decision when it comes to respecting your own time and getting a process done and completed and money in the bag. Mark: Yeah, I remember probably about a year ago I was recording a potential client and then he came back and said another broker quoted me and said that they could get me this much and it was substantially higher than what I was going to; what I was quoting him at. He said and he's going to reduce his commission to this. I looked at it and I called him and said yeah you should sign with them. How do you counteract that, right? You couldn't really counteract that too much other than say if you really think they can get that and are being less commissioned then you should sign with them. He ended up signing with me later and we ended up getting a really good deal for him. But I think you guys point about valuations being a predictive exercise is on point. Alright, Bryan, I saved the best for last. What are your thoughts as far as these unreasonable expectations or is it just unreasonable expectations for the market? Bryan: I think Chris and David both absolutely nailed it. And I'm glad that they took the conversation the way they did. I think the market is always going to be brutally honest and any valuation mistakes that are being made, any unreasonable expectations are going to be corrected by the market. But I think the one most important thing on this is it is going to be the market who will buy the business it's not going to be the broker. There's no point negotiating the valuation of your business with the broker because it's not in the broker's power to value your business it's the market that values your business ultimately. Mark: Absolutely I'm going around this out and close it up by saying one thing and that is Jason, you said this in what you brought up, if the value of your business in your head is 10 million dollars but the valuation of the market is 1 million dollars just don't become a seller. That's kind of the result. As far as Quiet Light Brokerage, look I know where the value of Quiet Light is. If somebody came up the street and offered me the value; the market value of Quiet Light I would say no. If they are offering me two times the market value of Quiet Light I would say no. If they offered me three times I would still say no because the value of my head for what this business is worth to me right now is way more than what the market value is. I'm not a seller; not going to be a seller for a long long time. And that's totally fine because I love this business. I love working with you guys. Thank you so much for coming on this podcast panel. Guys give us feedback on this. Let us know what you think. If there's something that you want us to do a panel on as far as topics let me know. If you want it to be specific in industries such as e-commerce or SaaS or content sites we can do that as well. We've got a wealth of experience here with the advisors and we're about to be able to tap into them more with these podcasts. So again, thanks everyone for joining this. Let's do it again hopefully sometime soon. Bryan: Thanks, everyone. Amanda: Thank you. David: Thanks, Mark.

From surfing waves to making waves by fixing exploding toilets for tenants—how an entrepreneur and creative technologist leveraged design to streamline simple solutions.  Today, I am talking to Mark Rojas, CEO and founder of the Proper app that streamlines the building repairs process. Mark has spent his career creating positive user experiences and adding value by solving problems related to efficiency and human connectivity.  You’ll Learn... [04:40] Definition of Design: Viewing how something works in the real world and creating a corresponding experience to make your life easier and more enjoyable. [05:34] Proper app idea originated with possibility of becoming an accidental landllord. [07:13] Maintenance is the bain of their existence. There’s got to be a better way to fix building repairs process and problems. [09:30] Maintenance is more than one issue. It involves many problems for many people.  [10:10] Lack of Communication: Leverage “chat room” to create efficient and effective dialogue between contractors, property managers, and tenants. [13:07] What makes Proper different? Visibility and shared platform for centralized communication between all participating people and places.  [14:50] Building Repairs Process: Submit image, describe problem, create work order, send notifications, add contractors, diagnosis issue, complete fix, submit/pay invoice. [19:50] Property Management Platforms: Proper’s integration and import/export plans for increased visibility for systematic way to save time and money while simplifying lives.  [22:42] Common Questions and Concerns: Is Proper app intuitive? Is training provided? [28:15] Future Feature: Email integration and aggregation to avoid duplicate data.  Tweetables Every elegant solution involves some element of intelligent design. Design isn’t all about pixels. It’s applied via various mediums by viewing how something works in the real world. Maintenance is the bain of a property manager’s existence.  First Step with Proper App: A picture is worth a 1,000 words, so describe the problem succinctly. Resources Proper Mark Rojas on LinkedIn Venice Art Crawl Buildium AppFolio Propertyware Intercom Help Scout GatherKudos DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz Transcript Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. Today’s guest, I’m hanging out with Mark Rojas. Mark, welcome to the show. Mark: Hey, it’s good to see you again. Jason: Mark is coming to us from a company called Proper Chat, correct? Mark: That’s correct. Jason: Mark, I’ll read a little bit of your bio. It says you are the CEO and founder and it says, “While you might not think of hiring a designer to fix an exploding toilet, Mark Rojas still might be the man for the job. From starting his own surfboard manufacturing company at 16 to founding multiple tech companies focused on creating positive user experiences, Mark has spent his career working to add value by solving problems of efficiency, and human connectivity. An entrepreneur and creative technologist from Queens, Mark is the founder and CEO of Proper, an app designed to streamline the building repairs process. He first began befriending property managers while producing the Venice Art Crawl, a passion project that transformed vacant properties into temporary art showrooms (aka fun, free open houses). Shortly thereafter while subletting his apartment in 2017, Mark was blessed with the invigorating experience of needing to manage repairs for a bathroom explosion involving multiple tenants.” Why don’t you take us from there? Mark: That’s a good intro. Jason: I’ll let you tell the rest of the story. How did you get into this from surfboards? Mark: Surfboards was a little I went to when I was 16 years old, but that did throw me into design and ultimately product design. Right after college, my career quickly became into web development, app development, and working with a lot of startups here in the Bay Area, which is where we’re based out of, to leverage design to solve water problems. It came with the advent of mobile, really becoming this fast-growing platform, where your everyday user now is expecting this very seamless experience that is solving various problems we’re on. That transitioned from building a product, starting a company, and then continuing to wanting to build products for others. I think one of those things that continues to be a passion of mine is finding a problem and leveraging design to simplify, streamline it, and make everyone’s life better. Jason: I love it. That’s entrepreneurism in a nutshell. We see a problem and we’re crazy enough to think we can solve that problem. We can make money solving that problem and create a win-win. You love that you say that you focus on doing it through design because really, every elegant solution involves some sort of intelligent design, whether it’s a system, whether it’s something visual. People think design, they think it’s like graphic design or something creative. Mark: Yeah. I don’t think of design as just pixels. There’s various mediums through which one can apply design. It’s really viewing how something works in the real world and seeing how can you create a corresponding experience that can streamline it, that can make it simpler, that can make it more delightful, more efficient, and really give you a lot of your life back, whether that’s time or even just joy. Jason: What problem then did you really see that you’re like, “I’m going to create Proper”? Let’s try to build this problem up. Mark: I’ve seen a lot of different thoughts to my life in being a tenant, but it really became a problem for me when I almost became an accidental landlord. I was traveling for an extended period of time, I have known my landlord for a while, and she was happy to actually let me sublet it. It’s like, “It’s okay. Go off, I trust you, and when you come back, it’s all good.” But there’s still a level of responsibility that was pressed upon me. As I rented out my apartment, I quickly realized that I have become a landlord. So, two days into it, the subtenant called me to let me know that there was a major problem. I was like, “What? What’s going on?” It turned out that the pipe above our ceiling under our neighbor’s bathroom had burst. To say the least, it’s quite a mess. This set up a flurry of emails, phone calls, text messages between the tenant and myself, the property owner, neighbors, contractors, plumbers, et cetera, and it was happening over phone calls, emails, text messages, WhatsApp calls, FaceTime calls. At some point, I was like, “Wow, this is rather ridiculous,” and my design mind immediately started thinking... Jason: Broken. This is flawed. There’s got to be a better way than this. Mark: Yeah. My wheels are just spinning and spinning and spinning, and I started designing it in my brain. Then, one day I just whipped it out of my computer, I just mocked it up, and I was like, “I’m going to build this.” I started building it and I think one thing that’s true then and now, and even more true now, is we spend a lot of time talking to our users and our customers, and really dissecting their problems or processes. I immediately started doing calls with property managers that I already knew. As you saw in my bio, I knew a lot of property managers. When I started the Venice Art Crawl, which is a crowd-sourced art event, we have 40 different art shows going on at the same time in Venice beach. The way I did it was I found vacant spaces, [...] the property managers and basically said, “I know I can bring high net worth individuals to these empty spaces and we can treat it almost as an open house.” That worked not only well—I was creating value for them—they all basically love me. When I started working on this idea, they were happy to talk to me for hours at a time. What I found is that maintenance is almost the bane of their existence. Jason: Oh yeah. We did a survey inside the DoorGrow Club Facebook group—property managers listening, you should be in there if you have a property management business—and we asked—just an informal poll in the Facebook group—“What’s your number one challenge in your business?” There were two or three items at the top of the list that were connected to maintenance. It was sourcing vendors, it was maintenance coordination. Maintenance is the biggest headache or challenge in property management. Mark: Yeah. It’s very painful to the point that I actually thought that I was becoming a therapist. Sometimes, they would talk to me for three hours at a time just talking about it, and I was like, “Wow, this is a very real problem.” I was able to take those learnings and turned it into a product that corresponded with it. What started off was really just a project. I didn’t think, “Oh, I’m going to become a billionaire off of this. This is my next big thing.” This is more, I was traveling, I wanted to start building a product, and I wanted it to not be something that I built in bane, but rather, to possibly solve someone’s problem. Initially, it was my problem, and when I talked to property managers, they actually laughed at me because I was building an app already and only dealing with a monthly maintenance issue, while they’re dealing with hundreds a month, if not more. Jason: Right. You’re building an app for one maintenance issue. Mark: Yeah, so talking to them totally validated that this is something worth pursuing. Then, I just went deeper. I kept talking to them. I started talking to the contractors, the tenants, and I realized that this is a problem on all sides of the equation and set out to start building a solution that could solve a lot of the issues with it. I think a lot of my history in design has been focused on communication, really making it richer and removing barriers. Essentially, a lot of friction and a lot of time wasted happens when poor communication happens. That’s why it’s proper.chat and leveraging chat as a platform to remove a lot of the bottlenecks that happen, like playing Whac-A-Mole between an email for this contractor, phone call for that tenant, and really starting to centralize everything where we could remove those bottlenecks and with the oversight of the property manager, the contractor and the tenant can speak with each other. Anything from scheduling, updates, “Hey, I got to go to Home Depot and get this part. I’ll be back tomorrow.” In the world today, the tenant would know. Three days could pass and that creates frustration and friction for the tenant because they don’t know what’s going on, and that means another phone call to the property manager. Jason: Right. Communication in a business, for any business, causes a challenge; internal communication. For a while, as I was growing from solopreneur to building a team, I have freelancers. I thought this was so great because I only have to pay them when there’s work. “Here’s the job, do this work.” But the challenge with that is the communication level was just not strong enough. I didn’t realize that until I started getting full-time employees. The communication level is dramatically different when you have somebody that’s dedicated because you’re reducing the number of people that you need. That person is giving more of their time. Two people that are doing 10 hours a week versus 1 person that’s doing 20 hours a week, I would take the one person any day of the week, especially if those two have to communicate. The communication back-and-forth wastes so much time, and there’s always a percentage of loss when there’s any sort of communication. If there’s communication between two parties, there are gaps. There just always is. It could be a misread and body language. It could be somebody doesn’t understand something. Somebody’s a poor communicator. There’s some sort of flaw. The more you can reduce that, the less friction there is. One of my recent hires was one of these unicorns that can do web development and design. The communication level is way shorter. He can get things done in such a short time. Normally, I want a specialist, but he’s able to create something so much quicker because he’s not having the communicate and negotiate between another party that doesn’t understand what they do. A developer and a designer are two different universes, right? Mark: Absolutely, yeah. Jason: [...] crazy guys setting you both. So, I get it. Explain how this helps reduce the communication and why is this better than the other stuff that’s out there, what other people have been doing? What’s unique about Proper that you’re noticing? Mark: A lot of it comes down to visibility and a shared placed for everyone involved with the maintenance, to communicate with each other. Where we really differentiate is that we started on mobile. We’re a mobile-first solution. We do have a desktop and a web experience for the property manager. In terms of being able to report, what we notice from a lot of property managers, whether they have Yardi, AppFolio, you’re still getting these maintenance requests from many different places. You’re getting from phone calls, emails, text messages. What we set out to build and we’re building right now is one place I can centralize all that. Not only centralize it but make it a more useful format. When someone writes you a three-paragraph email, a lot of it is frustration. Jason: Right. There’s all this emotion and they want you to understand their pain. They’re like, “I got to relate this. I got to paint this picture.” Mark: Exactly, and part of it is because they’ve waited too long to write this email. This frustration has built up and they want to write this email. With our application, which is native, you as a tenant are able to create a work order very quickly, and it’s very visual. An image is worth a thousand words and it really is in this area. Often, these emails don’t even include images, so a tenant is able to quickly snap a photo, almost like Snapchat or Instagram. You don’t train anyone. There’s literally billions of users on these apps who know how to use this and they’re able to create a work order in under 30 seconds. The format is not to write paragraphs and paragraphs. It’s to be succinct, 140–200 characters max and you choose a category. This gets fired off to the property manager, you get a notification on your phone or on your desktop, and then from there you have your contractors that you can add this this conversation. The idea is that it turns into a group chat at this point, with the property manager still being involved. Instead of trying to get back and forth between scheduling, instead of the contractor having to ask questions to the property manager to then go ask the tenant to further diagnose what’s broken, the contractor’s able to immediately see what’s broken because there’s always going to be a picture. We pretty much make that almost mandatory for the tenants. What we’ve seen from contractors is that they’re able to save time and cost by more quickly able to diagnose where the problem is, what tools to bring, what materials to bring. Everything just happens there. The property manager is still part of the process, but they don’t need to insert themselves. When they insert themselves now, it really takes up a lot of their time. Not only because they have to go back and forth, but often they’re fielding phone calls, they’re fielding emails, and then this really, really adds up. Jason: I love that it’s prompting them to take a picture. Mark: Yeah. The first step is to create a work order, take a picture. That’s the first thing. Jason: And a picture’s worth a thousand words. They’re not going to have to write a thousand words in order to get it across. You can see it and you go, “Okay, you can fluff it up or make it more dramatic, but I can see it. Here it is.” Or they might do the opposite. They might say, “Hey, there’s a problem with the faucet and it’s flooding the whole bathroom.” So, you can see it. They send you a picture. In a lot of apps, a picture’s an afterthought. They have to do some serious extra work in order to get a photo into something or to do it. I’ve had maintenance companies ask me, “Could you email me a photo?” or, “Can you take a picture so we know what to look for or what type of fixture we need?” whatever. It slows down the communication significantly. Mark: Totally and I think there are these added benefits that currently property managers don’t have the bandwidth to do. Because of the contractors there, they can easily provide updates themselves like, “Hey, I have this question.” “Hey I have to come back.” Right now, that has to go to the property manager, the property manager then has to tell the tenant, and then often this doesn’t happen. So, you have this built-in benefits of transparency that you have with the tenant that really builds trust, but also stops them from calling you, which once again takes up a lot of your time. The very nice thing is that at the end, the contractor is able to close up the job by providing proof that they’ve done it. So, they have to take pictures of it. Then, you have these records of the conversations that you have with everyone, the images at the beginning of the job, the images at the end, and it just creates a ton of transparency and documentation that you can have, that’s very easily searchable, filterable later on. One thing we’re starting to work on is really reporting. You can start to really understand the volume of workers that you’re getting, the stages that they’re at, the amount of time it took to complete it, and really how much time it’s taking up for you. Jason: It makes a lot of sense. If you can cut out one phone call, you’re probably saving your team, at a minimum, 15–18 minutes of productivity, simply because one interruption in a team member’s day, typically they say, cost about 18 minutes of productivity. Even [...] take 18 minutes, they got to rebuild the house of cards they were working on or go back to whatever project they’re trying to figure out. So, if you can cut down the phone calls significantly, even if you don’t have that large of a portfolio, it’s almost like getting a new team member on your team. It’s that significant. People are really expensive in property management businesses. It’s the highest cost in the PM business. I know what property managers listening to this are going to be thinking. They’re going to be thinking, “Well, that sounds great, but another piece of technology. How is it going to work with my Buildium, or my AppFolio, or my Propertyware? I got these, they’ve got maintenance requests built into them. How will this work?” Mark: In terms of the different platforms, there are ones that permit direct integrations and we’re starting to work with building some of those. Then, we’re also building a way for you to be able to easily export, search, and import this data at the end. I think the difference really is that the maintenance offerings that they have don’t create the same level of visibility and don’t save you the amount of time. Even if their integration is not there, the amount of time that we’re currently saving you and that we’re going to continue to increase, really starts to outweigh some of the cons of doing that. That’s the way we’re moving through with all these things. Jason: Can you tell us who you’re working to start integrating with yet? Mark: We have a couple of partners, mostly in the Los Angeles area. One has about 1000 units, another 2000 units, and we’re working with both of them. They’re both on different platforms and seeing what’s going to be the most efficient way. It’s not just integration of the maintenance, but also I think what’s really important here is their accounting. We’re really looking at accounting and how we can start to streamline with that because there is one of the things that we’ve seen with the contractors is a lot of them don’t have a systematic way of not just keeping track of their work orders or invoices, but even just generating invoices, so it takes up a lot of their time. On the property management side, you’re getting all these different types of invoices coming in, totally different formats, and then you’re manually doing double data entry into all these different systems. It’s kind of a pain because it’s like, “Why is it formatted this way?” You have this hurdle that you’re dealing with all these messed-up invoices. One thing that we’re seeing is there’s the ease of use of our invoice. A lot of the maintenance techs and workers are actually enjoying using it and starting to use it as a way to create a uniform way of generating invoices for their property managers. What we want to do is actually make that very easy to export so you can import so that you can import it into your accounting system. Jason: Cool. What are the big questions that people ask about this? What are their frequently asked questions, concerns? What are the big questions that they’re asking so that we cover all the bases here? Mark: There’s quite a few, but I think there’s this very chat-focused, very simple, clean design. There isn’t a lot of other platforms that we’ve seen in the space yet. They’re starting to show up, but really there’s very few. I think a lot of people are like, “Hey, do you provide training? How much is training going to cost?” Jason: You’re like, “Do you know how to use instant message?” Mark: No. We don’t want to be sending that at all. We really care about our users, so we offer like, “We’ll train you,” and then the funny thing here is that we do a demo and not for a minute we train them. Jason: And by the way that demo was the training. Mark: Yeah. If you know how to use iMessage or any of those things, it’s very intuitive. That’s really the core principle of the company is designing something that is not only beautiful, but it’s extremely easy to use because we don’t think that we should be paying and send somebody out to train you or that you need to hire some expert to use the software. Jason: All right. I’m going to go to the devil’s advocate on the other side here. It’s so easy, it’s just chat, it’s so simple, why don’t I just sign-up with Intercom or Help Scout and get a chat tool and take tickets? What’s different between those solutions and something like Proper? Mark: Proper is really geared towards maintenance. Even just the terminology, the flow, the understanding of the whole workflow of maintenance getting done, is what is unique to us. You could theoretically use text messaging to do. The reality is you can start to use that, but then very quickly it breaks down and it becomes cumbersome. For example, Intercom. There’s no mobile app. There’s no way to really add photos into what’s going on. There’s no way to categorize it into the type of problem that might be related to maintenance. For us, we provide all those things but then, you’re also able to search, filter, and zoom in on a property and be like, “Okay, these are all the work orders. This is how we spent maintenance on this property.” As we move forward and we start to integrate with other systems, that’s something that Intercom would probably not do. Jason: They’re going to put this chat tool probably on their website, so people coming there if they have maintenance requests, do they hide it like, “Go here for maintenance and then the chat is there”? Or is it [...] and if so, the maintenance coordination is one side, but they also have lead gen that they’re trying to do. They have sales. They’re trying to target owners and capture people with their live chat tools. How do you usually recommend they segregate that or can Proper help up with that other challenge as well? Mark: Good question. The way the application is working right now is that the live chatting or website, if you’re using something like Intercom, that is something that we’re not providing right now. Essentially, what happens is that property managers will announce that they’re using Proper to their network, share the app, then they’re able to install it, and then start reporting through there. It comes into our web app and mobile app. As a property manager, you can use the app from anywhere, but you could also use it at your desktop. From there, is where to start to field everything. Jason: So, Proper works more like an internal tool. When you onboard your new tenants, you can say, “Hey, get this. This is how you can communicate with us.” It’s probably not just functioning as the live chat tool that’s capturing leads on the front-end of your business, but you could always take that tool and put links into it or pre-written messages to say, “Oh, it’s a maintenance request. Go here.” [...] Intercom a button that they click, that I’m here for maintenance and it takes them to Proper to take care of that. Mark: Yeah and one of the really interesting things is that we’re starting to build email integrations, so the initial one that we built is that if you receive an email that’s coming in from a tenant and it’s maintenance-related, we build the Chrome extension where very easily just sends it to Proper and then it turns it into actual work orders. You’re not actually trying to do double data entry there. The next step of that is making it so that your tenants and contractors don’t have to join Proper. They can submit things via email, but then you have one place where it’s starting to aggregate everything, whether it’s submitted directly to Proper or through another channel like email. That’s one of the really exciting features for these next two months that we’re working on should be out. Jason: So, that will be similar to Intercom, which you can have a certain email address like maintenance@businessname.com and have that forward those emails into Proper? Mark: Yeah, it all vacuums it right up and then as it comes in, you’re able to categorize it and make it something that is not mixed with thousands of other’s emails but rather centralized and easy to find just like any of the other maintenance tickets. Jason: It sounds like it would make sense for them to have some sort of support solution and still use Proper for the maintenance portion for the back-end, and internally with tenants. Very cool. What other questions then do people tend to ask? Mark: One of the big ones is really that email integration that I just mentioned. That’s essentially what we’ve been doing is tons of user research and starting to find what are the biggest problems. Using that is like having it bubble up to the top and turning it into features that are usable to them. Jason: One of the challenges in maintenance is the communication between vendor and owner is getting paid, payouts. What if the vendor starts messaging and they’re like, “Hey, property manager, when do I get paid? Here’s my invoice,” and the tenants are seeing this stuff. How do you deal with that? Mark: I’m glad you asked that because that’s literally the feature we’re rolling out right now. We’re waiting for the upstart to approve and by the way, we’re on iOS, Android, and web. The next thing I told you, we make it really easy for your maintenance staff or techs to create invoices and generate them. We’re actually about to roll out payments where they’re able to get to pay through ACH and really it’s cut out a lot of time for the contractors to generate those invoices or even for the property managers to [...] and all these things which I still see very frequently happening. Jason: In the app, the contractor maybe see something a little different and they can submit invoice or something like this? Mark: Yeah. Basically, when the contractor closes up the job, they provide proof that they did it and they’re prompted to create an invoice. Jason: And one proof would be another photo, something along these lines? Mark: Yeah. You’re able to add multiple photos as the contractor. This then generates an invoice that the property manager receives. This is a separate view where the tenant is not part of it. They’re not anything around cost, they’re not seeing this. The property manager is actually able to pay via ACH directly to the contractor through the app. There’s no need to go elsewhere and try to cut a check, having anyone pick it up, or mail it, or anything like that. Jason: So again, it’s reducing a lot of the friction and communication challenges between the property manager or maintenance coordinator and the vendors. Mark: Yeah. That’s one thing that we’ve seen on both sides of the equation. A lot of property managers are still spending a lot of time just doing payments. On the contractor side, they are spending a lot of time generating invoices. They have a good support, so at the end of the week, they’re tying up all the work that they did. They don’t even necessarily have the good system to keep track of all the jobs that they did. So, they’re often once again spending this admin time where they’re not actually getting paid to do that. What happens now is that with the invoicing feature, although it’s simple and very intuitive, it actually reduces the amount of time that they’re doing this stuff, they’re able to get paid faster, and they’re able to spend a lot less time worrying about the stuff and actually getting more work done, which means your maintenance is getting done faster, which means your tenants are happier, which means you’re happier as a property manager because you’re hearing less from them. It’s really an interesting problem because you have these three different groups of people and you’re trying to design the simplest solution that takes into account their unique set of problems. Jason: If you imagine, what would be the ideal situation so that all three parties could communicate the most efficiently? You would just have all three of them sitting in a room face-to-face talking like, “Hey, you’ll do this. I’ll do this.” “Okay, I’ll pay you then. I’ll do this.” “Okay, team. Ready? Great.” Everybody’s there, it would be fast, but that’s not reality, right? Mark: Yeah. Jason: You’re trying to run a business and so is the vendor. The tenant should hopefully has a job and making some money to pay rent. There’s all this stuff going on, we can’t just all hang out, but Proper really creates a room that they can all hang out in and communicate. Mark: It’s great that you actually put it that way because that’s very much how I think about solving this problem. When you’re in person with sometime, it is the richest form of communication. If it’s a group of people, then the bottlenecks or the walls that exist, that is created through distance, creates all these inefficiencies. Essentially, that is actually how we think. That is what we want to be able to create these rooms and make this very efficient, yet rich way to communicate with each other, to eliminate a lot of these barriers that are currently costing a lot of time, which includes money, and often just frustration. One thing that I didn’t mention here is that I spent a whole year working out of a property manager’s office. You can call it extreme customer development and I really understood a lot of their operations and just so much of their time is spent on communication, but because they don’t have good tools for it, it just generates a lot of frustration on each side of it. Assuming that it’s hard to measure, the quality of life when you’re constantly doing frustration just really goes down. Jason: Yeah. Plus there’s a lot of turn-over. Among the property managers that are working for a property management business owner, it’s very difficult. Mark: What’s true of us as a company is to improve that quality of life because we know how gruesome the job can be, how hard it can be, how taxing it can be. If you use our app, it’s very colorful. We kind of joke around in the copy and we try to make it not just extremely efficient but fun. We want to make it [...] inject a little bit of fun into it. I don’t think that I see that very much in the space yet, which is one of the things I’m very excited about is that I want to bring that to the space. Jason: Some of the things I’ve seen in some apps lately that people have been doing to gamify things, which is really funny, that once you complete something or you finish something, you get confetti and balloon noises and stuff like this, like this is a little celebration. So, I’m just going to throw this is a feature request that after a maintenance is completed and somebody marks complete to get […] and they get this little celebration thing. It gives them that dopamine boost to get things done and they feel good about it. Mark: Oh yeah. That’s actually something that now that we’re starting to mature as a company and we’re getting ahead with the feature set and the road map, that’s something that we actually can bring into it. So, given my part of design background, I also know a lot of animators and illustrators. As you can see, we have a lot of illustrations. We very much want to use those opportunities. When you’ve succeeded at doing something, really just letting you know. Jason: Even rewarding a tenant for using the system. Instead of calling you, like they submit a ticket and you’re like, “You’ve done it! Good job!” All these little things just create positivity and they add a positive feel to the property management company. The tenants are usually pretty upset if there’s a maintenance request. The vendors are having to deal with that, the property manager. Anywhere you can add a little bit of fun and gamification into an app, I think is [...] world a little bit more fun. Mark: Yeah. There’s no reason you can’t have fun doing this job. I want to save you time, but like in this, get you to crack a smile a couple of times a day. It’s not just about saving time but it’s about being able to continue to do that job and be happy doing it. Jason: All right, cool. Mark, I really enjoy having you on the show. One thing that might be cool, it would be after a maintenance request is submitted, if we did an integration with GatherKudos, real super easy, super simple. [...] whether they’re happy or sad. Mark: I’m totally happy to talk about that. Jason: All right. That would be cool. It’s really great to have you on. How can people get in touch with Proper? How can do a demo? How can they find out more? Mark: We actually created a unique link for the show, so if you go to proper.chat/doorgrow, you can definitely learn a little bit about our products and then very easily set-up a demo with us. Again the tool is super easy to use, so we are happy to set-up a demo with you. It shouldn’t take more than five minutes. Once you start seeing the product it becomes very quickly evident how this can start saving you time and also maybe make you smile. Jason: Awesome. All right, everybody check that out. I appreciate you setting up that link. That’s awesome. Go to proper.chat/doorgrow and check it out. You get a little special perk for being a DoorGrow Show listener. Mark, really grateful for you coming on the show. I love hearing about new technology. I think this sounds really innovative and I think it solves a problem. I think that it will really be beneficial and I’m really excited to see what you guys do in this space and start hearing some feedback from my clients on what they think. Mark: Yeah. Thanks for giving me time and always a pleasure to talk. I look forward to checking in again soon. Jason: Cool. Yeah, we’ll be talking again soon. All right, I’ll let Mark out. If you are a property management entrepreneur and you’re looking to add doors, you’ve been struggling, you’re wondering why does it feel like there’s scarcity in an industry and 70% are self-managing. There’s no scarcity in property management right now. There just isn’t, but they’re not looking on Google. You’re going to have some trouble if your whole goal is you have people find you through Google. There are ways to go out and create business and we’re focusing on that. So, stay tuned with DoorGrow, keep an eye on us, and if you’re wanting to grow your business, if you want to short some of the leaks in your sales pipeline, you want to dial in trust engine, have generate more warm leads and warm business, it’s easier to close and have less conversations about price, price sensitivity, and comparison to other companies, that’s what we do. Reach out and talk to DoorGrow. We’ll be happy to help you add doors to your business, figure out how you can optimize your business for growth and creating trust. Again, I’m Jason Hull with DoorGrow here on the DoorGrow Show. I appreciate you tuning in. Please like and subscribe on whichever channel your hearing this on, whether it’s YouTube, iTunes, Facebook, whatever. Stay plugged in and make sure you get inside our DoorGrow Club Facebook group where we are putting out discontent. We have an awesome community of DoorGrow hackers like you. So, check it out doorgrowclub.com. That’s all for today, everybody. Thanks for tuning in. Until next time, to our mutual growth. Bye everyone. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow hacking your business and your life.

Welcome to another episode of Level Up Your Life! In this episode, Mark Black welcomes Natalie Davison to the podcast! Natalie is the cofounder of Marrow Marketing! She’s also a speaker, and long time colleague of Mark’s, so you know it’s going to be a fun conversation! These two share a lot of things: stages, schools, even their very first motivational speaker! Another important thing they share? Their views on the importance of live events for your personal and professional development. Mark and Natalie speak in detail and at length about the many amazing benefits of attending an event, and the impact it can have on your life for weeks, months, or even years to come!    The best event speakers are often event attendees on the regular. The first motivational speaker that Mark and Natalie saw (it was the same person). The energy of live events: What’s happening for the audience, and what’s happening behind the scenes to create such a buzz? Are you going to make this event something that can change your life? The kinds of people who attend events are the kinds of people you want to be around.   “I really do like being at an age where I can some somebody has been my friend for decades” - Natalie “The older we get the more good memories we have. Hopefully.” - Mark “There’s something special about being in a room with people that can’t be duplicated in any other way” - Mark “My level of surrender, professional surrender, really depends on who we’re listening to and what we’re talking about” - Natalie “I think that’s just such an important thing to do as a human is to allow that energy and connection to come in” - Natalie “When you’re sitting in that audience and you’re like ‘man, the energy is really fuelling me’ you don’t even know how much energy is being output that you’re taking in” - Natalie “Sometimes I’m speaking, sometimes I’m in the crowd, but I’m never just passively there” - Natalie   Level Up! www.levelupimpact.com Use code PODCAST   Share the show! www.markblack.ca/podcast   More Mark: Your Best Year Yet transformation Program  Mark's website  Mark's LinkedIn profile  Mark's Twitter profile Mark's Facebook profile   Click HERE for one month FREE Audible

Mark Mastrandrea | Forming a REAL Partnership with Gary Vaynerchuck Mark Mastrandrea has an 8-figure business selling canvas art with his company Ikonick. Mark has been able to do business deals with Gary Vaynerchuck and Justin Bieber’s manager Scooter Braun, as well as gaining licensing deals with some of the top brands out there. In episode 258 of the only business networking podcast on iTunes, Mark talks to your host Travis Chappell about how he formed a working business partnership with Gary Vee and Scooter Braun, why Mark is all about the value add, and why you can’t skip the process. Episode Highlights: Mark grew up in middle-class Long Island and was a big soccer player with a tight-knit group of friends. Mark talks about the moment that helped him learn that if he puts his mind to something he can achieve it. In college, he had to redefine himself and he became a hustler and entrepreneur. Mark was a finance major following in his father’s footsteps. Mark didn’t view actual classes in school as helpful. After college Mark’s life tanked for a while. He moved to California and was laid off from his job. He began a 100% commission sales job. Why experience is important and you shouldn’t try to get around it. People need to start looking at the value exchange, not the time. How Mark was able to stop caring about what people thought. Why you should audit your circle and audit what you’re consuming. How Mark made the pivot and started to dropship art. How Shopify and digital market affected Mark’s business. Mark and his business partner did the first $2 million in their company part-time. Why you need to build an internal reputation with yourself. A synopsis of Ikonick - Affordable pop-culture art. How Mark was able to build a partnership with Gary Vaynerchuck. You can’t be a fan and a friend, you have to pick one or the other. You have to be interested and interesting at the same time. It’s not so much about who you meet later, it’s about who you came up with. What Mark has going on with Gary right now - they’ve dropped one collection, and they’re about to drop two more. What’s next for Ikonick - collaborations, licensing, more product mediums, and more. Mark believes that the most important thing in any market is intelligence and skills. Mark tells a story of when a connection led to a moment of success - the story of meeting Scooter Braun. The Random Round What profession other than your own do you think it would be fun to attempt? Teaching or angel investing If you could sit on a park bench with anyone for an hour who would it be, and why? Kobe Bryant His work ethic is next level How do you like to consume content? Books Give us a glimpse of your morning routine? Make bed Do 100 pull-ups Take a shower Doesn’t look at his phone! What is something that you are not very good at? Directions Building things What is your go-to pump up song? Roy Woods and other slow R&B rap Where is one place where we can find you the most? @markbrazil @Ikonick 3 Key Points: Always and only make new mistakes. Value add is more important than the time spent doing something. Mark throws a lot of value out there and that is what has built some of his strongest partnerships. Tweetable Quotes: “I don’t think there’s such a thing as an unhealthy obsession if it’s what makes you happy.” -Mark “People sorely underestimate experience.” -Mark “The real ones know the real ones.” -Mark “When you work with Gary there’s no fluff, and I love that.” -Mark “There... For information regarding your data privacy, visit acast.com/privacy (https://www.acast.com/privacy)

Since 2013 Quiet Light's average transaction size has grown up to ten times. Back in those days, there were no private equity firms poking around the e-commerce space for these listings. Today it is a completely different story and more often than not we're seeing private equity firms come into the buyer spectrum. In fact, once a business reaches a certain size, it is more likely than not that a seller's potential buyer is going to be in the private equity space of the buyer pool. Today we are going to dissect the PE process a bit further. We'll delve into the process, the advantages and disadvantages, and give a general education on the subject for those who are curious about it how it works. Today's guest, Brian Rassel, is Vice President of Private Equity with Huron Capital. He's responsible for sourcing, evaluating, and analyzing investments made by his firm. Brian delves into ways he finds that e-commerce has entered into almost sector of investment that his group is involved in these days. Prior to joining Huron Capital, Brian was an Associate at Prophet, a global growth strategy consulting firm. Prior to Prophet, Brian was a consultant with New England Consulting Group where he led project management in their private equity practice for buy-side clients. Brian is sharing his wealth of private equity experience and how PE is entering more and more into the e-commerce space. Episode Highlights: How Brian defines private equity. How PE funds traditionally start up and get solidified. The difference between small, medium and large equity funds. The holding periods that private equity funds usually need to secure capital. Is PE all about acquiring to grow and sell or is there a category for buy and hold? Do evergreen funds exist? The difference between platform and bolt-on investments. Three things funds do to generate deal flow and types of business spaces they favor. The behind-the-scenes processes of putting a deal together. How many people are involved in the deal on the PE side. The backend investors committee and if that hinders the deal for the seller. Why time commitment is actually a good thing. How many deals Brian's PE firm evaluates per year. The defined process that gets them through the numbers. The growth potential for e-commerce – multiple appreciations and the role of private equity. Brian frames an ideal acquisition structure based on the general private equity model. Why the buyer/seller fit really matters. How private equity can work for sellers who want to get their business to the next stage. Transcription: Joe: Back in 2013 Mark I closed 23 transactions. It was a busy year for me. Do you have any idea what the average transaction size was? Mark: I … what do I guess? Well, it's you so I'm going to say like seven million dollars. Joe: I love putting you on the spot because you do it to me all the time. The average transaction size— Mark: You got to be like 250. Joe: It was 125. Mark: Holy cow. Joe: 125; very small. Mark: Okay. Joe: And at that time there were no Private Equity Firms poking around the e-commerce space for these smaller listings. Today it's a completely different story and my average transaction size was 10 times that last year. And a lot of buyers or a lot of sellers, the question I get asked all the time are who are your buyers? And it's a mix of everyone but more often than not now we're seeing Private Equity Firms come into this space. And I understand you had an expert in that area on the podcast. Mark: Yeah private equity is a topic that's coming up more and more frequently with sellers especially on the higher end of that revenue spectrum that we really work with. And it makes sense because once you get to a certain size of business your buyer is more likely than not going to be at least somewhat in the private equity place … area of the buyer pool. In addition, we've talked before … I had Ryan Tansom on and we talked about selling to a strategic buyer versus a marketplace buyer. And obviously, people always look at this especially at the higher ends and say I kind of want to have a strategic buyer. Well, one thing to keep in mind here is that this is kind of a spectrum right? It's not binary; you're either strategic or marketplace. But when you get into that private equity world, private equity is almost always going to be something of a strategic play. So I thought … look this private equity world is something that people keep asking about let's actually start to dissect it a little bit. So Brian and I talked and we spent probably about half of this interview just kind of going over what is private equity. How does that work? What is the definition of this? What are the sizes of it? And really just trying to ask some of those silly questions that maybe you kind of wonder about but don't want to ask because you don't want to sound like you don't know what you're talking about. And so we went over a bunch of those questions but then we also went over what does the process looked like. What does it look like to sell to a private equity firm? What are the drawbacks to it and what are the benefits of it as well? And really it's kind of a general education podcast but I think also … and maybe more importantly for those of you out there who are thinking about selling down the road and you're looking and trying to peg the different values that you want to get from an exit and maybe you think well I want a 10 million dollar exit or a 15 million dollar exit, if you get to that point what's it going to look like to sell to a private equity and what do you need to do to really make yourself appealing for a Private Equity Firm? And how does the deal change when you're signed to private equity as well. So we really covered a lot of ground in about 30 minutes. Brian is super knowledgeable obviously. He works in this space. And I really appreciated him coming on the podcast because … again I just downloaded a ton of information. Joe: Well let's get right to it. Mark: All right Brian thanks for joining me on the podcast. I really appreciate you coming on. Brian: Yeah I know. It's great to be here. Thanks for hosting. Mark: All right so I don't expect people to listen … my guests to have listened to the podcast in advance and I know … I don't know if Joe's been doing this, he records like 9 out of 10 episodes and I don't know if he's continued on the tradition but we like to have our guests introduce themselves mainly because you know your story better than I know your story and I figure it's a little bit easier. So why don't you give just kind of a quick 30 second to one minute rundown on who you are? Brian: Yeah I'm Brian Rassel. I'm a vice president with Huron Capital Partners which is a middle market private equity firm based at Detroit Michigan. The firm is 20 years old and has invested in … we're typically enthralled buyout investors where we'll buy a majority of a business and have done that through five successive fawns starting back in 1999. And the industries that we play in are business services, consumer, and specialty manufacturing. You know it'd kind of be interesting how I got to know you Mark for those listening is that believe it or not all of those basins are being affected by e-commerce or different kind of SaaS business models that are internet based. And I'm taking it upon myself to maybe be the person of the firm who is trying to understand those influences on all of our companies and make sure that we're in a position to incorporate those changes that are going on out and new coming at large number and being done by a lot of people who probably listen to your podcast and make sure that we're bringing more of the [inaudible 00:05:51.4] in the businesses we own so that they can be successful today and be well into the 21st century. Mark: All right, well I got a lot of questions for you because this world of private equity is encroaching or coming into the internet business acquisition world more and more. And whether it's because at Quiet Light our deal value is moving up or private equity is starting to look at different price ranges and maybe this convergence of these worlds and also private equity looking more in the online space is just becoming an increasing topic that we're seeing more and more of. We're also seeing individuals that have started up on their own raising funds to do large acquisitions or to string acquisitions together. Brian: Yeah. Mark: So what I'd like to do and I already kind of told you this in our conversation before I hit record, I'd like to go over some of the basics here of the private equity world and how it looks in the Internet space as well. And then know a little bit more about your fund and some of the things that you guys are doing over there and all that. So a quick shout out to Chris from Centurica and Rhodium I know that we've talked about him so much that it's almost as if he's a sponsor. He's not. But this is again how we got introduced. You spoke at the Rhodium and then you and I had a chance to speak after that and a good conversation. So thanks Chris for the introduction again. So let's start out really really basic here. How do you define private equity? Brian: Private equity is capital … private capital being put to work in private businesses. And so I like to name [inaudible 00:07:22.6] for folks who really don't know much about it a little quick stat just kind of on the US economy. There are half as many publicly listed companies as there were in 1996 or 1994 something like that. So even if the value of the public markets is larger the amount of places you can park that capital in the public markets is small in the total number of listed names. Private equity is a big part of either big institutionally managed money. Whether that's from insurance companies, [inaudible 00:07:52.4], pension funds, universities, those kinds of things. This is their way to go participate in the forces of economy that are still private companies that they can't get access to otherwise unless folks like me help them get access to it. It also includes folks that can kind of go into different flavors of private equity but depending on the size from the bing capitals of the world down to very very small funds that are more entrepreneurial. There's sort of every flavor under design in certain family offices and other things like that. That would be private equity, pooled private capital going into private businesses. Mark: Well how did these funds start-up traditionally? And I imagine that there's a lot of ways that they can start up. You've listed a number of sources of money and I think sometimes we forget just how much money there is in some of these places. So yeah [crosstalk 00:08:46.6]. Brian: For sure I mean there's just [crosstalk 00:08:49.4] I'm going to get this off, I'll be wrong by a hundred billion dollars. But I think something like 600 billion dollars flowed into private equity firms last year. So these … and the source of a fund or the way a fund works is that a fund manager like the folks I work for here where I'm a part of, they go out and they make their pitch about how talented their professionals are and what their track record is and the fact that they can get access to great deal flow and great opportunities, places to put private capital where it will go earn a reasonable return. And they raise this money from these other institutional or independent investors. It could be high in net worth individuals or anybody like that but … so they get started that way. They'll hold this farm estate back to the 1960s and there are new ones being created all the time. And frankly, as hedge funds have declined I believe in a large way in popularity just because of the efficiency of public markets there's been more and more money directed towards these private pools of capital and the private equity market. And when I say private equity I mean both kind of traditional buy-out funds for more mature businesses that have healthy positive cash flows on the one hand and on the other hand I mean venture capital is the son segment of private equity. And that might be for really really high growth businesses like the next dewberry of the world or whatever it might be. Mark: Right, absolutely. Okay, that makes a lot of sense. And as far as the breakdown as to sizes what would you consider to be a small private equity firm and what are we talking about in terms of their capitalization rates when they start up? What would be the difference between the small, medium, large type of firms? We can get an idea for how much money we're actually dealing with? Brian: So I would say just kind of from my understanding again all this caviada being dead this is sort of Brian Rassell's take on private equity and my interpretation and may not really be the opinions of United Capital, I can only speak for myself as an individual but they have a dedicated fund. And when I say dedicated fund these are groups of people that other folks, other investors have made a promise and a pledge that is legally binding and written their name at the bottom that that dedicated fund, the small one might be 50 million dollars. That'd be very small. Folks who are trying to invest less than that, generally speaking, have something more akin to a pledge fund. They have a number of people that they can pass the hat with to raise money in a deal by deal basis versus having committed capital to go invest in five, six, 10, 12 companies in that particular fawn. So just kind of … back at the envelope type map that you can think of is every firm should have plus or minus roughly 10 investments that have enough diversification in it. So a 50 million dollar fund is looking to put five million dollars to work in the 10 different companies. And that would be the equity capital going to those companies. There's oftentimes a mix of equity and debt coming into those companies and we could talk about that later. And then a midsize fund might be three or four hundred million up and pawn up to the 2KR's of the world or Apollo or the very big managers who are doing 15 billion dollar funds and so all different world. Mark: Very. Brian: They're taking hotels private or something like that. Mark: I was going to say they're buying something completely different than your Amazon business. Brian: Yeah that's right. It's a whole different world. Mark: All right you talked about you have successive funds. In my understanding again is that we go through these rounds of investment that coming up. We had Andy Jones from PrivateEquityInfo.com on and he talked a lot about the holding periods that private equity looks for. Can you just again quickly touch on that? We're kind of doing private equity 101 here. Brian: Yeah. I didn't hear Andy's remarks but just as it relates to a whole period I would think of it just to be linear about it that a private equity firm once our capital is raised [inaudible 00:13:01.9] the time that it takes to raise that money they committed capital or even the past they had capital they're going to take that money and let's just use this fictional 50 million dollar fund. And they'll take something like four years to deploy the first 80% of it. And the goal would be you take 20% of that money and get it into a new platform company. Companies they had no money in before. In the first year or the next year next 20%, next year next 20%, next year next 20% thus 80%. The point at that point you can't do necessarily new investments you're reserving that last 20% for either a company that's struggling that you need to give more money to to keep it going or to do an add on investment to buy something else and add it on to something that's in the portfolio. That might take four or five years to really deploy the majority of it and then another four to five … you know an investment from year one that you only … you're exiting that investment three to seven years later and let's just use five as kind of a round middle of the road number there. So an investment from year one is maybe gone in year six so it's being harvested. It could be sooner, it could be later. And the investment that was your last platform investment from year four might be heading out the door in year eight or nine. So fund life is something like eight to ten years. It can be longer. And a traditional as you kind of draw it up on the whiteboard like I have behind me here is sort of a five year hold. Now there's … I've seen many that are much much shorter and many that are much much longer but those are the fat parts of the [inaudible 00:14:36.2] if you want. Mark: Sure. So is private equity … is the goal of all private equity companies to grow and sell? So acquire, grow, sell, or are there other strategies? Buy it and hold for long periods of time? Brian: There are certainly evergreen funds out there. They're much more … when I say evergreen they have the ability to hold and recycle the capital. They may be designed to have heard of a number that has committed capital from particularly family offices that never want to do the tax consequences of becoming liquid in an investment and actually realizing the gains so they're structured to reinvest the money that they make. Or if they sell something to quickly find someone else new for it to go into. Now that would be a more unique situation. And then certainly family offices there's a number out there that looks for longer hold periods and there are certain funds that are designed for a longer hold period. Mark: All right so this is going to be again another basic question but I want to make sure our terms are all well-defined here. We hear these terms of platform versus bolt on or add on investments. Just real quick the difference between a platform investment versus a bolt on. Brian: Yeah I'll just keep it simple. I'll say anything that is a brand new business, new industry for that firm to go into. They don't currently own something in that space. Whether that's a tiny initial acquisition or a big one that would be the platform investment. So let's just say with a … I don't know Internet broker pencils, I'm just making this up, all right? And they don't have any other investments in the internet broker pencils space and they invest in a company in that space that would be the platform [inaudible 00:16:17.1] that. And maybe there are 10 companies that make … that do internet broker pencils and they buy two other ones of their competitors and they make it bigger or somebody [inaudible 00:16:25.3] and now they're putting it all together those might be add-ons to that original entity that they purchased or recapitalized. That's what we mean. It doesn't necessarily have anything to do with size which can be confusing. Sometimes you start with something small and you get the opportunity and do an add-on that's much bigger than the original investment. So it's more just where is the starting point in you can do a space or an industry. Mark: And if we think about the terms it makes sense right? Brian: Yeah. Mark: You build on top of the platform and you add-on top of the platform. So it makes … that makes complete sense. Brian: Or bolt-on, yup that's where the nomenclature comes from. Mark: Or bolt-on, absolutely. It's amazing when you dig in to definitions it's like the terms actually have a meaning and it makes sense. Brian: They do. Generally, they come from somewhere. Mark: They come from somewhere. There's logic to this stuff. I love it. All right so now I'll get into questions that I'm starting to be genuinely interested in and that is how does a fund develop a thesis or an entire direction to go after a particular platform investment? I mean if you're selling blue widgets and also if somebody comes and says no you don't need widgets what you really need are sprockets, if you don't do anything with sprockets at all how does that enter into a fund's psyche at all? Brian: There's really three things that we're doing here to generate the sort of deal flow and the ideas and spaces we want to go into. So here I'll speak more from Huron Capital. There are other firms who follow a similar philosophy potentially. So the first is businesses we didn't know about but are being represented by a broker or an investment banker like yourself Mark who … those are opportunities that are coming to us. They are being listed. They're being actively shopped around. We may have never thought of the sprocket industry before or we didn't know too much about it or we read materials on it and we say it has a lot of characteristics and things we like; great cash flow, seems very resilient, seems countercyclical, if the economy goes down it'll still do well, it's a leader on its space, any of those kinds of things. Those are opportunities that come to us and that is more of a passive thing. And then we get active once we realize that it fits a lot of criteria and we believe we could be successful with it. And that sets into motion a whole chain of things where we kind of prove out of the pieces that we might like this business and we try to get educated. The second that we spend a lot of time on is networking with executives from a broad, broad variety of industries. Those people know where there are spaces that are changing. And generally speaking, change creates opportunities. Change creates winners on one side and losers on the other side. And less be to the losers but you need that kind of disruption to create any sort of sort interesting investment outcome. The study ID is probably the market's sufficient enough that the study ID is not going to return the greatest returns. So we've spent a lot of time with executives unless I knew them about spaces that could be interesting and trying to listen to areas they know about and start to build some [inaudible 00:19:37.4]. And then even more proactively than that there's a lot of opportunities where we meet the executive who has a view of one particular thing they want to do here at Huron it's got a registered trademark or the like of the firm. We call that an exact factor investment where we will actually flip the process and say we really believe in the sprocket industry. We met Phil who is going to be our perspective CEO in the space and he has this vision that is going to totally turn the industry [inaudible 00:20:11.5]. To do that we need to go find the platform, we call that like getting fuel behind the wheel. We need to find a car to fulfill the drive. We believe he's the best driver in that industry. And we will do all the work, we'll go write a hundred page white paper on it to prove to our investment committee why it's such a fabulous opportunity and Phil is the greatest operator in this space. And then we will commit dollars into going and finding businesses in that space and find Phil the car he can drive and we'll get off to the races that way. So it starts with a commitment from our farms for a certain amount of money behind Phil to go do an acquisition more and more in this space. So it … I guess ranges from that passive we find things and then we get educated too. We educate ourselves as much as possible and align ourselves with an executive who can execute and work the process the other way. Mark: Cool. All right that [inaudible 00:21:04.07]. So let's talk a little bit about the process that goes on behind the scenes when you are evaluating an opportunity. And I think for a lot of potential sellers this sort of conversation is going to be really insightful. So let's say we have somebody that they have an e-com business, 30 million in revenue, eight, nine million in earnings on an annual basis and they've got a couple of private equity firms looking at their business. Where does that start and what is the process going through? And you can talk about maybe Huron's process and then if there are variations that you know as well. The number of people that are going to look and touch that deal as it goes through the steps. Brian: Yeah. Mark: What are some of those behind the scenes looks? Brian: Yeah so once you've got that moment where there's a couple of firms interested there's going to be an incredible amount of information about the business across insurance, benefits, compliance with laws and regulatory statutes, information about the market; anything the business can possibly produce about itself, fairly every file that's off the shelf that they have, every non-disclosure agreement they have with somebody that they on boarded or employment agreement, every contract they have with a customer, or maybe it's an industry where you don't have a lot of contracts with customers but you have a lot of contracts with suppliers. All that information needs to be made available for these perspective buyers to digest. And the more they can be made available, the more that that's organized into different pockets of legal, employee, insurance, benefits, all of that, the better. It's going to save the company a lot of time from serving requests versus being proactive by getting that stuff out there. And you know well everything here all the buyers be under a non-disclosure agreement and that's just a very kind of well-oiled machine around making that information available to give your last few buyers down to the one you would like to choose and have them under a Letter of Intent. And that starts to be an exclusive relationship where the buyer is going to spend a lot of money in due diligence and in exchange for spending that money, they would like the exclusive right to [inaudible 00:23:19.3] business for a period of time. 60 days … 90 days where they engage and here is where it starts to get to be a lot more kind of in your trousers and really analyzing your business but they're going to engage in quality of earnings earned to go and understand did you actually produce the amount of revenue, if you put it in the right time periods, if you really counted for every cost etcetera. They're going to engage legal professionals who are going first to sort of just again a full work up of registration, compliance, [inaudible 00:23:51.9] and then those folks are going to work on the actual transaction documents as well as a host of other advisors. And that would be like again a 60 to 90 day process. It could be 30 days on the short end. There are firms who can do it in that time particularly if you're a smaller business and an add-on to a much larger or a very simple business. Mark: So how many people are we talking about there that are going to be involved in the process? Outside of the consultants like a Q of E … a quality of earnings report that's going to be an outside accounting firm right? Brian: Yeah. Mark: So we're not going to— Brian: Okay so from the acquiring firm? Mark: Mm-hmm. And we can start at the beginning. We can start at your interns that are digesting deals. That's going to be part one. Brian: Sure call it four and they're going to be answering to the remainder of their firm particularly their investment committee. Ideally, it's a tighter team and there's four and if it's an add-on expect more. So you'll have the management team of that kind of platform investment as well. So four to eight and then when you get to the advisor well now you're talking 20 something more. Mark: Right, getting all those outside advisers. Now one of the things I know people get worried about during this process is you start out again with that guy who's that in deals up front and he sees some he passes it on to the team and they end up liking it so now you're dealing with a handful of people that are asking the questions digging deep in that due diligence right? Pages and pages of collecting information possibly even submitting an offer because on the surface things look okay. Brian: Yup. Mark: There seems to be these back end investors committee as well which can also kind of wash the deal far in the process. What would you say to people that get kind of frustrated when they hear that and they think do I really want to work with private equity because there are so many people that could potentially disrupt this deal? Brian: So I would think about the time investment to it. So the private equity firm is in no way interested in wasting any of their time. Huron looks at something like little over a thousand deals a year. That takes a lot of time and we're very thoughtful about moving things to the funnel and connecting our firm's resources to evaluating an opportunity. So if somebody is spending the time I would tell the listeners that they are encouraged. If everything checks out the way I told to them so far or they've written so far about that business then there are absolutely no issues. The firm, an organized and real firm is going to be thoughtful and time is kind of their most valuable resource and they're set up to be able to make a number of staged gates kind of we're interested and we're not interested. We're interested subject to confirm affirmation I want two and three. And you can have a very quick conversation like you and I are having now to say is this the case is this not the case? Here's a big concern we have, should we be worried? And they will both take your answer and that gives them that kind of gumption to proceed. And they'll probably have to go validate that as well later. And that validation just has to support what's been told to them. But they are also making a big commitment with their time in the same way that the seller is and I would take it as genuine on their part that they're not looking for it to fall apart. It's just things do. Certain deals fall apart because new information becomes available. I've seen that happen a number of times where the seller learns things about their business or thinks about their business in a way they hadn't before and can agree that that's a genuine risk and may be something they want to work out within a course of another year and then they might be back to market. Mark: Yeah, that happens often. We see that all the time even in the amount of work that we put a seller through upfront it pales in comparison to what you guys are going to be doing in your actual dig deep due diligence. And the number of times that we have people come back and tell us that was a lot of work but that was really useful. Brian: Yeah. Mark: I have learned a lot about my own business, right? Brian: Yeah a great advisor like somebody like you and using a broker who's been through and understands the questions that are going to be asked is going to save a tremendous amount of time. And we call folks like you Mark a river guide we're using on our side and we love them. Sellers use them too because they're that much more prepared for the process. Mark: Yeah. And I can tell you like the one thing that … I'm going to play both sides here, I would say the one thing that can be difficult with working with private equity is because there are so many people that can come in with a dissenting viewpoint. You're not trying to … convince is a bad word but show the opportunity to one person and have them agree to it; you're having to show a number of people. But the great thing and I love working with private equity on is that it's completely unemotional throughout the process. Brian: Yeah. Mark: I mean it really is does this check the boxes we needed to check and if it doesn't we're going to find out as quick as we can. You said something, I was going to ask this question, you guys evaluate you said about a thousand deals per year? Brian: Yeah the pipeline you think about now it's working its way down at the top of the funnel and so we're a thousand and then that's working its way down to 250 that real solid time is being spent on and then 75 that we're spending real tons of resources and traveling around to visit them … maybe 80. Now I'll get these numbers wrong this is kind of directional and then down to the 30 or so that are getting a Letter Of Intention and we'll close 22 transactions a year. Mark: Yeah so that's an amazing amount of data to be pulling in. And you guys have criteria at every stage I assume that you're looking for up front? Brian: That's right. Mark: Okay. All right that makes sense. Do you publish those criteria? I know we get a lot of just the very broad stuff sent to us. Brian: We don't only because it's just so bespoke for every company. There are so many things that really are as you just said that are check the box and we're highly confident that we will go confirm later. We're highly confident that's not an issue and we are trying to get to it very, very quickly. The three or four things we want to make sure are the reasons we're most excited and confirm that that is factual and that was going to continue. Whatever that might be; on the customer relationship or the recurring purchasing or … whatever it might be. And then at the same time the three or four things that are kind of we're concerned that could be deal killers. We believe we're spending the time because we think that's going to turn out to be true or we need to get to a yes no about is this a real problem very, very quickly. And so you know it's just they're different for every business. Mark: Yeah I know a lot of people listening right now you guys are buyers that are out there looking to acquire. So technically Brian you guys are somewhat of competitors although I think that you operate at a range that a lot of our buyers wouldn't. But I think one thing interesting that they should hear is this idea of having this defined process number one and then number two the amount of deal flow that you have to look at. I've talked to buyers that been out there looking for a year, year and a half but then you find out the number of deals that they're actually looking at doesn't really … this is a numbers game. I mean it's purely a numbers game. Brian: It is and one thing I want to say on that numbers game for us and it may be different for some of your buyers or not is that we're looking for situations that are great for us and we're also looking for situations where the seller in some ways choosing us. Now I don't want to overstate that but I do want to say that there has to be a great fit in every piece and why we're a better owner than someone else for that business. Some angle that we have, some affinity we have for what they do, or some prior experience or something. Otherwise and it could be a little different for particularly small businesses. Maybe it's a little bit less like that and it doesn't need as much of the chemistry but that's a big part of what we're looking for, for sure. Mark: And we talk about that a lot on these pockets. I know you guys are probably tired of hearing Joe and I talk about the need for a buyer being a good fit. And we talked a lot about this general concept of being likable because sellers do eventually choose and for most of these sellers they do have a choice. I mean right now it's a seller's market. They do have a choice of who they're going to work with. I want to talk about the exciting stuff. Let's talk about the actual deals; the money. Brian: Sure. Mark: Why is selling to a private equity something that people should be excited about? Brian: I think I spoke a little bit about this at Rhodium but I just … I see then the difference in multiples that are paid for businesses that are exclusively e-commerce or SaaS based businesses. Those multiples are so much lower than what private equity firms are paying for more traditional businesses out in the economy. And I believe that those worlds will come together. And I believe that businesses that are a hybrid of both or have excellence in both and are flipping both worlds are going to be extremely, extremely valuable. Because on the one hand, they have the relevance for the future, it's coming from kind of the types of businesses that you represent. And also they have that anchor of the traditional business that makes them more under writable and it makes them more predictable because it's a less dynamic place that they're out in. And so that's where I think private equity firms in the coming two, three, four, five years are number one going to become much more comfortable with standalone e-commerce business models that are exclusive that and there are going to be people participating from the much more kind of like formal private equity world participating in your markets. And then I think there's going to be a convergence where a lot of more traditional business models are going to look for the influence and the DNA as well as the revenue and the profits but the influence and the DNA and the growth that comes from the types of businesses you work with Joe. And I think that means that the market that you're playing in, the multiples will rise there. For every dollar of earnings they'll be more valuable in the future and I believe that's for now in a very significant way in 2018. Mark: Yeah and we talked about this this idea of multiple appreciation that we see. And a lot of it reaches over to the fact that this is where private equity starts to play right? So we often talk if your EBIDTA is less than a million dollars per year the … just again for the sake of a multiple, it's going to vary for each business but maybe 3 … maybe 3.5 would be the multiple on that EBIDTA depending on the type of business that you have. But once you start getting up into two, three, four million dollars of EBIDTA now we start seeing the multiples jump up in the different ranges. And the reason for this again is that we're no longer playing as much with an individual investor who really has a much higher risk profile because they don't necessarily have the entire team behind them or a portfolio behind them to be able to take some of that risk but also get the staff in the background and all the resources in private equity. Brian: Yeah. Mark: So let's talk … I am not going to pin you down because it would be a really bad idea for you to say hey we generally paid 25x on earnings which I know you don't. What does a deal structure often look like? Because I know these deals structures do change as well when we're talking about a private equity acquiring a small company. What does an ideal acquisition look like for you in terms of its structure of cash that the owner is going to be getting, maybe equity or debt that you would hope that they stay around and I'd also like to address the idea that a lot of private equity likes to have or prefers to have an owner stay on board with the new company and why that's a good thing also for that owner to think about that. So that's a lot; the general structure, the ideals for a structure. Brian: Okay so let's keep this out of your space and let's just talk about the general PE model. When deals were cheaper a couple of years ago you might get a higher ratio of debt than equity in a deal but for this sake, I'm just going to make it 50-50. I think that more reflects the market today in terms of underwriting. But let's take a deal where a private equity firm is paying at least eight times. That's still a relatively rich multiple. I could have said six but let's use eight times. So we're paying four times the earnings in their own cash that they're talking and they are going and putting the company on the hook or raising four times and they do it. Private equity firm does it but on behalf of the company of debt for the business to take on. So let's say it's a business with 10 million dollars of EBIDTA. So it's an 80 million dollar transaction and a firm like Huron is putting 40 million of equity and raising 40 million of debt in that transaction. And that 40 million of equity can come either from Huron or some portion of it could be rolled over from the seller. If that seller has no debt on the business today, no capital leases or anything else that could be thought of as indebtedness over the normal trade payables. And in your day to day you've got cash coming in and cash going out; that thing that keeps the shop running. And they have no debt on the business theoretically on the day of closing they're getting a check for 80 million dollars. If they choose to roll over some of that … let's just say 10% of the purchase price, eight million of it I would argue that a private equity firm or somebody like me would take that as them stating a high degree of confidence in the future of the business that they want to continue participating and have a relatively [inaudible 00:37:34.7] portion of their net worth tied up in that outcome. Or that they see the opportunity to turn that eight million into 16 or whatever it might be that there is a great opportunity to continue driving growth and equity value in that business. They'll … I start there that the rollover investments are very useful because if you're saying you want to do no roll over whatsoever and you just want to walk away from the business it's not conveying a lot of confidence in the future of the business. There are certainly reasons to do that but it's not conveying a lot of confidence in the future of the business. And where somebody might have been agreeing to pay you eight if you were rolling over and giving that kind of tacit support for the business going over, they might kind of say this is we're not so sure. It makes them a little more nervous and it might be a seven times deal. So you may actually be shooting yourself in the foot in terms of the total proceeds you perceive. Again so it's an 80 million dollar deal, 40 million of debt, the seller is choosing to roll over. They got their 80 million dollar check, it doesn't work like this you're actually [inaudible 00:28:28.9] but they got their 80 million dollar check and maybe we wrote one back for eight and so Huron holds 32 million of the equity and that seller holds eight million of it. So Huron owns 80% of the business and they own 20% and we've got some obligations to pay. That would be kind of the middle of the road structure. There's certainly a lot more that happens as it relates to creating incentives for management teams and that's a very, very big part of what we do to make sure that if we do well they do well and vice versa so that we're all talking in terms of growing the underlying equity value of the business. And that can often be very different for a business that didn't have that before. And it was just solely kind of the founder driving it or minding the growth of equity value. We believe in creating a broad base of ownership so that we're all on the same page. Mark: Yeah. Brian: Our management team is on incentives exclusively through their salary or bonus or both. Mark: Right so one of the things that I've talked a lot in the past especially on like the main street sort of deals is this almost dichotomy and it really shouldn't be set up as a dichotomy of a marketplace based sale where you only have an investor looking to acquire business in a strategic sale where you have a company that it would effectively be like an add-on acquisition in your world right? They already have the sort of strategic advantage to acquiring that company. Within your world, it seems like so much of what you do is going to be the strategy based type of acquisition anyways. Brian: Right. Mark: So it's like you're not going to do an acquisition unless you think that you have a strategic advantage. And when we … you and I talked out in Las Vegas back last October one thing that you talked about quite a bit was we want to pour gasoline on the fire that's already existing. So whatever that might be and so as a seller who's out there thinking about this and saying man I've been growing my business like crazy but I'm investing all this cash back into acquiring more inventory and expanding the product line and I'd like to take money off the table and then keep growing it. This is that perfect sort of handoff to a private equity because you can say you know what you [inaudible 00:40:54.0] your income statement rich in cash flow pour. Brian: Yup. Mark: We got cash. We'll help you out there. You're going to get some cash on the table and then let's grow this from a 30 million dollar business to a hundred million dollar business. Brian: Right. Mark: And so there's an incentive there for that owner to double dip that [inaudible 00:41:11.7]. Brian: Absolutely. Particularly in situations … we see this all the time where additional capital is going to be an accelerant to growth. So capital is what we have and we're trying to find a smart place to put it work and if that means we can buy a business and continue and support that business with more dollars and we believe in the strategy and what's going on in the way it's being operated there's nothing … that's the easiest dollar for us to put out versus the whole re-under writing process of a new investment. And then for that seller to have all their eggs in one basket … I don't care what their life situation is they could be in their 30's and just want to diversify or they could be somebody who's looking at kids who are about to go to college and it just doesn't make sense to have 100% of their net worth or close to it tied up in their business. And if they could diversify a little bit or generate a little bit of cash but their vision hasn't changed at all that's a great situation to bring on a strategic partner like a private equity firm. And that's where that [inaudible 00:42:11.9] fit it really matters and the chemistry between the seller. For the most part, you're not going to sell it to a private equity firm, they don't want to be in the business or definitely not in the business of operating these companies. So round the business and investing in them helping to bring the right resources to it and bring the right capital solutions or capital availability all that. Helping them set strategy and all the other things but the actual day to day operations. So it's not going to be for your sellers or for buyers [inaudible 00:42:45.1] sellers who are looking to exit the business and hand it off somebody else private equity is not going to be the right solution. But for those companies that they either want to go to be a division of something larger and they think they can be a great cross selling opportunity or the way they've built their mousetrap if just they had more to sell in the same way, and I'll say like let's say you're the number one muffler seller online and you also want to do transmissions and drive cams and stuff but you don't have the capital and you don't have the ability to go source and expand that way, going and selling to a larger entity and being that e-commerce division is a very powerful idea. Or just continue and do your own business and double down … accelerate the organic growth, private equity firm could be a great partner. Mark: Yeah, we're just about out of time in fact we've gone a bit long but one thing I wanted to emphasize here, you said that capital obviously is the resource you guys have and are able to invest and I know a lot of people that I talk to say look I don't really need money from this, the business is making money and I feel good about this. But what I find when I actually start to dig in with these guys is I say well what would it take to move to that next level. Oh well, I would have to hire out this other division or create this other division and you know okay but what's the obstacle to that? I don't want to invest in it. It often comes up. Okay, that's the area where a firm like yours can also come in and say well look we have the capital to be able to invest in this. You know what you need; do you want to invest in it to get to that next stage? And even if that means bringing in someone and you can help with that let's do it. Exactly we can do that and we could— Brian: Not to mention that I think we find that often business owners are willing to do one out of their five ideas that are like that and were willing to do all five knowing that three won't work but two should work out beautifully and we're willing to go [inaudible 00:44:39.4] the bodies of the business and the capital and have the appetite to take two steps backward to take four forward and understand that they're not going to all work. And where maybe an independent owner would do those sequentially, try idea one it wasn't really working, didn't feel pleased with making that investment and losing that cash flow, fired that new sales person who was supposed to do something else. We're willing to go do things faster and make sure that that doesn't hover around in the business and the core of what we're interested in the first place. And so we'll work through that with the business owner by giving them that support and the dollars needed to make that happen. Mark: Brian, I really appreciate you taking the time here [inaudible 00:45:19.8] some of the small questions I had but really good to get those things— Brian: No it's my pleasure. It's fine. Mark: So thanks again and maybe we'll have you back again in the future at some point. Brian: That sounds great. Yeah, I enjoyed it. Thanks, Mark.   Links and Resources: https://www.huroncapital.com/member/brian-rassel/ https://www.linkedin.com/in/brianrassel  

更多英语知识，请关注微信公众号: VOA英语每日一听Todd: So, Mark, what do Kiwis like to do in the summer?Mark: Yeah, I think the first thing for some people to realize is that Christmas is midsummer in New Zealand.Todd: Oh nice!Mark: So Kiwis combine Christmas holiday and New Year holiday with a summer vacation as well.I can remember when I was small, we'd have family Christmases and then the next day, which is Boxing Day, we'd go to the beach or we'd travel somewhere and rent a small house on the beach. They call them ‘batches' in the north of the island or ‘cribs' in the south island. And you just spend 4, 5 days, maybe a week, 2 weeks, just swimming in the sea, playing in the sand dunes, walks in the forest: just a really relaxing time with family and family friends.Todd: That sounds nice, so you know in Australia they're really big on surfing. Do a lot of people surf in New Zealand?Mark: There is a surfing population. I think the Australian beaches are probably much larger andmaybe they have better waves, I don't know, but several of my friends used to go on surfing holidays in summer as well.Todd: And what foods do people like to eat when they get together for the summer?Mark: Barbecue is almost the national obsession in summertime, you know, you'd just throw a sausage on the barbie or friends would ring up and say ‘hey, it's a nice night, let's have a barbie!'. I think all my friends have their own barbecue set.Todd: What meats do people barbecue?Mark: Again, New Zealand foods used to very much sort of be the lamb or beef, but now it's getting a lot more varied, you can grill a nice fish on the barbecue, you can still have sausage, chicken, pork, beef, lamb, whatever you want.Todd: Yeah, it sounds good. OK, well thanks, Mark.Mark: OK.

We talk to Bullfrog and Lionhead legends Gary Carr and Mark Webley about the design of PC cult classic Theme Hospital, and how their careers twisted and turned to see them return to create a spiritual successor. Learn more about Two Point Hospital: https://www.twopointhospital.com/ Play Theme Hospital: https://www.gog.com/game/theme_hospital Download CorsixTH: http://corsixth.com/ iTunes Page: https://itunes.apple.com/us/podcast/noclip/id1385062988 RSS Feed: http://noclippodcast.libsyn.com/rss Google Play: https://play.google.com/music/listen?u=0#/ps/If7gz7uvqebg2qqlicxhay22qny Spotify: https://open.spotify.com/show/5XYk92ubrXpvPVk1lin4VB?si=JRAcPnlvQ0-YJWU9XiW9pg Episode transcription: http://noclippodcast.libsyn.com/02-the-return-of-theme-hospital Learn About Noclip: https://www.noclip.video Become a Patron and get early access to new episodes: https://www.patreon.com/noclip Follow @noclipvideo on Twitter Hosted by @dannyodwyer Funded by 4,197 Patrons. -------------------------------------------------------------- TRANSCRIPTION; - [Danny] Hello and welcome to Noclip, the podcast about video games and the people who make them. On today's episode, we pay a much needed visit to the video game doctor, as we celebrate the return of a PC cult classic. Bullfrog are synonymous with a wonderful period in time for games development in the United Kingdom. Producing many cult classics including Populus, Dungeon Keeper, Syndicate, and Theme Park. But to me, the jewel in Bullfrog's crown has always been their lesser-known follow up to the theme park management game. While becoming an instant classic in the UK, Theme Hospital is much lesser known here in the United States. So it was quite the surprise to me when, on a date with an American, the girl across the table from me mentioned it as one of her favorite games ever. I think that was the moment I decided I wanted to marry you, was when you mentioned you liked Theme Hospital. - [Lindsay] Oh yeah, that's, like, an important aspect of our relationship. - [Danny] Yeah, what do you remember about that game? - [Lindsay] I remember all the little goofy components of it, like how the people look, and how you can pop heads, and how you can deal with a million Elvis' and the helicopter comes in and has a thousand people on it, and the fancy man comes around with his top hat. - [Danny] Oh yeah, I forgot about the VIP. - [Lindsay] The fancy man. - [Danny] Yeah. And you had to make sure that he didn't, like-- - [Lindsay] See all your rats and shit, like-- So you be, like, "This way, Sir." - [Danny] Or somebody would get sick right in front of him. He kind of looked like the Monopoly man. - [Lindsay] Yeah, he was so fancy. And he, remember when he stopped by all the wards and looked in all the windows, he peaked in. He'd be like, "Oops, not that one, "no one works in there." - [Danny] I wonder how much it mattered. Because when he was walking around, I always thought, oh, I better make sure that wherever he walks we have fire extinguishers. - [Lindsay] Totally. - [Danny] But I bet it was just, like-- - [Lindsay] It was predetermined before he even landed on his helicopter or however he got there. - [Danny] I think this might be the first time I've ever worked on a Noclip project which is a game that you care about? Is that true? I guess Rocket League you liked. - [Lindsay] Rocket League I liked for a few minutes. None of the other video games you've ever done a podcast on, I mean done a documentary on, I've ever even heard of. - [Danny] Yeah. You're not a final fan of C14 fan? - [Lindsay] I've heard of Final Fantasy. I didn't know there were 14 of them, but-- - [Danny]There's way more than 14 of them. - [Lindsay] I've heard of it. Oh, really? - [Danny] Yeah. And since it is the first time I've kind of worked on something that you actually have a deep knowledge of-- - [Lindsay] Oh, I'm excited. - [Danny] If you had any questions, let me be those sort of the translator between you and the developers. What would you ask if you had any questions? - [Lindsay] Well my big question is when they are going to make a sequel. Because as fun as it is to play that pixelly thing, they better make a sequel. My real questions are about the silly things, like how the handyman could smell cabbage or just little silly components that they put in there. - [Danny] It's the doctors, isn't it, it smells faintly of cabbage. - [Lindsay] It smells faintly of cabbage, yeah. - [Danny] When you were hiring them. Oh yeah, I guess the handyman, too. - [Lindsay] Anybody could smell like cabbage in real life. Anyone could smell like cabbage. So I had that question, and also about shooting rats. Like, what that's about and sometimes you could unlock that secret level where it was just rat shooting. And that was really cool. - [Danny] It was kind of random, though. - [Lindsay] Yeah yeah, it was just like-- - [Danny] Like, why does this happen? - [Lindsay] Right, I have some experience in hospitals and I've never once shot a rat, but they thought it was important that we have that component. - [Danny] I can answer the first question. - [Lindsay] Oh, when the sequel's coming out? - [Danny] Yeah, so I decided I wanted to do this a while back, and it took a while for me to hunt down the two main dudes who worked on Theme Hospital. It turns out both of them ended up having really prolific careers and getting to the top of Lionhead Studios, who made a bunch of games. - [Lindsay] The Movies. - [Danny] They made The movies, I remember you love, which is so funny, you love The Movies because it's probably Lionhead's most obscure game. - [Lindsay] The Movies was really hard. I've never made any progress at all in that game. I think I'm doing something wrong, actually. - [Danny] And the guys who, I think both of them actually worked on The Movies as well. - [Lindsay] Well then I have further questions for them of how you achieve anything in that game. - [Danny] We'll have to leave that for another podcast. - [Danny] But I ended up finding them because they're working on a spiritual successor. So after, I think it's been eight, 19 years? Around two decades, and finally you can play a new hospital management game, it's coming out really soon, so-- - [Lindsay] Yes. - [Danny] Let me ask the questions and I'll get back to you. - [Lindsay] Report back. - [Danny] Like report back to you-- - [Lindsay] Thank you. - [Danny] On the condition of our patient. - [Lindsay] Of our fair game. - [Danny] Yeah. - [Mark] Yeah, I'm Mark Webley, I'm one of the founders and I guess I'm game director at Two Point Studios. - [Gary] I'm Gary Carr, I'm also a founder and I'm creative director at Two Point Studios. - [Mark] I kind of heard about Bullfrog, I didn't really know that much about them until I saw this EA poster, a friend of mine worked at EA, and it was a poster with all their games on, it kind of looked like interesting games. You saw this one in the middle, which is, looks incredible, I said, "What the hell was that?" And it was Populus, and I thought, wow that just looks insane, I mean, you kind of looked back at it and you might not see it, but at the time it was, in my view, whoa that looks so different and cool. - [Gary] I think I started a couple years before Mark, I think I started in 89. - [Mark] Yeah, you were definitely before me. - [Gary] So I done my first game at Bullfrog was Powermonger, I was there at the back in the Populus and I did a little bit on the data disks but not very much if I'm honest. I did a little bit actually on Syndicate, but it was called Cyber Assault when I worked on it. - [Mark] I thought it was called Quaz at one point. - [Gary] It was called Bub as well. - [Mark] Bub? Yeah. Just something easy to type. - [Gary] That's the game that we could never actually decide what it was going to be. It was in production forever. - [Danny] Back in the early 90's, the team at Bullfrog was only around eight people led by the excitable hand of a man called Peter Molyneux. The studio operated out of a makeshift office crammed into an attic above a stereo shop and a flat occupied by a chain-smoking old lady. Peter had used his charm to persuade Commodore to lend them a suite of Amiga's and it was on these computers that the team worked on games, games like Powermonger, Syndicate, Magic Carpet, Flood, and Dungeon Keeper. Gary, an artist, left for a time after they had completed the iconic Theme Park. He went to work at famed UK developers the Bitmap Brothers for a number of years before being tempted back to Bullfrog by a devilish dungeon keeper. - [Gary] Yeah, Peter has got a great way of, kind of, sort of making people believe that these things are going to be what they want them to be and he's brilliant at that and I loved the guy for it. But I wanted to come back and do something that wasn't Theme, so I kept saying, "Could the game idea possibly be a dungeon-y game?" And he sort of said, "Could be." What he meant was it could be, but it's not. So I came back, but actually it was the best decision of my life, it really was because it was great to work with Mark. We're very different people, and we both have sort of different things we bring together and we had-- - [Mark] We argue a lot. - [Gary] We argue a lot and we had total freedom. I mean, back then there was only about three or four people that had the luxury to sort of take an idea and own it, and we were one of those few. So it was a great time in our careers, we were at the right time, I think, to sort of build a team together and make that game. When Mark and I were probably at similar age and different types of experience, I'd had a bit more games experience at the time, Mark had had a lot more management experience at the time. - [Mark] But I was a lot smarter. - [Gary] Yeah, I think so. But at this point in time, I think it was when Bullfrog was splitting up into creating teams within Bullfrog because we'd gotten a little bit bigger. So Mark kicked off what was called Pluto, believe it or not, which was the design and series team that was gonna do all the theme games and I was brought in to sort of partner with Mark on this game, we had no idea what was going to be coming and it ended up being Theme Hospital. - [Mark] Well at that time, it was just me and you to start with, it was just, I mean, the team at its maximum size was probably about five or six. So it was pretty small teams, there's no producer, there's no designer, so I was programming, Gary as doing the art and-- - [Gary] And we were kind of making it up as we went along so that process kind of carried on for a while and I think that kind of originally it was a game about a hospital, a game about a theme park was kind of great, you got rides and exciting things and lots of fun just without even having to go outside the box. - [Gary] Try too hard. - [Mark] And then afterwards it was different. We kind of thought about the flow of the game the patient, the diagnosis, and the treatment of patients, but the sticking point was after. In fact, we were on the research back in Gilford, it's right next to the hospital, so we'd often spend out lunchtime walk around Dart U we'd probably get choked out now. - [Gary] Trying to get inspiration, weren't we? - [Mark] Yeah, just walking around the corridors, and just kind of seeing what's in the hospital. We're going to have lunch in the cafeteria and it was, it came to a point where I think you just, you said, "This is it, isn't it. "There's nothing more, it's just "boring corridors and plain walls." - [Gary] They're all very similar, it doesn't matter if it's the US or the UK, I think hospitals share, they always have the same floor tiles. They have these slightly curved floors where obviously they're easy to wash in up corners so the floors slightly curve, they have this kind of shiny, painted up to about waist-high where I think that can be washed down as well. - [Mark] Hosed down. - [Gary] Hosed down. And they have a few machines with little screens on them and they all sort of makeshift beds that seems to be some sort of crash unit near it. And that's it, and we just suddenly thought, Oh my God, how does this compete with things like roller coasters, and water fluids, and all that kind of color? And we got really scared and we also spent about, and this has been said many times, but we spent about a month in different hospitals trying to do some research, trying to find a game out of all that. - [Mark] Integrate on the street. - [Gary] On the street, we went to Brimley and Rolsory, and we just spent time in all these hospitals and we just kind of got so weary. - [Mark] Gary even got circumcised. - [Gary] No, I didn't. We viewed operations, we were invited to go and look around the morgue and we went into business meetings about how one hospital could strategically beat another hospital to people that have been in injuries. And it just sounds like, oh god this is so grim. - [Mark] We were setting up the ambulance. - [Gary] That's right. Do you remember that? - [Mark] Yeah yeah. - [Gary] And then we sort of went for lunch and again in the canteen that looked very much like a real canteen, they have lots of really unhealthy food. And, uh, we just suddenly I think just landed on this idea at the same time to sort of just let's just make it up. Because we actually knew nothing about hospitals, we didn't know how they really worked. - [Danny] Mark and Gary did their game design due diligence and visited hospitals all around the Greater London Area. They were kicked out of an operation for distracting a surgeon once, and almost visited a morgue before losing their nerve. It was these experiences that brought the boys to the conclusion that they were better off distancing themselves from the grim reality of hospitals as much as they could. They knew that the subject matter wasn't really the focus of the gameplay experience. It wasn't like people who played Theme Park all wanted to run Theme Parks, and the same could be true here. Through their experience they understood that the drive of this game came from the problems players would encounter and the ways in which they would solve them. So they didn't have to make a game about running a real hospital, they just had to make a game that was fun and challenging. It was around this time that Bullfrog was acquired by Electronic Arts. And when their new bosses turned up to see what the team was working on, they were, a bit confused. - [Gary] And when they'd come to the studio and have a look at all the games, it's kind of like, a hospital game? No, I don't get it. It's like, oh, think about ER and things, we were trying to jazz it up. It's actually a really popular, exciting show. They'd say, "But this isn't like ER, is it." - [Mark] I guess that's the problem. I think everybody probably would assume science fiction or fantasy-- - [Gary] Or killing or blowing up. - [Mark] Making some sim game around that would be the best possible subject matter, but I think coming up with, if we stay in kind of reality, and relatable subject, but then you twist that into something else is, makes it way more interesting. - [Danny] EA was right. It wasn't really ER. For one, Theme Hospital didn't have any real illnesses. The people in this world suffered from conditions like Slack Tongue, Bloaty Head, Kidney Beans and Third Degree Sideburns. One condition originally called Elvitus had to be changed when Elvis' estate got wind of it. The character art, which did look a lot like Elvis, was slightly changed, and the condition was renamed King Complex. Another legal faux-pas came with the original box-art of Theme Hospital, which carried a red cross. The Red Cross wasn't too happy about that, so they changed it to a green star. The guys were starting to warm up so I figured it was probably about the time to ask Lindsay's questions. First of all, what was with all the doctors that smelled faintly of cabbage? Who wrote this stuff? And why did Theme Hospital have a rat shooting mini game? - [Gary] One thing I think Lionhead and Bullfrog haven't probably promoted enough is the great writers who have actually made us look even, well, made us look way better than we actually are. Because it's actually, it's interesting, there wasn't that many visual illnesses in Theme Hospital, but a lot of people remember the wonderful names and they paint their own pictures. - [Mark] Yeah, and the descriptions of how they're contracted, so. - [Gary] So I think, but the writing was really important to us. - [Mark] There was a guy called James Leech. - [Gary] But James Leech did the original, but James also worked with a guy called Mark Hill throughout, on and off through the Lionhead days, and that was something we wanted to bring, keep that consistency of writing. So, it was probably Mark, probably is, he's really strong. - [Mark] Yeah, if you've got enough, if you've shot enough rats in a level, you could unlock a secret in between levels, you rat shoot. And it was basically just a lot of rats. You had a certain amount of time to kill as many as you can, and if you kind of chain them together, if you've got enough, if you've got a streak as it were, you could level up your weapons. - [Gary] That's right. - [Mark] And they were really difficult, I think the rat was two by one pixels, you know it was some of my best work, and you had to get a headshot. So you literally had to be almost pixel perfect, certainly in the harder levels. - [Gary] It was hard, yeah. - [Mark] And it's weird, things like that used to happen because we didn't have design documents. We didn't have, you know, we weren't scheduled to do, this week we're on this, next week we're on that. So, you know, this is just when developers just start dicking about really. - [Voiceover] Could people please try not to be sick in the corridors. - [Danny] Theme Hospital was a critical and commercial success, but once they were done post-acquisition Bullfrog saw an exodus of developers as Peter Molyneux left to form a new studio, Lionhead. Mark followed his old boss to Lionhead while Gary was part of another group that founded the studio Mucky Foot. There, he worked on the art for Urban Chaos, Startopia, and Blade 2, and left once the studio closed in 2003 whereupon he joined Lionhead to work on The Movies. By this stage the two friends found themselves in lead positions at the company. They shepherded many games through the studio during this time including Black and White, Fable, Kinect Sports, and unreleased projects such as Project Milo and "BC". They worked together at Lionhead for a decade, but as time passed the job became less like the good old days. Microsoft had acquired Lionhead in 2006 and the now 200 person studio had run into financial difficulty. So as the years wore on, the influence of their parent company was having an erosive effect on the team's creativity. Gary found it especially difficult to get his ideas to gain traction, and so he decided to leave. - [Gary] I guess the thing I enjoyed most of the Bullfrog era was definitely Theme Hospital. It just was, because it was a point when I was ready to do more than just the artwork on a game. So I felt I was much more stepping into being a kind of a co-creating role rather than just making things look as pretty as I could. Then, I enjoyed my period with Mucky Foot, which was a company I sort of helped formulate, and we had some great years there. Lionhead, I guess the challenges were always working with Peter on such ambitious ideas because Peter would, I was in a team that wasn't Fable, so my part of that was Peter would throw some incredibly outlandish ideas around and it was kind of my job to get a little group of people together to try and realize that ambition. And it was really exciting, I mean, we literally went from making things on Kinect or things like Milo and Cabige, which was a bit nice for a while, it was just weird and wonderful opportunities to try and make a difference and do something strange and interesting, so I enjoyed that, too. - [Danny] By the time Mark's tenure was coming to a close, Peter Molyneux had long left the company and Mark was creative director of Lionhead. His final act at the studio was to help get Fable: Anniversary out the door, and it was then that he stepped away from a job where he'd spent most of his adult life. - [Mark] Yeah, I mean, I was there from the beginning, and my tenure was 15 to 16 years. - [Gary] It was 16 nearly, I think. - [Mark] Yeah, I left in the beginning of 2013. But it was a long and anxious period that I was kind of working through. I mean things had changed, obviously Peter had gone, and the kind of vision for Lionhead was, well, a vision for the Europe Microsoft was free to play console stuff and it wasn't really, I wasn't really enjoying it anymore. I think that's the best thing to say. You know, I kind of, if I was going to do it again, I wanted to fall back in love with making games and-- - [Gary] You're quite an emotional person, if you don't like something, you let people know about it. - [Mark] And I sulk about it. - [Danny] Mark and Gary were free agents and worked odd jobs here and there for old friends. They enjoyed the easier workload after years of grind at the top of one of the UK's largest developers. Perhaps it was then, given the benefit of hindsight, that the two remembered just how much fun they had had working on those old games together. So it was then, one evening, when Mark was picking up pizza, Gary pitched him an idea about starting a small, independent studio, and working on games sort of like they used to, in a cramped old flat stuck above a stereo shop and a chain-smoking old lady. - [Gary] Yeah, I kind of didn't think. I thought, well who'd be interested in, you know, revisiting-- - [Mark] Two old farts you know, making old games, who's interested in it? And I think that was kind of-- - [Gary] We had to go on a journey of discovery. And actually it was when we started sort of talking to some people when we were still trying to find a partner to make this, we certainly realized there was a lot of interest. - [Mark] We did a tour, didn't we? - [Gary] We did a tour, we sort of went on the roads, and met up with a bunch of either, we were looking to either sell publish, initially, maybe do a kickstarter, or partner with a small publisher. We didn't know, you know, who would go for this. So we just sort of started looking into it. And we just literally got in the car, booked into a sort of cheap hotel, motel-type places, and just knocked on doors and that's how we started. Which was great fun because this was a couple of 50 year old guys, basically in a band back together again. - [Mark] And going on tour, so we just, our wives probably thought, look at them, they're pathetic. What do they think right now? - [Danny] Mark and Gary thought there might still be a thirst for their old sim games. The classic Bullfrog titles were still selling well over on GOG and new games like Prison Architect and City Skylines were creating a whole new generation of fans. They had considered crowdfunding the project at one point, but they were warned away by some of the developers they talked to during their road-trip. So, they wrote a pitch for a new hospital game that would evolve the ideas of a game they had made almost two decades earlier. They knew they needed financial help. The guys were experienced and understood the type of game they wanted to create would require more money and time than they personally had. They shot the pitch around to publishers, and while some were receptive, there was one in particular that seemed very keen: SEGA. They negotiated terms with SEGA from the end of 2015 right up to the summer of 2016. And as it happens, right as the deal was signed, news broke that Microsoft would be closing Lionhead Studios. So, somewhat ahead of schedule, Gary and Mark rushed to hire their new team. - [Gary] We kind of imagined we'd take them over a period of time, but Lionhead closed, and it was suddenly these brilliant people were out of work. - [Mark] Tons of brilliant people. - [Gary] And they weren't around for long. - [Mark] No, we were going to lose them. - [Gary] Companies were coming to Gilford doing presentations just going, "You should come work for us." And we, you know, we had to kind of promise-- - [Mark] That was a risky thing to do. Because obviously we had to sort of lay out a huge amount of our expenditure earlier than we would ordinarily do it, but the point thing is we made a huge advancement in the development in the game and also this team, I wouldn't swap them for the world. They're amazing bunch of people. - [Gary] Some of them have worked with us for over twenty years. But Alan, who's sat behind Mark right now, I think he was your best mate at school, wasn't he? - [Mark] Pretty much. I mean Pram, Pram reminds me of Chris. Pram literally knocked on the door, and one of the guys we've worked with for over twenty years, I hired him out of college. And now he's absolutely integral to this team. So that's the kind of things we like to do. It's to build those relationships. - [Danny] Mark and Gary founded Two Point Studios, and over the coming years built a team of 16 people to help make this game. Some were old friends and colleagues, others new kids on the block. Their game was going to be called Two Point Hospital. The spiritual successor to a Bullfrog classic. But it wouldn't be enough to simply re-make an old game. For one, Theme Hospital was a 2D game. When Edge Magazine came to visit the studio in the mid 90's, they barely took notice of it, as gamers were far more interested in 3D screenshots of games like Dungeon Keeper. But time would prove to be kinder to Theme Hospital. While those early 3D games aged quickly as 3D technology improved, 2D games have a sort of timeless, inviting quality to them. Plus, to create these sophisticated sandbox they were aiming for, Two Point Hospital would have to be in 3D. - [Gary] We knew how Theme Hospital had done better over 20 years and some of it's contemporary. - [Mark] So we needed to come up with a style which incorporated something that felt like it was fresh and up-to-date, but we felt if the game does have legs, if people do love this game and we can keep it around for long enough, won't look out of sorts in two, three, four years time. So, we went for something quite organic feeling, it doesn't feel like it's rendered, it feels more like it's made of clay or plasticine, and it feels drawn rather than engineered, - [Gary] And I think also that that art style back then was, with was certainly Theme Park and Theme Hospital had, we had quite a big proportion of female players, which back then was certainly unheard of for our types of games. Obviously something like the sims, which came later, it just blew their market wide open. But I think we didn't have an art style that was-- - [Mark] Exact not footing. - [Gary] Yeah, it kind of, it was accessible, I'm not going to be patronizing and suggest that, you know, we made something that was appealing to girls, Because I wouldn't even have a clue how that would, you know-- - [Mark] I think it felt accessible, it felt like it wasn't aimed at any particular type of gamer. - [Gary] Because you're looking at the game not from a fixed angle, you could be above or sort of, like, low down, you could kind of twist the camera. So a lot of these kind of considerations were kind of worked through and then, - [Mark] And then the US, is it Where's Wilbur in the US? Where's Wally? - [Danny] Oh yeah, Waldo they say over here. - [Gary] Waldo, that's it. And we, you know, to make something readable when you've got so much on screen, and I don't know if you need a screenshot with some of the later levels where you've got absolutely vast marks with hundreds of people on screen. To get a clean read and not get it to look noisy and kind of, I don't know, slightly put you on edge because everything's moving and they've been shimmering because everything's trying to fight for your attention was a real consideration for us. In fact, I've seen some footage that's just gone out last night, and the guy's captured all his footage top down. - [Danny] Right. - [Gary] Imagine being a designer or an artist trying to design a game that looks good from anything possible conceivable angle. It's really difficult. - [Danny] Theme Hospital was accessible, not just with both men and women, but with gamers and non-gamers, and young and old too. It was one of those games that was effortless to pick up. But after the first few missions, Theme Hospital's rough edges began to show. First of all the game got rather hard really quickly. And secondly, there just wasn't any interesting progression. Each level in Theme Hospital was almost identical to the previous one. So to combat this, the team created a world where each hospital takes places in a unique region with its own biome and its own unique needs. - [Gary] Because the regions are very different, the people in that area are very different, some are rich, some are poor regions, and some of the challenges are different. In some cases, you may be running a hospital that's actually funded rather than you get paid for curing people from the individuals, they don't pay, you just get a budget at the beginning of the level. And that just makes the plagues spin completely different, so we wanted to kind of make it stay fresh as much as possible. And also give people the opportunity to circle back and go back and do things that they probably struggled earlier on and keep that fresh by putting new challenges in there. - [Mark] And you have the ability to progress through the county reasonably easy. But if you really want to max out the game, you can kind of return to earlier hospitals, you can unlock things in later levels, you can do research, maybe unlock certain qualifications, come back to one of the earlier hospitals and train the staff in those things, upgrade those machines. - [Gary] So the game doesn't have that pinch point, which the original game had where it just got too hard for me, I think I got to about level seven and would find it a real struggle. And we didn't want to do that again. - [Danny] When I ask the guys about the features that excite them most, there's one that immediately stands out. Two Point Hospital features characters with a variety of personality traits that are not only affected by the world around them, but also by the people around them. They want you to care a lot more about your employees in this game, but more than that, this system has the ability to create wonderful emergent moments as doctors and patients clash with both each other, and the rules of the world. M This is what's real new cutting edge stuff is we've got this, the brains the little people now, is they've got these traits and of course they also have the conditions they're under combined to make quite unique animation blends, which means they do things, they react almost uniquely. It doesn't feel like it's pre-canned. You see somebody walk up to somebody and they'll respond completely different to the next person based on how those two people feel about each other. - [Danny] Could you give an example? Like is it, if two doctors don't like each other, or if they have a tough patient, or how does that sort of manifest? - [Gary] It's just patient is a good example, I mean, they as well as the personality traits, the things that are going on, if doctors has just treated a patient and they die, that has an effect on their happiness, they go on a break to the staff room, and that could end up in an argument with another doctor, and then just that argument could just-- - [Mark] And it's not all emotional, sometimes it's just that the habitual things, like you have a fantastic doctor who may just never wash his hands when he goes to the toilet. - [Gary] Right, now that has an impact on the game. It's not just funny, it actually has an impact and in fact, there was somebody who was showing the game to in San Francisco the other week, and this person has an amazing hospital, doing really well, but when you put the filter on to look at hygiene, the hospital is really clean, but all the staff are really filthy, and I mean you couldn't work it out, and she'd built this massive facility with a toilet which only had two cubicles and she put no sinks in it and no hand dryers and put no sanitizer units anywhere in the hospital. So all these doctors were working on all these patients, filthy. And we put this kind of filter over it and showed her all the instants of filth trails in the game, and Mark just went, I can see your problem. He said, "Do you ever wash your hands "when you go to the toilet?" And this girl was just so embarrassed and immediately went and put this bathroom, a sink into the bathroom, to the toilet. And all the staff just ran to cure, to wash their hands, it's that stuff. - [Mark] Everything in the game affects something else so the people, the machines, the way and the sick, and everything in your world is important. - [Gary] If you have a brilliant surgeon but he's an angry man or woman, right, your job is to try and work out how to diffuse that situation to get them to do even better. And that's kind of the fun depth that the game has. Maybe this person just needs more caffeine in their life. Maybe this person needs more weird executive toys in the office. Those kind of things, it's just you getting that extra ten percent out of their performance which is the real depth I think this game supports. - [Danny] As Gary just said in Two Point Hospital you can have an angry surgeon, man or woman. Another evolution from games past that shows not only just how far games have come in terms of representation, but also in terms of technology. If there's one thing I keep hearing when I interview designers today, it's that technology provides, it provides answers. Many design problems that used to exist in the past have been rendered moot by the advancement of technology. And Two Point's character variety is a perfect example of this. The original Theme Hospital had four main character types: A nurse who was a women, a doctor who was a man, a receptionist who was a woman, and a janitor who was a dusty-looking old man. So I asked Mike and Gary, why? - [Mark] It covered respective times people have said that we made a sexist game, but we had to make the game run in four megabytes. I mean, it was a time and memory, and it wasn't a question of, like, well doctors are just men and nurses are just women, it was just a question of like, we had to make a call with it, and I think you had new, you had different heads, but it was pretty much the same body, different jackets and stuff, and we couldn't have made-- - [Gary] I was really keen on skin tone was important. I did not want to have a particular skin tone, but we just did not have the time or the memory, mainly the memory. - [Mark] The character variation was important to us back then, and it was only 21 years ago but you very rarely got very different clothing variations and we did manage to get an element of that in. But the basic model of the man and the woman, that was the huge memory part of this. You know, so rightly or wrongly, I could have made a male nurse and a female doctor, I could have made a young janitor, I could have made a male reception administration staff. All of those things are absolutely true. You know, 20 odd years down the line it just seems critically incorrect but it wasn't our intention, I'd like to think we're quite right on. But the decision was made that the doctors were male and the nurses were female, rightly or wrongly, it was a call I made but I certainly didn't mean the offend anybody. - [Danny] But it sounds like that's something that's been changed for Two Point? - [Mark] Totally. - [Gary] Absolutely. I mean, you know, that would have, that's absolutely goes without saying, he's not trying to correct anything, it's just that we had no choice back then to make a decision, rightly or wrongly, but it was just never going to be a situation. I mean, we've got so many more other types now of staff anyway, and what they do is very different. I mean, and thank God our initiative stuff in this game do all sorts of things, they're not just manning, I mean the little bit of footage you've probably seen, it may look like, oh look, there's somebody on the reception desk again. They do all sorts of different roles. - [Mark] Yeah so we've got a marketing department which you open up later in the game, so the assistants can work, if they have the qualification, they can work in marketing, - [Gary] They're kind of civil-servant-y type people, aren't they. They do a cross of different things, but the other things is we've taken a variation to a ridiculous level now. You can have hundreds of people, in fact, somebody took a fantastic screenshot within the studio, it's on our Twitter feed, and it's just about three hundred people just jammed into section and no two, they're all completely different characters. We've got this amazing modular system which puts on things such as steam goggles if it wants to, you know, boots, every component can be different and it just randomly generates them. So you really are lucky if you see two characters that look vaguely similar. Certainly more similar people in Yorkshire than there are in our game. - [Danny] What excites me most about Two Point Hospital isn't replaying a style of game that I enjoyed in my youth, it's that this game seems to be free of the technological restrictions of its predecessor. It's full of neat little features like teaching janitors to vacuum up gDannys. So even that old dog has a new trick. The guys are busy finalizing the game so I didn't want to take too much more of their time. But before they left, I had to ask them the most important question: What new illnesses could we look forward to treating in Two Point Hospital? - [Mark] Turtle Head is an affliction where the head shrinks down to a very small and it has to be a, I'm only saying that because I know it's on our website. - [Gary] There's another one where the guy's foot is like a camel's foot and it's called Camel Toe and that has to be, that's not in there, it's just hardly been-- - [Mark] That was one of my favorites ones. I thought you liked it. - [Gary] Mark, he's trying to get that in the game. I have to say as well-- - [Mark] I say we've talked about it now in the press, so we have to put it in. - [Danny] Lads, you sound like you're having a great laugh. This sounds like a very professionally exciting period in your lives. Is that fair to say? - [Mark] I mean, 21 years ago, releasing Theme Hospital, that was an amazing time. We had such good time, and just kind of starting a studio and going "Wouldn't it be cool to be able to "recapture some of that kind of--" - [Gary] Actually we started our families. I mean, we both got married, you might have been before me. Side having your family at the beginning, I think-- - [Mark] Yeah, I hear you, Sam was born just as we started. - [Gary] There's a story: Sam actually worked with us here. Sam's Mark's firstborn, was born right at the beginning. - [Mark] Pretty much as we started. - [Gary] As we started, and he's one of the engineers and creatives on this, it's very odd, it's very strange, but that's what makes it fun, right, because we got to a stage in our careers where we just want to actually enjoy coming into work, not have to be some, the problem with games is you get promoted, that's the problem with games. And when you get promoted, you stop making games. You start becoming that person nobody likes. You have to get a game done, and it has to be done like this, and nobody likes people telling people what to do. So we've basically set up this company so nobody, we don't have to tell people what to do and no one tells us what to do and yeah, it's great fun coming into work everyday. I don't think we've had one day where I haven't felt this is the best thing I've done in my life. - [Danny] Two Point Hospital should be available to purchase on PC, Mac, and Linux around the time you hear this podcast. You can learn more about the game at twopointhospital.com. If you're interested in playing the original Theme Hospital and you should be, it's really good, it's available on GOG.com. If fact, if you're a fan of GOG, you should check out our documentary on the company and their game preservation efforts over on our YouTube channel: YouTube.com/Noclipvideo. I'd also like to recommend a patch for that game: Corsix TH. It's a tremendous community-created wrapper that updates the GOG version of Theme Hospital to work with modern resolutions with sharper graphics and updated menus. A wonderful testament to the fan passion that has surrounded this game for 19 years. As ever thanks to our Patrons for supporting our work. You can support our documentaries, this podcast, and more by joining up at Patreon.com/Noclip. You'll also get access to this podcast early via a special RSS feed. Thanks so much to Gary and Mark for their time, Lauran Carter over at SEGA for setting the whole thing up, and my wonderful wife for chatting to me about one of our favorite games. Sorry for the delay in getting this episode number two out. It was supposed to be up about six weeks ago, But then my baby girl decided to come a couple of weeks early. So we've been rather busy here in the O'Dwyer household. We have a bunch of fun podcasts planned for between now and the end of the year, so of course, keep this feed running. Until then, play some games. We'll talk again soon.

The Learning Leader Show With Ryan Hawk Episode #260: Mark Divine - How To Create An Unbeatable Mind At twenty-six Mark Divine graduated as Honor Man (#1-ranked trainee) of SEAL BUD/S class number 170. Mark served for nine years total on active duty and eleven as a Reserve SEAL, retiring as Commander in 2011.  His leadership of teams was so effective the government tasked him with creating a nationwide mentoring program for SEAL trainees.  He earned his MBA at NYU.  In 2007 he launched the SEALFIT program to provide transformational personal and team training experiences. The training utilizes an integrated warrior development model he developed, called Unbeatable Mind, which draws from his 20 years as a SEAL and business leader, 25 years as a martial artist and 15 years as yoga practitioner.  Mark has written has written four books, including The Way of The SEAL, and Unbeatable Mind. The Learning Leader Show "Do today what others aren't willing to do.  You're 20X more capable than what you think." Show Notes: Sustaining excellence: People who have practices that value excellence and practice it regularly Optimized training, sleep, and balance Mental health: Meditation, nature, learning, reducing potential to be stuck in biases Emotional health: Not afraid of going to therapy, spritual Why is therapy helpful? Mark married a therapist They can be an emotional coach "It's preventative maintenance" --> Must be proactive A "check up from the neck up" You should always be investing in improving your "self" Be mindful - yoga, zen.  It's an evolutionary skill to help you connect at a deeper level Why become a Navy SEAL? Got MBA and a CPA -- Got a job on Wall Street and hated it after three months Started Zen meditation... It changed his brain It created a structured program to look within himself and reflect Mark did not like what was happening in the outer world (with his job) He was meant to be a warrior and a leader Did he ever have doubts? No... Because he had prepared for the difficult moments through visualization and fully understanding his WHY "I created total certainty in my mind. 100% that I was going to become a SEAL. I won in my mind." This outlook helped him finish #1 overall in his BUD/S class How can we apply this to our world?  Outside of the military? You must deeply care about what you're doing... And then visualize your success. A "personal practice of excellence" "It must be something in your vision that you are really passionate about" "Visualize it as a completion.  Visualize doing it to completion." "You're the type of person who is worthy of completing that challenging task... Of achieving THAT" How do you respond to skeptics? The science backs it up... Do your research Give it a try... Why wouldn't you? VUCA = Volatility, Uncertainty, Complex, Ambiguous -- How to handle these situations Creating a decentralized organization -- Why this works in the military and in business (trust and certainty) Why you must "learn to embrace risk" -- Cannot be afraid of failure... And the plan must be flexible "Do today what others won't" -- 20X more capable than what you think "Society has weakened us... Everything is easy now.  You need to force yourself to do hard things." "Challenge leads to growth." "Your body will adapt to the new reality."  "Push it past where you think it can currently go" "You must challenge yourself every single day" Exercise - Write your own obituary.  Think "What would people say about me?" Do the deep self awareness work to "know thyself" "If you don't stand for something, you'll fall for everything" "Derive your passion around purpose. Create your set of principles." Originally, there was a scathing obituary written for Alfred Nobel... It was meant for his twin brother, but there was a mistake and someone wrote it about him.  It changed his life.  He was not aware of how badly he was thought of... And he became known for peace moving forward.  So much so... That they named a prize after him. How Brad Stevens and Bill Belichick have mastered the art of coaching Why the "hacking movement" is not good according to Mark There must be deep learning over many years to get to mastery level of anything Simplify = Be narrow on what you want, get rid of everything else. And focus Use the "Get To Know You Document" Social Media: Read: Unbeatable Mind Follow Mark on Twitter: @MarkDivine Connect with me on LinkedIn Join our Facebook Group: The Learning Leader Community To Follow Me on Twitter: @RyanHawk12

When it comes to buying internet businesses, is it better to buy big or buy small? Today we are chatting with Jeff Hunt of Own Optimize. Jeff has one of the largest web business portfolios we have come across here at Quiet Light. Through close to 60 transactions, he has owned a total of nearly 500 websites. These days Jeff spends his time working on his websites and educating others on how to buy internet businesses. After a career with IBM in the services business, a move overseas led Jeff to the internet where he started a real estate website. Despite a tech background, he didn't really know anything about websites when he started out. Soon he learned that buying them was much easier than making them and started to build his portfolio. Today we talk to him all about what to focus on once a website catches your interest. Episode Highlights: Start off on the right foot at the very beginning of the process. When buying a site, what you're really looking to buy is a quality website that you can grow and automate. Jeff's range of investment is typically sites valued at $50,000 and under. Of course Jeff experienced failure, 8 out of 10 of his sites didn't make it. He admits to being guilty of chasing too many things at once. Success for Jeff has come from a combination of buying and building. Making a smaller purchase is not always for financial reasons, it can be for a new buyer to explore whether or not they even like the business. When a buyer starts small they get an opportunity to learn the transaction process. Smaller websites can carry more risk. They may not have had enough time to grow. With large sites, you still have some leverage even if you come across hard times. Owning larger sites that garner larger revenue allow buyers to afford to hire a team. Before a purchase, study the heath of the business; the historical data, the ratios, and the percentages of cost that make up the total cost. The seller should have found the key to attracting new buyers and that knowledge can be passed onto the buyer. The buyer needs to really understand the business model and hone the process that the seller has achieved. Transcription: Mark: Joe, How are you? Joe: I'm good Mark, how you doing today? Mark: Good, good! I got to talk to another member from Rhodium Weekend, which is one of those events that we talk about a lot on this podcast, to talk to Jeff Hunt. Joe: I know. Jeff Hunt's a good guy. I think he's bought four hundred (400) businesses in his lifetime. Mark: Websites, a lot of these– yeah it's about forty (40) or fifty (50) transactions that he's done, so mostly some 50,000 dollar transactions. Joe: Pause, I said four hundred (400). Am I completely wrong? Mark: No, you're not completely wrong at all. So forty (40), fifty (50) transactions but whole of about 400 to 500 websites at all. Joe: Okay, got it! Mark: Yeah, can you imagine trying to manage that many sites? Joe: Absolutely not! –trouble doing my job here at Quiet Light that is an immense amount! Mark: Yeah, I know everyone recognizes you as a slacker. Joe: (laughs) Mark: So anyways, he's bought a lot of businesses, he's bought a lot of sites and he has a lot of experience on that. Now he's teaching people, he's got the website investor– the book that he wrote. And he talks about developing systems to buy sites, successfully. And he talks a lot about some of the mistakes he made along the way. What we talk about some due diligence, but also about this ongoing question: Is it better to buy small or buy big? Now what was better for you, what's– could've helped you avoid risk more and how's that changed from the years. He's got a lot of insights into due diligence that were fascinating and honestly, the interviews I've done, I kind of wish we would flip this one around because towards the interview, absolutely, really going to miss some good topics. Joe: It's interesting that the subject of should I buy a million dollar business for– or ten– how many thousand dollar businesses always comes up. And all we can do is thought from own experience and on what other people like Jeff have done. And I think, I've had Kevin Peterson on the upsell buying portfolio SAS business as he said– I think we've quoted him that it– it takes the same amount of work to run a million dollar business as it does a hundred thousand dollar business in some cases actually takes less because it's more established. And Jeff bought forty to– 5400 smaller sites, right? Mark: That's right. And we talked about that. I do think that running-a-large of business is often less work And I wrote an article on this, years ago, We have not been blogging for almost a year now because we've been focusing on the podcast but I did right an article on this rad. I went into the data actually to take a look at: What are the average number of hours that people are working on smaller sites versus larger sites. And what is the average number of staff and how does that correlate with revenues. Really some fascinating data in there, so excited. I got to transcend you deep dive there. So all in to that much show notes, anyone wants to do some further reading. But larger sites, they're often less work. And in some ways, that's risky because there's– you have more cash flow and we talked about that. If you have a business that's– that has twenty (20) thousand dollars of revenue and you lose a key client or you lose a key-traffic source when things get cut in half, you don't have but ten (10) thousand. Joe: Absolutely! That's why, just to say it so people hear it that the– the multiple's evaluation on these jump when your discretionary earnings is up that million dollar mark, you're going to jump significantly in terms of the over-all value not– obviously because of numbers but because the multiple actually jumps too, from a– let's say from a three (3) to four (4) for an instance. Mark: Yeah and I was talking to a potential client the other day who has a business who– it's multi-million dollars of revenue but the earnings are starting to have troubles and he said, “Would anyone buy this?”. And I explained to him that if a business has millions of dollars in revenue, even if it's struggling from an earning stand point, yeah, that's going to really negatively affect the business but this is probably still is soluble. But if you have a business that makes five (5) or ten (10) thousand dollars a year in gross revenues and isn't making any money probably not going to be sold. An orgs couldn't be very difficult to sell for anything of value, so can newly certain size? It's just more flexibility on the part of a buyer. Joe: Yeah! But Jeff has a different model in system and he's buying lots of smaller one's so he's doing something very, very right. Different than your blog couple of years ago, talked about so be real interesting series got to say. Mark: Yep, let's get to it. Alright, hey Jeff! Thanks for joining me. Jeff: Hey, it's great to be here, Mark. Mark: I know we know each other from a mutual group that were both part of. And people who have listened to the podcast before will be familiar with this group, at least you've heard of it before, and that's Rhodium Weekend. You and I have attended it from the past some years, right? Jeff: Yeah, love–met a lot of fantastic people–Rhodium is a good– as you know, it's a group of people either buying, or have already bought in to operate online businesses so it's kind of really unique crowd and be part of it. Mark: Yeah, if anybody wants an introduction 0:05:43.3 let me know, I'd be more than happy and of course, Chuck will surely be able to provide that as well. Chuck Mullins who works at Quiet Light Brokerage, introduced me to Rhodium. And really– Chris had actually stopped me, but really Chuck encouraged me to go. And it's been a good investment of our time and place. It's good group and I met you there few years ago. We talked at the conference and we've seen each other at conferences since then. I think the last time we met in person was Afilias somewhat last summer. Jeff: Yeah! That's right! And I met Chuck there I think the first time at Rhodium and I formed a number of partnerships there so it's a great group of people, it's your (0:06:22.0) way around the business that were in. Mark: Alright! So, let's start getting into little bit in the– as our listeners know, we usually love our guests introduce themselves. So if you want just give, just kind of quick background on who you are and what you do, that'll be really helpful. Jeff: Okay. Well, you know, I maybe one of your older guest– I don't know but if the white here kind of gets it away a little bit, I'm in my fifty's and I'm still on the website business so… Mark: Oh, my! Jeff: Kind of funny like the bunch together that we hangout or they're a little bit younger than I am but I give them a run through their money. I actually started out in the corporate world. Probably like a lot of people buy websites and I had a crew with IBM and I was in middle managements. I had a pretty lardge organization, people who were in to service this business. So, big companies with give us their I.T. departments to run so I had development organization, infrastructure guys, and a lot. And how to buy a budget of about twenty five (25) million dollars, at that time. It's kind of funny that even though I was kind of that technical business, I didn't know anything about the internet at all. And so my first introduction to the internet was actually I started a real estate business. So I moved overseas, left IBM, moved overseas, I started this real estate business and I realized it needed a website. And so, I kind of just dove in and I learned out to do all the websites, staff and crew website for this business. And then after that , I– you know, my eyes kind of got opened to the side of the all. Starting website really hard and so I started looking at as ways to buy them. And I started buying websites and over the last ten years I actually– I've done probably fifty (50) or sixty (60) transactions and about something like three hundred (300) websites, actually probably closed to the five now but while it does ring, big groups like networks of websites that did some more functions than those kind of things. So– Then along the way, I kind of wanted to leverage some of my assets. One of my assets was just– I have been doing this for a while and you know, having my fingers and all kinds of online businesses and different business models across all the sites. And so I wrote a book called The Website Ambassador and then I've done courses on website investing and some networking like at Rhodium and other places and stuff. I really enjoyed this– I just love– I really love almost everything about online businesses. And just the lifestyle part of it but really like the analytical part of it, the marketing component and operations component. Component is just– is just low fun. So that's my story. Mark: So– I'm sorry, you said three hundred (300) and four hundred (400) websites in total? Maybe more? Jeff: Yeah! Like one of my purchases is something like two hundred and fifty (250) websites that were– I can't even read the domain names. They were German and French. And there were these affiliate websites selling Amazon FiliA products and to Amazon Germany and Amazon France. And I ran with those for couple of years some of them died off and then I sold them. Mark: Oh, okay. How in the world do you begin to even manage that many sites? Jeff: Yeah, well–you know, that's one of the many mistakes that I've made I think in the course of my website career is buying too many and chasing too many ideas that looks really interesting like– it's probably happen to you. Maybe it hasn't happen to you though like I see these things and I think “Woah! That's a very unique business modeling and that's really cool. I like to learn more about it and pick it up. Like uncharmed by those particular sites, actually those who're kind of template sites and so there was a lot of automation. There were programs that could make the same update to, ten's, twenty. Sometimes more sites at a time. So that's how we managed them. Mark: Okay, That makes a little bit more sense. Now when you say that you've been buying all these websites, we don't have to talk specific dollar amounts but who are we talking about larger sites, smaller sites, what's the range that you really been investing in. Jeff: Well I've bought in– again maybe this is something I would do differently for starting over again but most of my sites for sub- fifty thousand dollars only handful of that amount, just a lot of them as like mentioned. And I've done kind of a combination of buying and then building and typically for me the cycle's ban or buy something that I don't really know that much about like I started out with Google news approved sites and merely day so I bought a dozen different news site over time but then after a while after a year or two into that, I really understood that news business borrowed so it was very easy for me to actually create my own news websites and then go from there and I've done some more things. For example Mozilla site– so one of the reasons that we buy is because were learning something, were picking up. Were kind of learning from something that's already working. And then later on if you want to add to it by building from scratch, that's kind of a logical sequence for me. Mark: Yeah, alright, let's dive in to that topic a little bit because we get that–this question a lot from potential buyers, especially first time buyers. People that might become mean and in. They know that they want to get in to the website business or some sort of online business, they're coming from the corporate business world like you did and they might have good enough money to do a larger deal but their wonder, is that the right thing to do? And I think you might have touched a viewpoints here which might be interesting. let's talk about, specifically, let's just start with the benefits, binds small to start. You've done a lot of bind small sites and smaller sites. What were some of the big benefits that you've gotten from that and then maybe later on we can move in to some of the drawbacks from that. Jeff: Okay, yeah! That sounds great! And one of the first things that I say when I get that question by big or small is: Whatever you buy, it needs to be a good quality so it needs to be something that's very stable no matter how big or small it is. So, kind of get to your specific question, what are the benefits of buying small, first the obvious one is that you're risking less capital and for many people, that's important, especially when they don't have that experience that leads to the confidence to something bigger. So that's kind of important. And many people are running to ask me that question and it doesn't even matter what their capacity is. Some of them have a capacity in capital to buy very very large websites, multi-million dollar websites. They still don't want to do it. They want to spend five (5) thousand or twenty five (25) thousand or something like that and the reason is because it gives them the, yeah. One of the things that they think about necessarily is they don't even know what it's like to be a website owner. So it isn't just the risk of the money but they're not even sure that they'll enjoy the– be and stay which is being the owner and upper of your website. So that's one thing that binds small can do. Kind of give them a taste, what it's like. And then secondly it gives them an exercise of the transaction process. That's as you know, the transaction process is quite different from very small sites than from a large one but at least they're going through the steps of– during the evaluation, looking, evaluating, waiting, executing a transaction, setting up the accounts, perhaps hiring the team, and all of those kinds of stuff. And then some basic things that if you've never been on the website business, you've never done before like giving hosting setup and domain ownership and some of those basic things. So that's kind of the value. And the other thing is that, whereas the dynamics and management of large versus small can be quite different some of the basics in terms of the actual business models behind the sites are actually quite similar. So the content website monetized by advertising is very similar too. Whether it's big or small. Just the mechanism and process you put around that are different. So if you're unfamiliar with the business model, you can pick up some familiarity from buying a smaller site. Mark: So, you said that I think it's a key point here, and that is bind for education. And bind small for education is something that you've done quite a bit, in where you bought, you've learned in this industry a net shore, a style of online business. And I've been able to use that as an education, they will build your own as well. I talked to buyers a lot about their first purchase and an advice to buy smaller if they want to get that education set, understanding that, can you talk about that a little bit more how you've used buying small to be able to learn more about the nature, about the business style? Jeff: Yeah, that's excellent accredit in general sense education and one of the ways that we educate our self is through relationships and at working and so really, the important part when you buy a site is the relationship that you have with the seller and those have been valuable to me. I meet so many really , really instructional, educational relationships, from sellers who– and that starts with setting at the relationship– setting off at the right flow with the relationship at the very very beginning on the process. But many of the sites I bought I got really good coaching, I have relationships to this day with people that I bought sites from eight (8) years ago who were entrepreneurs, they figured something out. Most– as you know, most business is fail. Very high percentage of business is fail, off line or online. And even at higher percentage of online business is fail, been off. And I think it's just because more people try at the online business but when you have any site that's been around for a while and it's kind of built up a following and so on, is one that hasn't fail or at least not yet. And so the entrepreneurs who're able to do that and figure that out, a lot of times, they know things that you want to know from them so the key thing is actually learning what has been built, what the process is, that they use to attract customers and we'll probably talk more about that later. I hope we could. Mark: Yeah, I'll get you to talk about whatever you think will be worth talking about. I do want to talk a little bit about the differences though on bind big versus small. You mentioned in there one of the benefits to bind small is you're obviously risking what's capital. And I would completely agree with that. I mean, it's pretty obvious, if you're buying a million dollar site to buy in a ten (10) thousand dollar site, there's significantly less at stake. When I tell buyers to buy small, initially, often times I'd tell them that and say, you know, be prepared for a little bit higher risk profile. And in my experience in– feel free to disagree with this , that's in my experience buying small often comes with a little higher level of risk. I know you said you have to buy quality. What's been your experience as far as the quality businesses that you bought in this small range? Jeff: I totally agree with you and the reason that buying small carries more risk is because most smaller websites don't have the same age. They don't have the same momentum they haven't necessarily withstood the test of time. And what that really means is, in the internet business they change really fast so new competitors enter the space, there's changes in technology, changes in software, and most importantly there's changes unlike the big players like Facebook, Google and the like. And they're making policy changes and all those things, so when you buy a smaller site, in most cases, they may be successful, cause they're flying under a radar of sorts and they haven't been around long enough to see the change from desktop to mobile or from easily making Facebook ad purchases to a more competitive environment, faced to capture all those things, so as a result, the lower in sites is almost always more risky. Now obviously, you can mitigate the risk the longer you look but sometimes it takes a really long time to find the site that's– that has true stability. That's still kind of that low end so, yeah, that's right. So my experience with that, that answers a specific question is that I've failed a lot of times. Probably, my early sites that I bought, I bet you eight (8) out of ten (10) just didn't make it. Either they didn't pay for themselves and some of them might've made almost no money, most of them made some money but not nearly what I wanted and then they kind of take her off. It's hard. Mark: I found as well what larger sites having that extra cushion more discretionary earnings and more revenue, gives you a lot more ability to, not to make a mistake and absorb it. With the small site, if it's only generating twenty (20), thirty (30) thousand dollar per year, if it loses a major source of traffic, all of a sudden that twenty (20), thirty (30) thousand will go down to five (5). And now, all of a sudden you're questioning why I'm even doing this anymore. Where, you were as a few–you have a business's doing five hundred (500) thousand dollars a year and discretionary earnings and it gets hit hard. You're still probably making six (6) figures and have some leverage that are to be able to– may buy yourself out of this situation or fund what needs to be fixed Maybe place that better or so, there's a little bit of subordinate there. Workload as well, I mean– I've found in your website, in some sense, I found that with larger sites, sometimes that workload can actually be less because you can afford the higher people, where as with other site that's kind of on the edge. And I ran into this with my first company actually that I owned, I got it to a hundred twenty(220) thousand dollars in revenue and really I needed to hire people but I needed all the money. I was getting so– I couldn't really afford six months of that financial hit. What's been your experience with that? With dealing with casuals and maybe the freedoms that casuals would– of a large business would bring you? Jeff: My experience is exactly what you said where– and in fact I have websites right now where I'm forced to do things that I really shouldn't be doing, I should be spending my time thinking about the strategy, looking in for competition, time plotting on a road map, and in managing people on. And some sites is just aren't making enough money for me to hire someone to do that on month you have. So that's absolutely right, that when you get that, and you know– as I mentioned I– that there were intersections and that I've done everything where I sweep the floor myself, so I kind of gone the whole gimmick and certainly when you have a team then it really freeze you up to use your mind in a different way and that's a lot of fun if that's kind of where your skills are, what you want to do. So definitely not to big advantage of buying big. Mark: Alright, so you have done– how you told me at the beginning, I didn't worry about, how many transactions again, estimated? Jeff: Only sixty (60). Mark: Alright, that's a ton! I mean quite label with more or less than a thousand for ten years, that's with lots and lots of buyers and sellers. Sixty (60) percent is a lot. I'm going to put you on the spot and if you don't have an answer for this please just ignore it. I'm curious, what's one of the craziest thing that you can share that you've ran across in your process of buying sites? Jeff: Well. you know, I've ran across more than I– there's some crazy one's I've ran cross that I haven't bought. But there's several of them, one of them that I talk about in my book is– I found this site that– I had a hard time finding out what product is sold but it was insanely profitable like nine (9) percent profit margins but it was an E-commerce site. So it was a hard physical good and when I looked into it carefully, what they were selling was a urine. Laboratory processed urine for people who're trying to pass drug tests. And so they said, after I finally understood exactly what their product was, I understood why it was hard for me to understand, because they didn't want to like, advertise it too much that they had to do it enough to be on the safe side. Mark: There you go. One of the first clients I took on was selling poppy flowers and they were selling them for couple rearrangements, I may be naive. I had no idea that they were used for opium as well. And I had one person tell me, one buyer was like, “So are you okay with selling drugs?” I'm like, “What? What are you talking about?” Ends up, they were not, but there is people buying the poppies. At least my theory at probably buying the poppies thinking that they were buying drugs. They're probably just get stomach ache. Jeff: Alright, well, you know, that's interesting you bring that up because it's an example of one of the subtle eficlosures and we ran into this issues a lot in this business crossly, even for sites that you would think don't really have controversy around them. We ran into this kind of things. So it's one thing that buyers should be aware of. Mark: Let's (0:23:21.2) to that because you've got your course to write your book as well. Your course is at website investor.com? Is that right? Jeff: Yeah, ownoptimize.com is a good place right now. Mark: ownoptimize.com, Okay. Jeff: Yeah! Mark: We'll link to that in the troll notes so just go over to our website and look in the troll notes for the course, the online course. Let's talk about some of the lessons that you teach in this course. Obviously, we'll keep the best secrets for the courses. So– but, what are some of the things that you try and teach buyers who are taking your course? Jeff: Well, one of this– I don't want to over simplify and this may just sound too simple but one of the biggest mistakes I think that new buyers make is they don't just look at the graphs. And it's amazing what this simple graphs can tell you, the direction of the traffic, and the direction of the financial, those two simple things are really, really important. And a lot of times when you look at a graph, let's say twelve (12) month graph and it's– you can kin od tell visually that it's down or gently downwards sloping, but in truth it may actually be like twelve (12) or twenty (20) percent downward sloping and if you just extrapolate that into the future– I mean, business is going to be worth nothing in just a few years and so I think people tend to have an optimistic view when they look at numbers and sometimes they realize that their businesses that are losing money overtime and they feel like the moment that they buy this site, it's going to stop losing money, it's going to start– it's going to be flat or go up from there and there's no real reason to think that. So that's kind of really simple but that's a way that you can dismiss a lot of sites unless you have really specific knowledge about why it's going down and a very specific idea about how you can turn it around. Now we can talk about that way or two because a lot of people– that's hard to really know for sure. So then you need is just to stay away from those kinds of sites so we need to look–. So overall, key thing is you look at the graphs, if it's a stable business, you're looking for a stable business because the most important thing is– I kind of teach a risk-based methodology but for valuation and also for valuation-selection websites so for me, real core thing is you're looking for the engine for customer acquisition and you can– all kinds of sites she can evaluate, usually the successful ones. The owner, the creator, has found a way to systematically attract new clients and if it's a content site and the client is website visitor or if it's a services site, a client, whatever it is. And that process–whatever the process is, it might be toasting the Facebook every day, it might be buying Google ad words, ads, it might be just content creation regimen, it might be a product launch, philosophy on Amazon like these kinds of steps, I'd choose these kinds of products, I'd brand them in this way, I'd quadrant them in this way. And the process may be –it may not be like mind blowing in terms of what it actually is, but it might just be very consistent and perhaps complex and blast. and whatever that process is, it's that– is that engine it drives the site, that's really what you're buying because if you can get your mind around it and understand what it is that they're doing that attracts these customers consistently and then you can start envisioning how you would do that yourself and perhaps, how you would scale it, how you would tweak it to enhance it, then that's kind of the whole agree, So you want a process like that but you feel like doesn't have a hauls or gas in it, like you can see why it's working and how it's working and you get your head around that then you know the business model and then if it's historically if it's a cheap pretty solid results, consistent results, there's always going to be pivoting and changing strategies and so on but you get a model like that, that's kind of what you really want to buy, to probably grow what you're trying to buy as a buyer so that's kind of a key thing and then there's all kinds of methodology around you, valuation. We look like — there's like several dozen things you can evaluate that there's content and ownership and reasons people are selling and the financials and branding, legal aspects–all, all those kinds of things that you want to look at but the core thing is that how do they get their customers and what's the risk profile on this side. Mark: So how do you– how do you, work for– so that's really, really good advice, understanding the customer journey from beginning– from top of funnel, just awareness of the site that you're looking at down to the actual acquisition of the client. Right? How do you handle that insane environment like Amazon or were dealing with all the market places or even with– I guess with E-commerce, you do have a customer journey but have you worked much with Amazon to see how you would evaluate that? Jeff: Well, no, I don't have a lot of very specific experience with Amazon but I can tell you that– Amazon FBA is actually a very sophisticated business because there are so many elements of it and you have to do each of them quite well, actually. That's one of those cases were it's not just a simple three (3) or four (4) silver bullets and you win. It's like the people who do Amazon FBA well, do a lot of things well. They do product selection very well. Niche selection first, product selection well, then they understand the launch process like putting the right brand on their product and giving those initial reviews. And they understand the inventory process. They don't have cash problems with having generating a man and then having nothing to sell to people. Then they have to understand the operational aspects too like how do they wants making sales, how they actually get the product out and in a good way and then servicing the customers later on and answering their questions from there, just get a review and so it's really kind– it's a complex process so the– what I just said earlier about what's the engine behind it, well in that case, the engine is, are there good SOP's, is there a good team, is there like –what's kind of the new ones that has a loud– like some people, super good at branding and they're super good at that product launch process in Amazon and so that's kind of what's giving them the edge over the competition and other people were good with analytics and numbers and ratios and shipping cost, cost of good sold to whatever they're spending on customer service and all that kind of stuff. Which that's all fine but it's kind of that it's up front-end that's probably more important in Amazons like how they're interacting with the customer. Mark: Well this is why it's so important for pre-sellers to document their processes because a lot of this stuff is done almost from a skills like that is developed over years. Having those processes, documented, the stuff that you're doing on day-to-day basis helps buyers like you, Jeff or any of the buyers out there understand what's going on and try to sum it– that is as well. I want to go back about what you said about graphs because that really caught my attention. I–I'm with you on that. I love graphs. I think visualizing data, specifically the financial data is something people don't do enough. And I might geek out a little bit here, and save my finger craft that I used when I'm evaluating business myself, is year over year analysis that I like to look at both the revenue and to those gross profit. Definitely take a look at that if you're able to, if it's done on cruel basis. My discretionary earnings, it was a year-over-year because it soothes out some of the seasonality that you're naturally going to have in pretty much every business (0:31:12.3) has, even a little bit of seasonality. Is there a better–like a favorite approach or favorite sort of graph that you would recommend or any other piece of geo that you would look at to say, “Hey! Here's kind of a peak into the future or maybe what the drafts of help of these businesses” Jeff: First of all, I love year-over-year analysis too when you have a business that has enough historical data out there to be able to do that, and that's really, really helpful. But in terms of adding to that, for me, one of the important things is ratios and if you have a numbers degree, whether it's finance or accounting, whatever they teach you about that. But actually it's simpler than– you don't have to learn what you do in school. What it is, is your looking for things like the percentages of the cost that make up the total cost of the product or the service and a lot of times you can find problems where, for a few months, shipping was a lot of money or cost of product or cost advertising is a lot of money and then there's–and then some of those cost drop-off where the ratio changes, the percentage change radically. And for me, those are kind of– a lot of people are afraid of financial analysis in funnels but actually, we understand that what you're looking for is kind of that stability in the business and then a little– the flags or things that changes in the ratios, changes– the peaks and valleys in the chart. And is there good explanation for those peaks and valleys. Peaks and valleys are just fine. The only concern is what are the reasons behind those peaks and valleys and sometimes, for example, sellers, so they really have– they may not have any idea why they're getting more customers or any idea why they lost customers. And the big problem with that is that when you buy the site and something happens, you're not going to be able to get those customer back if you don't know the reasons for those things. So some of the tools and things that I look at. And also just say, they kind of end in the evaluation stage and stay on in due-diligence stage. One of most important tools for new buyers is to compare different sources of information, just in the content, for example, a lot of times, you'll have analytics reports then you have your ad network reports and sometimes you have bank statements, you have taxes, you have– you actually, a lot of times have a lot of different sources for very similar information and it's important to kind of compare those sources together to see if something's missing, something's kind of wack. And it kind of really helping, so in E-commerce is same thing, where a lot of times you'll have traffic and saying why I'm getting this many sales, repay-dues and then you have shopping cart software on your website, you have merchant processors who have similar data and then whatever is in half-thing in your back account and all of those things that's lying out. So , there's actually some, pretty simple tools, once your kind of aware them to take the mystique off of what're people are a little bit concerned about when they first enter business. Mark: Wow! there's– I kind of always restarted with this, rather than buy a big verse and buy a small sort of conversation that is a lot of details you get in to hear, but we are up against clock a little bit here. I think this idea of understanding the customer journey, understanding how they become customers, and the process they're involved there both can help any buyer understand how healthy a business is and how new was or how specialized they're going to have to be in their–works with that business but also potentially uncover some opportunities if there's leakage, for example in that customer journey wherein you're losing a lot of people at a certain step maybe they are taking advantage of cart abandonment technologies or maybe they don't have a good e-mail automation. Well these are opportunities that might be available for buyers. And then also this idea of looking at ratios; really, really solid advice. Jeff: Yeah, the ratios– what I will do again when I'm evaluating business is I'll look at cost of good sold– gross profits were the first things I will look at. Is that ratio staying healthy because you don't want a business where that's getting squeezed up at time or at least you need to understand that. But also you compare advertising to total revenue are you having to spend more just to keep the same revenue? Or has that owner adjusted another area so maybe they're spending more but cutting back on staff–But to make the bottom line look healthy but ,maybe lying underneath there's a few issues that you have to be aware of. Mark: I would love to sit and talk for a couple of hours because I think we could talk for a couple of hours. So, maybe what we'll do is we'll have you on again in the future and we can continue the conversation. In the meantime where can people learn more about you? Jeff: I've a website called “HeckYeah.org” and then “OwnOptimize.com” is where I'm selling my courses right now. So those are the two places. And yes Mark, I would love to– this is one of my favorite topics really is this idea. First time buyers, second, third time buyers; what are the questions that they have, which they look for and as you said, lots of things we could talk about. We're just barely scratching the surface so I'd love to come back and talk some more about it. Mark: Cool! Hey Jeff, thanks for coming on. Really appreciate you coming on and well, stay in touch. Jeff: Yeah, sounds good, great. Thanks a lot for having me. Links and Resources: Jeff's Website Jeff's Course The Website Investor

Show Transcript [Section I: Introduction] Welcome to the Work Stories Project. I’m your host Carol Xu. Oh, workplace assholes. Have you ever worked with one? Have you ever wondered what’s going on in their head when they’re making other people miserable? Well, I’ve got an interesting story for you. We’ll hear the victims’ perspective first. Then, we can also get into a workplace asshole’s head and poke around a little and ask him questions like “So, were you aware that others regarded you as an asshole? And how did that feel?” So, let’s get started.  [music] [Section II: The Coworkers’ Perspective] Our story took place in a silicon valley startup named Bisnet in the early two thousands. The main product of the company was an online platform and database to help other companies manage their employee data, such as payroll, insurance, and employee benefits. Mark was the lead software engineer in the company. He was regarded as the workplace asshole by many of his co-workers, especially the implementation coordinators. The implementation coordinators, or let’s call them ICs from now on, had to interface with both Mark and the clients. They just HATED working with Mark. Here’s what Letitia, an IC at the time, recalls her experience working with Mark: Letitia: He wasn’t very popular. Some people thought he had a self-righteous attitude. And he was exhibiting more signs of “Well, I’m the most important person here.” For example, Mark once proposed in a group discussion that as the web master of BISNET’s website, he’d like his email to be God@BISNET.com Letitia: he wanted that to be his email for if you have any questions or comments about this site or whatever. That was shot down rather quickly. But that’s kind of how he saw himself, at least in my eyes and other people. I think they thought he viewed himself as God of Bisnet. Miles, the executive vice president at BISNET at the time recalls going to one of the Company’s Christmas parties. He heard Mark’s mom talking about Mark in front of the group, Miles: His mother would try to elevate his status and raise how important he was… And so, we already know what Mark’s ego was on that topic. And you got the mom. And you saw some of the dynamics going on. That’s what I remember.   Although Mark didn’t have any formal managerial power over others, he played an indispensable role in the company. Because he was in charge of developing BISNET’s sole product, the company’s business to a large extent relied on his work. Miles likened Mark to someone who holds the keys to your car. Miles: Again, the situation was challenging when you got somebody that’s hard to work with that holds the keys to the car. It’s not a place you’d like to be. He had a little bit free reign, because he could do what he wanted, because he had the keys to the car. If he walked, we would be in big trouble. In everyday work, the ICs felt like they had to beg Mark to answer technical questions or to improve the software to accommodate customer requests. Here’s Letitia again, Letitia: Oh, there were many people that just hated dealing with him at all. It’s like they would do anything to avoid having anything to do with him because there was a little bit of the “awkh, what do you want now?” kind of thing. And the conceit, you know, ‘you need to bow to me because I’m the one who’s gonna be able to fix this for you.’ That doesn’t always work very well. (laugh) I ask her whether Mark had the power to directly affect her job security, Letitia: while he may not necessarily have the power to affect my job directly, he could affect how things got done for the customers that I had to be face-to-face with. And that’s a biggie, because I had one customer that, while I was face-to-face with her, she started crying because she was spending so many hours fixing problems that the system was creating. That made me feel just awful! I wanted to fix it for her. I probably thought that I would piss him off and he wouldn’t get my customers enhancements or requirement changes taken care of. And then I’m still hanging out there having to face the customer. It became more of a personal ‘I’m gonna do this for you,’ instead of ‘my job is to improve the system for our clients.’ And that is dangerous territory for any employment situation, any professional environment. You can’t make it about a personal situation ‘I’m doing this for you.’ More than 14 years later, Letitia still vividly remembers this one time when the whole team including Mark were working on a project overnight,  Letitia: I think one of the things that he emphasized was something like ‘I can always find another job. I’m just worried about the rest of you.’ Oh wait a minute, what you were saying is that none of the rest of us is bringing any value. And we are here because we can’t get another job? (laugh) It’s a real put-down. I also get to talk to Bret, one of the few friends Mark had in the company at the time. Mark introduced Bret to work at an IT support position at BISNET. Bret recalls that Mark liked to argue with others. Bret: I saw a few times he would... He was really good at arguing. [Laugh] He should’ve been on the debate team when he was in school, because he definitely had a point of view and he defended it till the last. I’ve seen incidences where he would…He didn’t exactly yell, but he made people feel small. Like he wouldn’t out loud say ‘you are an idiot.’ But he would essentially imply that with what he would say. I did hear that a couple times. Making people feel small—I really like Bret’s way of putting it. It kind of summarizes our experience dealing with most assholes. Why would they do that? I’ve got to talk to at least one asshole to find out! [short music break] Section III: The asshole’s perspective          So I manage to have a series of long conversations with Mark over the period of 3 months. You may wonder whether it is hard to track him down and get him to talk. Well, it is easy in this case. He happens to be my husband. And in fact he has volunteered the story to me.           He worked at BISNET long before we met. I had little knowledge of his BISNET years. When he shares the story with me, I treat him just like any other story contributor to the show. I don’t try to make him look better or worse than who he is or was. My role is to provide a special space for reflection. Imagine a space where you can feel at ease and be yourself without any internal or external judgments. That’s the space I hope to co-create with all my story contributors. You may think of your work experience as monotonous and boring. To you, it may taste like bland water. But to me, every drop of your experience has a unique sound and feel. I want to be a soundboard that reflects all kinds of qualities in the human experience of work.           Mark and I start our first free-form conversation in our living room on a Saturday morning. When I ask Mark to tell the story from the beginning, he starts with his back story. Mark: Well, I think it’s important to hear a little of my back story. It kind of helps to explain things. Keep in mind that the people at the company didn’t really know much of the back story. They didn’t know what to expect from someone who had my history. In any case, the history is I grew up poor. My dad wasn’t around… His parents divorced when he was two years old. At some point in his childhood, his family relied on social welfare to survive. He taught himself computer programming in high school. BISNET was his first full-time job. He was 21 when he started. To his surprise, some big companies started to use the program he wrote.  Mark:…We eventually got some big customers, like Ebay and Etrade. These are software companies and they are using our software to manage their online employee health benefits. So, that was kind of mind-blowing. So, it was kind of a mix of humble beginnings and being in a very unfamiliar situation for which I was not prepared. And also a situation that kind of blew up my ego a little bit. I thought ‘well, I must be pretty good, if we are having so much success. And it’s just me by myself, bla bla bla. But at the same time, I’m think ‘well, the software has all these problems. The website is kind of ugly. I’m not really good at design… Anyway, the whole thing was just emotionally weird for me, not really negative or positive, just weird. It was all surreal to me. So, the kind of humor that I would engage in would be the stuff that, in retrospect, is really only funny to me, because I don’t think it was very surreal to anybody else. I was the fish out of water there. But they were used to that environment. I ask him to give me an example of his jokes. Mark: My jokes would be about how surreal the whole thing was to me. So there was this one incident that really highlights that aspect. There was an investor meeting. They had a series of A fundings, series B and series C, whatever… So we had this meeting where the investors are meeting the employees of the company in this big conference room. And everybody’s introducing themselves. And I said something along the lines of ‘I am the original programmer. Almost all the code is written by me. So I guess that makes me the God of Bisnet!’ Carol: And you actually threw your hands in the air? Mark: Something like that. I thought I was being funny. But there was this kind of silence in the room. And maybe the perception was that I actually thought of myself as the God of Bisnet? Maybe they thought of me as not being the humble nice guy that I thought I was. And I always just thought of myself as the nice guy, the nerd.” Carol: So when you said ‘I guess I’m the God of Bisnet,’ what was going on in your head? How did you feel when you said that? Mark: [pause][sigh] I don’t know. There was some pride mixed in with all of it. It was pride plus also just the feeling of absurdity. So it was both of those things. I grew up in an environment that encouraged putting all your emotions on your sleeve at all times. Just be honest and always tell the truth. I kind of have faith in that as a way to get through the world, as way to interact with the world. Everything would work out in the end, if that’s the way you live. Because it did in my house: I would do that and stuff would come up and we would talk about it. And stuff would get dealt with. Carol: So, for example, if that happened in your family, you would say ‘Oh, look I’m the God of this family!’ Mark: [Jumping in] Everybody would laugh and go ‘yeah, right!’ They wouldn’t be afraid to take me down a peg or whatever. Maybe everybody in that (conference) room thought if they laughed at me, my ego would be hurt. As far as I know, I’m not really that averse to having my ego hurt, if it means I get a laugh. I’m happy to give up my ego for a laugh. I was giving them the pitch, and nobody swung. Carol: So to you, it was a joke. Mark: Right. Carol: And you were waiting for a laugh. Mark: Right. Waiting for someone to take me down a peg. Gary [Narration: Gary was the founder of BISNET] could’ve chimed in and said, ‘Well, I don’t know if we’d be here without me, Mark?’ Somebody could have said something. I just didn’t want things to be all stodgy all the time, people holding their cards close to their chest. Just get it out there and have a discussion. If I say something absurd or stupid, just say ‘wow, Mark, that was pretty stupid and absurd!’ I’ll be like, ‘yup, sorry!’ (laugh) You know. Just have more fun. So that’s my perspective on it. Carol: And yet the investor meeting is supposed to be a serious thing. You are supposed to give a serious front and give them a good impression. Mark: Yeah. If I were any older, maybe I could’ve figured that out. But at the time, I needed somebody to tell me that. I didn’t know what an investor meeting was. I didn’t know what any of this shit was. I didn’t know what I was dealing with or who. I don’t know who these people were. They were just white men in suits. When BISNET grew bigger, they hired ICs to interact with the customers. It gave Mark more time to work on the software. Yet, two unexpected problems sneaked in. One was that Mark used to get instant satisfaction from working directly with the clients. Now with the ICs being in between Mark and the clients, he felt a little removed and isolated. Mark: I guess I missed that customer interaction, the instant gratification, the instant reward: a customer calls me and we work out a new way or feature. Then I get on it. Then the next day, it’s there. They (the customers) are like ‘oh, thank you!” I get that instant feedback. So (later) we removed that from the equation. And then the job turned into me sitting in front of a computer all day.” The second problem was that most ICs had little to none programming background. When they encountered technical problems, they often had to ask Mark for help. Mark: They had access to me all day, every day. So, if I was working on something complicated, the only time I could actually work on it was at night. I have to work late, ‘cause I felt like during the day there was always the chance that someone would come in and…[pause] Carol: interrupt your work. Mark: Right. [pondering] I just don’t know how to describe or generalize thousands of individual interactions. But just that feeling that you get when someone comes to you with a question. And it just indicates that they didn’t write down the answer that you gave them last time. That feeling that you get is the feeling that kept coming up, that I didn’t hide: my impatience. In a business setting, you go to war with the army you have not the army you want. You don’t really know this person. You don’t know what they are doing all day. Just ‘cause you pass their desk a couple of times and see them looking at wedding photos of their friends, that doesn’t mean that that’s all they do all day. But at the time, I was getting a certain impression of these people that was negative. And also, I was socially awkward. Let’s face it. I have anxiety talking to people. So that taints everything. Just the anxiety of trying to talk to people. But then on top of it, I think my face is expressive. So if somebody comes to me with what I feel is an inane question, then on my face you are going to see impatience and physical pain. You are going to see it all. [Chuckle] Besides asking technical questions, the ICs would also relay clients’ requests to Mark about adding new features to the software.  Mark: There’s feature requests. But then there should’ve been a time rather than when I’m in the middle of programming for them to come to me with a feature request. Things just weren’t organized. So I kept getting interrupted. I’m just there, programming away and getting interrupted constantly by this or that. I’m definitely not an organized person. That’s just wasn’t mine [pause]… Maybe I had more power than I thought I did? Maybe if I had sat Gary down and said ‘hey, we need to re-organize things here.’ I wasn’t a company builder. I was 21 when the whole thing started. All I knew was I had code to write and I had people interrupting me constantly with things that I thought could’ve been set aside for later or brought up in email so I can get to it when I have time, or written down in a manual so it wasn’t coming up all the time. In addition to the constant interruptions, Mark’s work was getting increasingly challenging and stressful. Mark: We kind of got to a point where the thing was so big that new features ended up being a real pain in the ass. I had already picked the low-hanging fruit. There’s a few new features. They are like ‘oh man, just a nightmare.’ Sometimes I would do it. Sometimes I’m just like ‘I don’t think I can do that.’ [chuckle] Or I’d say ‘maybe I can do that.’ And it would just sit on the back burner forever. So there was the stress of that, of having some features that I’ve promised just sitting on the backburner waiting for me to feel inspiration, enough inspiration to get it done… [sigh] Here’s what it felt like for Mark to deal with both the interruptions and burnout at BISNET: Mark: As a programmer, you load up your entire, we call it, stack space. the short term memory has to put so much of the program into your head, so you know what the interlocking parts are and what things are doing. Just to be able to work on one line of code somewhere you need to know how it’s gonna interact with all the other stuff. So I can spend an hour just looking through the code and try to figure out how something work and start in on how I’m gonna add this feature or change how this thing works. And somebody would come in and destroy the last hour’s worth of work by asking a question about something else. If that was an important question, something that I needed to pay attention to, like ‘oh the website’s down’ or something like that, that’s okay. I need to hit the reset button and go work on this other thing. That’s fine. But if it’s a question that I already answered… Carol: [interrupting] you think you already answered Mark: …a question that I think I already answered, then this person just destroyed an hour’s worth of my work to save themselves 10 minutes. That’s what I always felt like. That’s where the grimaces and the sighs came from... Maybe they are thinking that I hate them. But what’s going through my head is I finally got my burnt-out self to load on this bullshit so that I could do this thing, and you came in and destroyed that. It’s your job to know this in the first place. And could you please write this down and not ask me again? This was before Wikis. Maybe Wikis would have solved everything. I ask Mark whether he had ever suggested the idea of having an office hour to avoid the interruptions. Mark: I didn’t know how to say, ‘look, we need to organize things a little better. Eventually I did. I tried, ‘okay, this is my office hours during the day. But by the time we did that I was so burnt out. I wasn’t even getting that much done. I was kind of checked out at that point anyway. So it was too late by then. It was too late in the sense that Mark’s reputation as an asshole was already established. ICs avoided interacting with him at all cost. [music break] The unpleasant situation lasted for about 3 years, even though Mark had no real awareness of what others thought of him. One day in Mark’s 5th year at BISNET, an interesting twist happened. For Mark, it was a life-changing moment. That day, Mark approached Miles, the executive VP whom we heard earlier, to complain about something related to the ICs. Mark couldn’t quite remember what it was. Mark: I was complaining to Miles about how the ICs were bothering me, something along those lines. I think that’s when Miles shot back that if they took a vote, the ICs would vote to have me fired instead. That was the shocker. Yeah, that kind of blew my mind. It just never occurred to me that I was disliked. I want to be liked. I hate being disliked. So the idea that my self image of being a nice guy that people generally like… To have that idea destroyed like that was eye-opening and painful. It’s like a revelation, like this thought path I’d just never gone down for whatever reason. And then finally, I went down and realized ‘oh well, I’ve been ignoring this thing for so long. I ask Mark whether Miles told him why the ICs hated working with him. Mark: I don’t know if he even told me why they didn’t like me. I just thought about it and realized, ‘oh yeah, I can see why. It just kind of reframed everything. So okay, they were kind of scared to come to me because I was such an asshole when they did. So in their mind, for them to even summon the internal strength to walk up to me and ask me what they knew I would think of it as a dumb question. But they needed the answer, and they couldn’t see any other way. For them to do that was like them confronting the bully. Up to that point, I’d only see the interaction as they were being lazy and not taking it onto themselves to create some kind of permanent record of all the questions that I had answered, so I wasn’t answer the same things over and over again. In a later conversation, Mark reflects further, Mark: I don’t like drama. I’ve always been anti-drama. To find out that I’ve  been causing drama, and that it was in my hands to decrease it. That was a revelation: “Oh these things are important.” I can’t just ignore the personal. There’s no such thing as somehow freeing up the energy for the technical by ignoring the personal. It sounds good to a programmer who thinks of things as a zero-sum game: “Yeah, I can just focus on the technical and forget the personal. And I’m freeing up the energy.” But the reality is that by ignoring the personal, you are making things much less efficient than it could be and just causing more drama, wasting a lot  more energy than you could ever conserve by ignoring the personal. That was a big paradigm shift for me. Mark uses a lightening metaphor to describe how it felt like before and after the paradigm shift. Mark: It feels like a lightening. Over the years, the electrons were gathering in the clouds, building up and building up. Everything looks normal on the surface. All you see is a cloud. And there’s the Earth. But then this one day, you realize how many electrons are sitting in the cloud. And it just bolts right back into the ground. And that’s it. So yeah, that was kind of mind blowing. I just realize what an asshole I’d been. And I regretted it. I had a lot of regret. It was just horrible. So yeah, I talked to my mom about it that night. She made the suggestion that I gave everybody a flower with an apology note. So I went and bought the flowers. One flower for each IC and a little note saying, “I’m sorry I’ve been such an asshole…” Carol: [interjecting] So you put the word asshole in there? Mark: I think so. Yeah. So I got to work early and put one on each of their desks. And they all came to work and saw them. And there was like this moment… The details have faded. But there’s something of… This may not be it, but the feeling of it is right: I think they all came in to where my desk was. I think they all came in together. I think they gave me a hug or something. Carol: Everybody? Mark: Yeah. I think everybody gave me a hug. There was reconciliation. Apologies and coming together. It just turned the whole thing around. Miles, the VP, has a similar recollection of Mark’s flower gesture: he says that once Mark found out that others hated working with him, Miles: He took action and spoke very loudly. From what I can remember, people were truly touched by the fact that he was making the effort. Later in our conversation, Mark reflects on why the flower gesture made an impact, Mark: I didn’t think the flower thing would work. But it did. The fact that it worked told me so much about human nature: the other person just wants to know that you care. [laugh] That’s it. “I just want to know that you care. Then we can work together. If you care about how I feel about you, okay now I’ve got something to work with. I can tell you that what you did made me feel this way or that way. And I can trust that you’ll make adjustments trying not to do it any more.” Suddenly, people are your friend again, even after years of antagonism. Boom, “oh you actually care? Okay.” It switches up. Maybe you weren’t an asshole I thought you were. ‘cause you know assholes don’t care. That defines an asshole, right? If you prove to somebody that I’m willing to admit to having been in the wrong, I’m willing to let you win the battle, I’m willing to give up some status in order to convey to you that I care about how you feel about me. That’s what I think the flowers did. The flower incident was certainly an uplifting moment for both Mark and his coworkers. The former IC Letitia said that she felt Mark became more approachable and genuine afterwards. But warm and fuzzy feelings aside, I can’t help but wonder whether a symbolic gesture like the flower incident would really resolve years of conflicts. And also, can people’s behavior and habits be changed overnight? We’ll find out in the next episode when Mark and his coworkers continue to tell the story. What’s more, my conversation with Letitia took an unexpected turn in the next episode. Letitia: There were people that gave feedback to Mark by calling him an asshole to his face. Carol [in surprise]: Oh really? Was that before or after the flower incident? Letitia: Yes, before. Carol: So they actually told him, “Oh you are being an asshole here.” But he didn’t really respond. And he just continued his way? Letitia: Yeah. Wow, why doesn’t Mark remember any of that?? I thought he never got any feedback about his asshole status until the flower incident? Have you ever wondered what kind of feedback may actually sink in or stick around in a workplace asshole’s head? We’ll explore that question next time we meet. Meanwhile, check out our website www.workstoriesproject.org. Maybe you have your own stories to share. Maybe you want to predict on how Mark’s story may end. Feel free to leave any comments you want. You are also welcome to join me in a subReddit forum titled work stories project. And don’t forget to subscribe to our show in your podcast app. That way, you’ll be notified about new episodes automatically. All the details are listed on our website Workstoriesproject.org. Let me thank all the story contributors to this episode, Letitia, Miles, Bret, and my husband Mark. Without you, all of this would remain buried deep under the ocean of your experience. I’m your host Carol Xu. And the music is by Mark. Okay, that’s it for our show. See you next time! [music break]

Heyang: 欢迎来到这周的Round Table英语词汇小百科，我是赫扬，今天我和马克要来聊一聊英美文化的差异。So today we are gonna talk about more than just vocabulary difference between British English and American English. Today we are gonna talk about the cultural differences too.Mark: Well, that’s right, and some of those things that British people like myself know about America, but we don’t quite understand why they like it.Heyang: Yes, the first one comes to my mind is Americans love Disney prince and princess.Mark: You’ve lived in both countries, haven’t you, so you may have a better insight into these than me. But I mean, I’m not a Disney person. I can’t stand any of it. I found the whole lot just horribly, sickly oversweet and sanitized.Heyang: Well, for people who grow up watching Disney movies is the first thing they know about love, about relationships, and yes, maybe it’s a bit too bubble gummy, after you grow up you realize that. But at the moment when you are a little kid, it is the fairy tale for all.Mark: I suppose not. Ok.Heyang: What about extreme snacking? Do you think that’s very American?Mark: What is it? Is that like eating more of what we all eat when we are watching a film or something, do you think?Heyang: Well, the thing about America is everything is super-size, and I think they love that and when you see these super-size Snicker bars, they are like as big as your hand. It’s kind of great to snack on that actually.Mark: Yes, the other thing is that when I was working for another radio station, I used to do travel reports on cruise ships. You should see the size of those plates that they have on cruise ships, because many cruise ship passengers are American, and I thought the plate that I took in the serve-yourself buffet, I assumed that it’s for me and the 5 people standing behind me. I thought we were going to share, but no, that massive plate was just for me.Heyang: What about putting food stuffs inside other food stuffs?Mark: I love this whole concept. I know this is supposed to be one of the criticisms that British people have about Americans. What do you mean first of all?Heyang: Take pizza for example. It’s putting pizza inside hamburgers, so it’s gonna be gigantic, and you can have a hamburger and a pizza at the same time.Mark: Wait a minute, cause a hamburger itself is one food inside another food, isn’t it? It’s the burger inside the bread. So really, if you got a food inside of food inside of good.Heyang: Yes, and for example, that pizza burger we are talking about is made for sharing.Mark: I love the whole idea of it really, but then you are talking to someone that really likes the old British tradition of a crisp sandwich, you know, when we take what Americans call the potato chip, just put it between two pieces of bread. You can put anything between two pieces of bread and make a nice snack out of it. Heyang: That just sounds like too much calories at one go. That’s definitely a no-no for me. What about when Americans go “Bros”, or “Hi, bro”, what do you think of that? Mark: Bro is short for brother, isn’t it, I think.Heyang: Yes.Mark: It’s alright I suppose. I think it’s really quite an affectionate term of endearment I suppose, isn’t it? In fact, in Britain, we are kind of a bit stuck for the right word, cause in America, they’ve got the word guy, and it’s used to just mean man, you know, the lads, but now it can be used for girls as well over the last maybe ten or fifteen years that can be used for everybody, and that’s also a classless word. I think the problem in Britain is that there are class connotations without versions of that kind of word. For example, if say bloke, which now sounds rather old-fashioned. It’s a bit of a down-market word really I suppose bloke is. Chap, on the other hand, is a bit of an up-market saying. Geezer, definitely kind of very east London, originally very down-market, but now you might find someone like David Cameron, the prime minister pretending not to be as posh as he is using the word geezer possibly, I can’t really imagine it myself, but this is all coming with something is called Estuary English, which is middle class people trying to sound like they are not middle class, because there’s a kind of a stigma attached to being too middle class, it’s an insane country with all these things going on. I wish we had a word like “Guys”. I don’t like it personally when it’s used by British people, cause it’s an American word, that’s how I think of it. I don’t like it and it’s a bit of fake when British people say it.Heyang: That’s so very interesting. I didn’t know that such a simple concept can have so many variations and shown in languages. We’ve talked a lot about what British people don’t understand about Americans, but what about those things that the British people don’t realize are offensive to Americans. For example, friendly offensive banter, apparently a lot of Americans don’t really take the offensive bit very well. Mark: So I’ve heard, I mean, it’s not my experience. My American friends that I know here in China are all for some sort of banter where we might poke fun at an aspect of each other’s country or culture or something like that. It’s all done in a very good-natured way, so I gotta disagree with that actually. Heyang: Apparently on the list, there’s criticizing American food, saying Americans are unsophisticated and mocking their heritage. I think for Americans or for anybody when it’s not your fellow compatriot saying these things, it could be a bit offensive. Mark: I can criticize their food and mock their heritage all in one sentence. Heyang: What is that?Mark: There is no such thing is American food.Heyang: That’s all the time we have for this week’s Word of the Week. We’ll see you next week.

Xiaohua: A teacher’s pet is someone who is greatly favored by a teacher. To become a teacher’s pet it will take a bit of work, but the results are phenomenal. When you are a teacher’s pet, the teacher is more likely to accept excuses from you, give good opportunities to you, and write positively on your evaluation. But of course everything comes with a price.While favored by a teacher, you’ll risk being hated by the entire class. 在班上老师总是会偏爱一两个学生。他们虽然会被班上的同学鄙视，但是被老师偏爱的好处也是无穷的呀~今天Round Table就来教你如何成为老师的宠儿。Yes, so we are giving you advice on how to become a teacher’s pet. But really is it worth trying to become a teacher’s pet?Mark: What we should do is what we said should be done with teaching gifts. We should all declare an interest if we have one. Were any of us the teacher’s pet? I can say that I definitely was not. XH: What about you Amy?Amy: I think I definitely was. Mark: Really?Amy: I was a total goody two shoes. I definitely sucked up to the teachers. Not on purpose, it wasjust I was usually in the gifted and talented programs and stuff. And so, I don’t know, I just had this compulsion like be good. (XH: Please people.)I could get in trouble I’d feel like terrible and I’d cry if I got in trouble. Mark: You’ve gotten red, Amy. You’re blushing. XH: Amy’s a Cancer. And as a Cancer myself, I can totally understand your feeling. Cancers don’t like to upset people. Satisfying people is their biggest wish in life. Somethinglike that. They cannot feel the same rebellion that’s in other people’s heart. They just don’t want to do that. Amy: I always wanted to be a rebel. I just couldn’t find it in my heart to do it. XH: Exactly, so that’s not your fault. But anyway, Amy, maybe you should read out all these advice on how to become a teacher’s pet. Is there anything that impressed you?Amy: Let’s see. I think asking questions, always having your hand up when the teacher said “Does anybody know the answer?” “I do! I do! I do! Call on me! Call on me!”Mark: I did that. I did that too. Amy: You did? See, maybe you were a teacher’s pet. Mark: Perhaps I was a teacher’s pet anddidn’t know it. XH: Yes, perhaps. Also you have to ask the right question. Asking questions I think is always good. The teacher encourages some class participation. But if you accidentally ask the question that the teacher doesn’t know the answer of, then it’s not very good. Amy: I don’t know. I think in the States, that’s like a sign that you’re a good student. So the teacher will be like “That’s a very good question Amy. Let me figure that out for a second. The teachers like the smart students. They like the well-behaved students. They like the students that talk to them. So I guess if you spend a lot more time with the teacher than you do with the other students, that’s teacher’s pet. Mark: I’ve just remembered a terrible thing I did to our teacher, a German teacher who was actually German. I would take CDs of these sort of German punk songs. I knew there were full of rude words. And then I’d ask her to play it, and “Could you translate it for us?”XH: What?Mark: And embarrassed her.Amy: Really?XH: That would be regarded as a challenge of authorities, and not welcomed.Mark: I think she said something that I knew it wasn’t right. I just had to accept whatever words she said it meant. Amy: See, you were a teacher’s pet. Mark: No, that’s the opposite of being a teacher’s pet. You can see that I really would not want to be a teacher’s pet. For us, it was the last thing you’d want to be. So I’m fighting against this accusation of being a teacher’s pet. Amy: But nobody wants to be the teacher’s pet. That’s like a very bad thing to be. And I think I was only the teacher’s pet because I was just like kind of a weird kid. Mark: Do you think teachers respect the teacher’s pet, or just feel sorry for them?Amy: I think they feel sorry for them. XH: I don’t think so. I think it depends on whether you acted it out naturally or whether you were being too pretentious, and trying to make too much effort. I think teachers can see that. You know, you’re kids. The teacher is like several decades older than you. So they know whether you’re pretending to be nice, or whether you’re just naturally nice. Mark: There’s a difference though. There’s a difference between being a teacher’s pet, like Amy was, or being the English monitor, like Xiaohua was, cause you were made to do it, won’t you? Xiaohua: I was made to do it. Mark: You were instructed. You didn’t volunteer for it. Xiaohua: No I didn’t. Amy: What does that mean, the English monitor? Xiaohua: The English class representative meaning I have to help the English teacher with a lot of assignment collecting and things like that. Mark: That’s fair enough. That’s not a teacher’s pet. Amy: See, if you did it voluntarily, that would be a teacher’s pet. Mark: It would be. It’s easy. It is all to do with not what you do but what your attitude is while you are doing it, whether you’ve volunteer for it. Xiaohua: I don’t think it’s a healthy attitude. What is wrong with being helpful? For example, if the teacher finishes a class and there’s a blackboard full of chalk writing, and the first one who came up and tried to wipe those will that be considered as a teacher’s pet or trying to impress the teacher? Mark: I mean I think it’s all to do with maturity and being an adult really. Cause now I totally agree with you. I mean I think if I was a teacher I think it will be great if someone volunteer to help out. This is how we function at work. Everyone helps each other out. But at school, it’s a different situation. In British school, anyway you must not be seen to be siding with the teachers or helping them. Amy: You will definitely get picked on for helping her clean the black board. Xiaohua: I think even in China, that’s true. What about helping your teacher hand out some sheets of paper or test results? Mark: I think that’s OK. Because that’s a sort of you don’t really often have a lot of choice, do you? You were given them and you have to give them out. Xiaohua: So it depends on whether you willingly want to help out. Amy: Exactly, that is the difference. Teacher’s pet or not a teacher’s pet. Xiaohua: OK. People are being punished for being a good person. That’s all.

Xiaohua: Hello and welcome to Roundtable’s Word of the Week. This week we’re talking about one of my favorite topics: ordering food at a restaurant. Mark: I think we all like this topic, Xiaohua. Xiaohua: I think so. 有的时候尽管我们掌握了英语，但在西方国家旅行的时候还是会遇到些困难。Ordering food in restaurants in the west and in China are not exactly the same, and there’re some things people take for granted. Mark: Yes. It’s very easy to not do any research before you go to a different country, and you can create entirely the wrong impression. For example, in some cultures, “please” and “thank you” are the most important words in the language. Those words get things done and open doors. And if you don’t use them in the appropriate setting, like in a restaurant, you will be thought of as rude and arrogant, and you might not get very good service as a result. So it’s worth remembering to always be polite.Xiaohua: 在餐馆点菜的时候，文明礼貌用语是非常重要的，所以“你好”、“请”、和“谢谢”这样的词都是必不可少的。Also I notice something that some of my Chinese friends have done before. When they’re ordering something, they tend to say “I want something…”, because that’s an exact translation of what they would have said in Chinese. Mark: Yeah. If you said that in English in a restaurant, it would be considered to be quite rude. There’s a way of saying that you want something, which is: “I would like…” It’s much more polite. I think actually it’s very similar in Chinese. It’s the difference between saying “我要” I want, and “我想要”, which is more polite, isn’t it?Xiaohua: Yes!Mark: Don’t just say “I want”. It’s better to say “I would like”, then whatever it is you want, “please” at the end. And then you’ll get very good service and get exactly what you want. Xiaohua: Very important to say “please”. Also I think you can say “Can I get something please”, or “May I have something please”, right?Mark: Yeah. “May I”, that’s very polite and very good English. “Can I get”, that’s an American phrase. It annoys me so much Xiaohua. Cause you know, if I was working in a coffee shop, for example, behind the counter serving coffee, and someone came in and said “Can I get a latte”, I’d say, “No, that’s my job. I’ll get it for you.”Xiaohua: I see!Mark: I mean it just annoys me, cause the grammar, it’s just all wrong! But anyway, yes it’s a very common phrase in American English, and so yes, you should use that if you’re in America or speaking to Americans. They’ll get that one. Xiaohua: I see. 所以在这上面还有文化差异呢。英国人可能会说“I would like something”或“May I have something”，但如果说“Can I get a cup of coffee, please”，可能会让某些英国人感到不爽。Mark: Yes, it’s just a small thing. Xiaohua: You grammatically-correct British people. Mark: There’re some difference between British and American in restaurants. They’re not that great. We all understand each other. Like for example in American English, “打包”or “带走”which is what you say in China for saying to take away. In British English, we say “take away”. In American English they say “take out”. It has the same meaning, though. Xiaohua: Also you can say “to go”, but is it American English or British English?Mark: Yes. That’s American English. That’s kind of spread to British English, though. OK. And there’re some things which are the same, which is like, if you’re ordering a steak for example, how you want it cooked is very important in a western restaurant, cause there’s a lot of choice. You could have it rare, this means that you’ll see blood on that steak, it’ll be red and hardly cooked at all: there’s medium-rare, that’s a bit better cooked; and then maybe well-done, which is how I used to like it before I stopped eating meat. I used to like my steak well-done, nice and cooked and brown, perhaps even a little crispy done under the grill. Xiaohua: I see. 点牛排的时候牛排几分熟也有讲究。从生到熟应该是分为rare, medium rare, medium, well-done。Mark: Yes, those are the basic forms. Xiaohua: And do you know Mark, I would always ask for rare. Mark: Really? You like that, do you?Xiaohua: Yes. Mark: OK, interesting. The other thing is, when it comes to paying, you might be given choices in western restaurants, of credit, debit, or cash. That means credit card, debit card, or cash. The reason they specify the different credit or debit cards is there’s usually a 2% fee, which the restaurant has to pay if you use a credit card, whereas debit card does not have that fee and comes straight out of your bank account. This means that if you offer to pay by debit card, in theory you should be able to get a 2% discount, cause the restaurant is saving 2%. In practice, it might not work. And don’t do it on a first date, or you’ll be seen as cheap. Xiaohua: Alright. We’re not going into that territory, Mark, not today. Mark: No. Xiaohua: But that’s all we have for this week’s Roundtable Word of the Week.

Xiaohua: Celebrities across China are outraged at their unauthorized wax figures being included in a museum in Sichuan Province that has been dubbed by netizens as "the ugliest wax museum."四川一处蜡像馆因未经允许展出了名人蜡像而引来众多明星的不满，这座蜡像馆也被网民称为“史上最丑蜡像馆”。So are you shocked by these figures as well?Mark: There were some great pictures of them. I think I can sum it up very simply and quickly by saying that I’m looking at a photo, and it’s the picture of the wax work of Zhang Ziyi,Heyang: It claims to be.Mark: and the next one is Gong Li, right? But when I saw it, I thought that the one of Gong Li was the real Zhang Ziyi standing next to her wax work, and they do look very similar. Heyang: What?!Xiaohua: That’s the mildest criticism I’ve ever heard. Heyang: Yes. And I hope the teams that work for both actresses are not listening to our show, because I firmly disagree with you, Mark, and I don’t think that’s true at all. Both look… They don’t look like humans I think. And look what they’re wearing! It’s like straight from the 1960s or something. How could they have the audacity of putting up signs claiming that these are wax figures that are supposed to be these two actresses?Mark: But don’t you think that they’re so bad that they’re good? And I think people will go and see these cause they’re so awful. I think the celebrities will be queuing up to have theirs put in there. And actually the reverse is happening now. But I mean they’re so awful it’s kind of like a claim to fame to be in there and have your terrible wax figure in this place. Xiaohua: That’s why the museum actually said “during the past few years, we’ve tried everything for us to be more known, but this is the least expected way for us to become famous”.Heyang: It should be infamous, really. And it’s so bad it feels like defamation. It’s meant to make these people look bad. I think this is what it is. Mark: I don’t think it’s set out to make them look bad. It’s just they’re not very good at making them. Heyang: They’re crap at making them. Mark: One of them was from a Beijing Waxwork Museum. Not Madame Tussaud’s we must add. It wasn’t that one. But I think it’s pretty good. I might actually go and have a look, and see if we can spot who is who. This is what I think will be attractive to people to have their figure put in them. Heyang: There was only one figure of Andy Lau that looks a tiny bit like the real singer, and I suppose Andy Lau is this person’s love of life, otherwise he would not put so much effort in trying to make this wax figure remotely like him. Mark: Remember one thing. It’s all about entertainment. And the Waxwork Museum is certainly entertaining the whole of China now with these pictures and with the waxworks. So they’re succeeding. Heyang: But there’s good publicity and bad publicity. This is..Mark: But it’s all entertaining and that’s what this place is all about. It’s a place where people go and be entertained. In this case, instead of admiring the statues they can have a good laugh at them, can’t they?Xiaohua: Also, in order to defend their work, one of the “artists” who created these selections said that well these celebrities when they don’t put makeup on, they’re probably just like that. Heyang: That’s terrible. Xiaohua: What would you say to this?Mark: I would challenge any of the critics to try to make something that looked as much like a human as these people. They’re not totally talentless. I mean we couldn’t make anything like that, couldn’t we?Xiaohua: True.Heyang: No! I think if I really have a go at this, I might do better. I probably will. Xiaohua: Really? Let’s do a challenge about that.

Xiaohua: Hello and welcome to Roundtable's word of the week. This week we are going to teach you some phrases to express worries and relief.Mark: But I'm a bit worried that we might not have enough.Xiaohua: Really?Mark: That's just my clumsy way of starting us off with one phrase: "I'm really worried about something."Xiaohua: 学会表达适当的情绪是很重要的，那担忧或焦虑也是一种情绪。首先马克就给我们举了一个很好的例子, worried about, 很担心。Mark: Yes, that's how you say that you're concerned or bothered about something. Those are two other words that can just be substituted for worried in that kind of sentence--bothered or concerned. And of course, when you are worried about something, it's a kind of fear isn't it, really? And, that is reflected in another one of these phrases: "I'm afraid that I’m going to fail the exam or something" or you can say, "I'm scared to death that I might fail the exam."Xiaohua: 担心和害怕也只是程度上的不同而已。所以也可以说I’m afraid that something will happen. 或者更进一步说, I’m scared to death about something. Mark: Yes, that's right. Another one is--they have some quite negative connotations, all of these do, I think, really, don't they?--and another one is, again, negative: "I can't help thinking" and then you can say “that something bad is about to happen.”Xiaohua: 用否定句式来表达你的担忧也可以，说I can’t help thinking就是我忍不住会这样想啊，我很担心会发生这样的事情。Mark: And, if you can't stop thinking about something, that means that you think about it not only during the day but at night. And, that brings us to our next phrase: "it's been keeping me awake" or "I've been up all night with worry."Xiaohua: 所以当一件事情让你都担心得睡不着觉的时候就可以说“it’s been keeping me awake" So, how do you link this "keeping me awake" phrase with the thing that you’re worried about.Mark: Yes, you can say, "I've been so worried about my work assessment tomorrow that it's been keeping me awake all night." Shall we do the opposite now, the relief when you've discovered that the thing that you were worried about isn't going to happen?Xiaohua: Definitely.Mark: Then, you can have some relief. One of the most popular ones is--I don't think really anyone ever says it actually, but you see it written a lot in comics--"phew." It's more of what's called an onomatopoeic word. This is a word that sounds like the thing it's describing because when you say "phew" you exhale a big breath. And, that is one of the things that people do when they are relieved about something.Xiaohua: I see, so this phew is sort of like what in Chinese we say, "Ah."Mark: Exactly. If you just add a little linguistic element to that exhaling of breath, then you have "phew."Xiaohua: "Phew," that set my heart at ease.Mark: Yeah, I know that it sounds as though it’s spelled F-E-W, meaning a small number of something, a few, but it's actually spelled P-H-E-W when you use it in this way.Xiaohua: 说完了表达焦虑的词汇我们来看一看表达松了一口气的词汇。说到气，第一个想到的就是phew, P-H-E-W. Mark: Yes, that's right. Another one that causes people some distress really because some religious people, who have a strong Christian belief, they don't like it when constantly on TV and in Hollywood movies people are always saying, "thank God." And, the reason that religious people don't like is they say it's taking God’s name in vain. In other words, you're saying it not in the hope of God intervening, but you're kind of acknowledging the fact that god hasn't intervened and isn't going to. But, nevertheless, you do hear it a lot--"thank God"-- but be careful who you use that one around because you might upset some of them I think. And, because of that, it's been modified from "thank God" to "thank goodness" with goodness being the essence of God in theory. So, again, there's another version of it which you hear a little bit in Britain among older people. They'll say, "Thank the Lord." They mean God, as well, but it's a more polite and less offensive way of saying that.Xiaohua: 西方人经常会用thank god或者thank goodness的方法来表达他们松了一口气的情绪。中文也有同样对应的词汇，那就是谢天谢地。Mark: There's another one when people are relieved, they've said, "that's a huge weight off my mind." It's as though there is a big weight, something really heavy on your head pressing down on your thoughts and making you worried, but then when the bad thing doesn't happen you say, "That’s a weight off my mind." In American English, they tend to say, "that's a load off my mind," and you'll hear these phrases a lot in songs as well, so that's what they mean when they say that. Xiaohua: I see. That’s a huge weight 或者that’s a huge load off my mind就有点像一块石头落地的感觉。And, that's all we have for Roundtable's word of the week.

Xiaohua: Hello and welcome to Roundtable’s Word of the Week. This week we are giving you some job-hunting tips. We’re going to talk about things you can say in your resume to praise yourself. Mark: Yes. It’s always difficult with resumes, or CVs. Curriculum vitae, to use the actual Latin, this means “story of your life”. Curriculum vitae. Or resume, which is French, with an acute E accent on the end. Sometimes people leave it off.Xiaohua: I see. That’s an interesting point to make, and so let’s take a look at some of these words and phrases you can use.Mark: So when you’re talking about yourself in your resume, you might want to talk about your personality. Some good things to put would be, for example, that you have “a stable personality and a high sense of responsibility”. Xiaohua: 如果想要形容一下你的为人如何的时候呢，可以说“性格稳重、非常有责任感”。Mark: The other thing you should do is to try to use lots of positive words, and avoid words with negative connotations. For example, you use words like “bright”, “ambitious”, “self-motivated”, and the word “positive” itself is always good on the resume. Xiaohua: 在简历上肯定都要多用积极的词汇，所以说像“聪明”、“有进取心”，还有“积极”这个词本身都可以用上。Mark: Now when it comes to working in a team, which is again, something that employers like to read, that you’re “a team player”. That’s become a bit of a cliché actually, in the western resumes and CVs in recent years. But it is very important. In an increasingly diverse and multicultural work force in some countries too, that’s very important to say that you can work with just anybody. Xiaohua: 强调自己有团队合作精神是很重要的。另外如果在跨国公司工作就会有跟国际团队合作的机会，所以说自己是一个可以适应不同文化的人， “work well with multicultural work force”, 也是很重要的。Mark: But it’s not all about teamwork. You should also emphasize the fact that you can work well independently unsupervised. Put in words like “resourceful”, “self-motivated”, you “use your initiative”, and so forth. Again, these are words with very positive connotations.Xiaohua: 除了夸自己善于团队合作之外， 也要强调自己是可以胜任独立工作的。Mark: There are some other characteristics which go down well on a resume. The fact that you’re “highly organized” and “efficient”, that you have “good presentation skills” because remember, your employer might be thinking that they want someone that would stay with a company for quite a long time, and therefore progress up what they often call “the greasy pole” of management, for example. They call it that because it’s very hard to get up there, and very fast to slide down “a greasy pole” if you do the wrong thing, so you need to be very careful. But make it clear that you do have potential to be more than the requirements of the job you’re applying for, so you could say you have “good presentation skills”, you have “good managerial skills”, and “organizational capabilities”, and also crucially, say that you are “willing to learn and progress”. Nobody likes a know-all who comes into a job saying they know everything and they’ve got nothing to learn. It’s important to be just a little bit humble and say that you are willing to learn and progress in your career.Xiaohua: That’s right. 说自己有“良好的组织能力”、“可以高效率的工作”也是很重要的, “highly organized and efficient”。 另外很重要的一点就是不要把话说的太满啦， 因为没有人愿意雇佣一个自以为什么都知道的人来工作。所以说 “willing to learn more”, “willing to progress” 也是非常好的。Mark: That’s right. Now, as well as the key words that you should use on the resume, there is something to avoid. For example, don’t say something like “I think I can do this job.” It shows a huge lack of confidence. Say something like “I am confident in my ability to excel in this job.” “Excel” is a really positive word to use in a resume. Xiaohua: 有一些词呢， 是最好不要说的，譬如说 “I think I can do the job”，“我觉得我可以胜任”。与其这样写稍微的没有信心，不如说 “I know”, “I believe”, 或者是 “I am confident I can excel”。Mark: That’s right. Another phrase to avoid is “I will try”. Now even if you don’t know that you’re going to succeed in the job, you don’t want to tell your future employer that. So don’t say “I will try”, say, “I am confident that I will succeed in any role assigned to me”, for example. Xiaohua: 还有一句要避免说的话就是 “I will try”, “我会试试的”。因为 “try” 这个词也给人一种没有信心的感觉。Mark:And there’s one more phrase that I think you should really avoid. “To be honest, I’ll tell you what it is you’re like”. Xiaohua: Okay.Mark: It’s that phrase itself, “to be honest”. I mean this is a common phrase in English, but I must say that whenever anyone says that to me in a normal conversation, alarm bells do start ringing, because it does suggest that they haven’t been honest with you up until that point. So I would avoid saying that one, to be honest. Xiaohua: “To be honest with you”, “说实话” 也是一个要在面试里面避免的词汇。因为人家会觉得原来你到现在才开始说实话。 And to be honest with you Mark, I’ve been enjoying this edition of Word of the Week.Mark: I’ve enjoyed it too.

Xiaohua: The omnipotent Chaoyang residents are on the go again. Latest news says that a CCTV host busted by police while taking drugs fell from a building in Beijing and died. The host as well as another drug user was reported by Chaoyang residents, the so-called “Chaoyang Masses”, or 朝阳群众 to the local police. The phrase “Chaoyang Masses” has been very popular recently with the help of the Internet. Now let’s talk about it finally. Why do you think that this term gets so popular. Heyang: Because I think it’s been closely connected to a string of celebrity gossip. That’s it’s always the Chaoyang residents or the Chaoyang masses give the police a tip-off. And now there’s this CCTV host, and previously there was Huang Haibo and Ke Zhendong and a whole bunch of others. As a result of the tip-off got busted by the police either because of calling prostitutes or taking drugs and all kinds of things going on. So, I’m with the netizens. When and how did the Chaoyang masses became such a powerful and mysterious organization, to some extent, that can fight crime? When did that start happening, since last year I suppose?!Mark: I think it started happening in people’s imagination. When this phrase has been invented by the media. That’s when the phenomenon started. Realistically, it doesn’t exist. Xiaohua: It was invented by the police probably.Mark: There are certain individuals who have nothing better to do. They go around poking their noses into other people’s business. Now sometimes when it’s illegal business, it could be a good thing. But to think of it…as it has been compared to the British secret service the MI6…Heyang: And also the CIA, the MOSSAD…Mark: Come on now, really. I think this is the most hyped up story and a fantastic sounding phrase—the Chaoyang Masses—to hook the whole story onto. And we’ve fallen for it. We are promoting it.Xiaohua: We are not. We’re trying to get to the bottom to it. Mark: We are discussing it. In that way, we are going along the way with this idea that there’s such as thing as the Chaoyang Masses. When in fact it’s probably just different people who happen to know someone, maybe they have a grudge against them. And if they can snitch it to the police then they will. I hardly think it is hundreds of thousands of people in organized units, going around busting crime. Is it?It’s the odd person with a grudge that thinks alright, I’m going to make an anonymous tip-off to the cops and you are for it Mister. That’s what is happening.Heyang: And maybe they happen to live in Chaoyang district who knows. Mark: maybe they don’t. Who cares. Heyang: Yeah, we cares.Mark: But it doesn’t help the story if we say they don’t.The media loves this kind of thing. Sure enough, we are enjoying it now and discussing it. Heyang: When I saw this my initial question was…So these are celebrities that have paparazzi following them around. And even the paparazzi who have a close eye on these celebrities 24 hours around the clock couldn’t bust them taking drugs and doing illegal things. When did these Chaoyao people and how did they bust them when even the paps can’t do. Thanks guys, I think now we’ve cleared the air a little bit for me. Mark: Let’s look at this realistically. If you are running a hotel, if you are renting an apartment and you sometimes service the apartment. The hotel room is cleaned and you find some drug paraphernalia or something there, you don’t want anything to do with that obviously. Therefore you would probably tell the police. But it’s hardly a case for the Chaoyang Masses. It’s probably someone looking after their own interests. Because they don’t anything to do with that kind of illegal activity. And therefore they don’t want anyone doing it in their property. Who knows how the information gets to the police. It’s probably things like that, people looking after their own interests. Xiaohua: You guys have great points. But just to play devil’s advocate here. Don’t underestimate the power of the masses, or maybe the Dama’s, or the Daye’s in this case of Chaoyang.On the one hand, I think Chaoyang is a place where expat communities are there, and lots of celebrities do live in Chaoyang. I guess that’s why it’s always Chaoyang and things happening in Chaoyang. On the other hand, it plays to the police’s advantage to create or help to create this phenomenon. Because that gives Chaoyang an image of there’s citizen vigilante where you don’t want to do something bad. Our listener Yang Duo says why are there still people taking drugs in Chaoyang, knowing that there’s the Chaoyang qunzhong there. Probably a good point.